French Finance Minister Outlines French Corporate Tax Cut Plans 

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French Finance Minister Bruno Le Maire has confirmed that the Government will legislate for several tax measures designed to increase France’s tax competitiveness in the upcoming Budget for 2018.

In a speech to France’s main employers’ union, MEDEF, on August 30, Le Maire said that the Government would proceed with several major tax proposals, including a corporate tax cut, the abolition of the ISF wealth tax, the replacement of the competitiveness and employment (CICE) tax credit with cuts in compulsory levies, and the simplification of capital gains tax.

“Our tax system must be simple and stable. It must promote risk and reward work,” he said.

Under the plans, corporate tax will be reduced to 28 percent on profits up to EUR500,000 (USD600,000) per year in 2018, with the headline rate, currently 33.33 percent, lowered to 31 percent in 2019 on profits in excess of EUR500,000 (and the 28 percent lower rate maintained).

Corporate profits will then be taxed at a single rate of 28 percent from 2020, before corporate tax is cut to 26.5 percent in 2021 and to 25 percent in 2022.

Le Maire also told the audience that the Government will “remove the ISF.”

“With the abolition of the ISF, we want to attract the investors needed to grow your business. We want to stop the flight of talent, we want to reward risk taking,” he said.

In another significant measure, Le Maire confirmed that the CICE tax credit will be eliminated and replaced with additional tax cuts.

The CICE tax credit was former President Francois Hollande’s flagship pro-business tax measure, and was intended to reduce the cost of employing workers. The tax credit amounts to seven percent (six percent prior to January 1, 2017) of gross payroll for remuneration equal to or below 2.5 times the minimum wage. However, in July 2017, Prime Minister Edouard Philippe announced that the CICE tax credit will be converted into a reduction in payroll charges beginning on January 1, 2019.

In addition, Le Maire said that capital gains will be taxed at a single rate of 30 percent from 2018.

Source: Tax News – Le Maire Outlines French Corporate Tax Cut Plans

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