Global

Details

  • Service: Tax, International Corporate Tax, Global Indirect Tax, International Executive Services, Global Compliance Management Services
  • Type: Regulatory update
  • Date: 8/17/2012

France - New tax law enacted; future tax amendments expected 

August 17:   The first tax measures of the new government were enacted today, 17 August 2012, with publication of the second amended finance act for 2012 (deuxième loi de finances rectificative pour 2012).

Future tax legislation

With enactment of the new government’s first tax measures, attention now turns to potential future tax legislative proposals that could be adopted before the end of 2012, including:


  • Corporate income tax—(1) modification of the rules on the deduction of loan interest; and (2) reinforcement of transfer pricing document requirements
  • Individual income tax—(1) creation of a 45% bracket and of a 75% bracket (to apply for annual income exceeding €1 million); and (2) repeal of the flat-rate tax on dividends
  • Wealth tax—reinstatement of a progressive rate schedule, ranging from 0.55% to 1.8%

It is also anticipated that other tax changes could include an increase in the general social security contribution (known by the French acronym CSG) and the introduction of a “Google” tax.

Tax provisions enacted today, affecting companies and individuals

The publication of the law establishes the effective date for certain measures. For example, the 3% tax levy on dividend distributions (including constructive dividends) is effective 17 August 2012.


Other measures have established effective dates. For example, the increased rate of the financial transaction tax, from 0.1% to 0.2%, is effective for transactions and share purchases made as of 1 August 2012.


Still, other measures have effective dates that are related to dates of legislative action.


Read an August 2012 report [PDF 218 KB] prepared by Fidal*: First tax measures of the new government (publication of the 2nd amended finance act for 2012)


* FIDAL is an independent legal entity that is separate from KPMG International and its member firms.




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