France announces corporate tax surcharge, changes in VAT, increase in individual tax and certain other taxation measures to reduce debts
The government of France announced plans to impose a 'temporary' corporate tax "surcharge" of 5% for 2012 and 2013 for large companies.
- (1888PressRelease) November 25, 2011 - Sunnyvale, CA - The government of France announced plans to impose a 'temporary' corporate tax "surcharge" of 5% for 2012 and 2013 for large companies.
The government also plans to increase the 5.5% reduced rate of value-added tax (VAT) to 7% (with certain limited exceptions).
The move is part of France's second austerity package designed to increase corporate tax revenue and reduce government expenditure and debts.
New corporate tax proposals
The proposal mainly focuses on two measures that would affect business taxpayers:
1. A temporary 5% surcharge on corporate income tax would be implemented in 2012 and 2013 for companies having an annual turnover of €250 million or more.
2. The "reduced VAT rate" (currently at 5.5%) will be increased to 7% for all goods and services (with an exception to food and certain goods/services provided to disabled persons).
Tax proposals for Individual Taxpayers
The French government also introduced an exceptional 4% individual income tax on taxpayers with income of €250,000 or more if single and €500,000 or more for qualifying couples- which is currently being considered by the French Parliament.
Some of the proposed measures concerning taxation of individuals, if enacted, would increase the individual income tax "flat rate" that applies for dividends and savings income from 19% to 24%.
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