France May Accelerate Corporate Tax Cut
The French Government is reportedly considering cutting the rate of corporate tax further than already planned as part of changes to the Responsibility and Solidarity Pact under consideration by the Government, although the reports were later denied by Finance Minister Michel Sapin.
Under the Responsibility and Solidarity Pact, France plans to reduce compulsory levies on companies by EUR14bn (USD16bn) between 2015 and 2017. As announced in 2014, the corporate social solidarity contribution (CS3) will be phased out by 2017, and the corporate tax rate will be reduced from 33.33 percent to 28 percent by 2020, with the first reduction due to take place in 2017, although this still needs to be approved as part of the 2017 budget law.
According to Les Echoes, which cited an official under Sapin, accelerating next year’s cut in corporate tax is now preferred by the Government to the complete abolition of the CS3, as this is expected to have a more immediate impact on French tax competitiveness. Under this proposal, the CS3 could be retained for large companies, to ensure that the current cost of the pact is not exceeded.
Sapin later told reporters that this was not the case, and that the corporate tax rate would be in line with the terms of the solidarity pact. However, he suggested that in the longer term, harmonization of corporate tax bases in the European Union would eventually lead to further cuts to France’s corporate tax rate.
Source: Tax News
