• Service: Tax, Global Mobility Services, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 4/2/2013

France - Proposed 75% corporate-level tax on €1 million salaries 

April 2: French President François Hollande announced a proposal that would impose a corporate-level tax—at a rate of 75%—on payments of salaries exceeding €1 million.


In late December 2012, France’s Constitutional Court (Conseil Constitutionnel) invalidated as unconstitutional a provision that would have imposed a 75% rate of individual income tax on salaries exceeding €1 million.

New corporate-level proposal

Following the December 2012 decision of the French Constitutional Court declaring as unconstitutional the 75% individual income tax bracket on remuneration exceeding €1 million, President Hollande announced that a new draft law would be proposed to the French Parliament before the end of 2013.

Under this expected draft, the tax liability would now be imposed on and payable by companies / employers—instead of on the individuals / employees—on the portion of salaries that exceeds €1 million.

KPMG observation

Tax professionals with FIDAL* observe that the scope of this proposed tax levy would be very broad—i.e., every company established in France would be subject to and liable for this tax.

Yet, compared to the original provision (which would have applied for French individual residents receiving salary payments of €1 million or more), the new proposed draft could possibly allow companies to consider the effects of and plan for this tax. In particular, multinational companies might consider revisiting their “salary streams” to consider what would be the financial impact of the proposed 75% levy.

For more information, contact a tax professional at Fidal Direction Internationale* in Paris or with KPMG’s French Tax Center in New York:

Gilles Galinier-Warrain, French Tax Center, KPMG LLP, New York

+1 212-954-8605

Olivier Ferrari, Tax Partner

+33 (0)1 55 68 14 76

Patrick Seroin, Tax Partner

+33 (0)1 55 68 15 93

*Fidal Direction International is a French law firm that is independent from KPMG and its member firms.

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