French flexicurity – Part 4: tax reforms
President Macron engaged in 2018 a series of reforms to transform and modernize the French taxation system, increase France’s attractiveness and make French companies and companies based in France more competitive. In his report “France Flexicurity”, Edward Hamilton analyses the tax reforms undertaken to bolster the business environment.
A series of tax reforms to improve France’s competitiveness
The tax reforms undertaken by Emmanuel Macron aims at creating a new tax environment in France, encouraging investments and boosting employment. The 2018 French Government Budget Act, therefore, reduces business taxation through various measures that benefit all companies by giving them the means to increase their competitiveness.
- The reform decreases sharply the rate of corporate tax (Impôt sur les sociétés – IS), from 33.33% to 25% by 2022, in line with the European average.
- The wealth tax on total assets (Impôt de solidarité sur la fortune – ISF) has been replaced by the property wealth tax (Impôt sur la fortune immobilière – IFI), which sees the tax base restricted to the value of real estate assets.
- In terms of personal taxation, a single capital gains tax rate of 30% has applied from 2018 (Prélèvement forfaitaire unique – PFU).
- A permanent reduction in social security contributions of six percentage points on low salaries.
- The research tax credit, a key measure, allowing 30% of R&D expenditure to be deducted up to €100 million, and 5% above this threshold has been made permanent for this period of government.
- The French government budget bill for 2019 provides for a supplementary depreciation measure for SMEs, who can deduct 40% of the original value of goods acquired between January 1, 2019 and December 31, 2020, for items such as machines, sensors, software or equipment for robotization and the digitalization of industrial activity.
Contact us for more information or to get support in your investment project in France.
More articles about :
Invest in France
Normandy is a significant actor in the food-processing sector, as it is a logical extension of its agricultural potential. The processing industry employs 17% of the regional industrial workforce and generates about 6 billion euros annually. The...
The image of Normandy in France is often that of apple cider and cattle herds, as it has long been one, if not the most productive agricultural region in France. Much of its main exports are among the on-demand items in Nordic stores, such as...
To provide premium and personalized support to both local companies and foreign structures having investment projects in the region, the economic development agency AD Normandie provides several services to promote innovation and development for...