French 2017 Budget Confirms Corporate Tax Cut
The French Government has confirmed that an intermediate rate of corporate tax will be introduced next year, to reduce the tax burden on small- and medium-sized firms.
Under current rules, business income up to EUR38,120 (USD42,730) per year is taxed at 15 percent, with the excess taxed at the headline rate of 33.33 percent.
In announcing the 2017 Finance Bill on September 28, Finance Minister Michel Sapin affirmed the Government’s intention to introduce a new 28 percent rate of corporate tax, which will apply on income between EUR38,120 and EUR75,000.
It is expected that the 28 percent rate will replace the current top rate of corporate tax from 2020 as the Government continues its attempts to reduce the tax burden on businesses, and SMEs in particular.
The Government also said that the competitiveness and employment tax credit (CICE) will be increased from six percent to seven percent on wages paid from January 1, 2017 – a measure expected to cost the Government EUR3bn.
In addition, the Government intends to further reduce social contributions for low-earning freelancers who are not currently eligible for the CICE credit.
The 2017 Finance Bill also includes around EUR1bn in personal income tax cuts, which are expected to benefit approximately five million low- and middle-income households.
Source: Tax-News
