France Eyes EUR3bn Cut In Corporate Tax Breaks
18 June 2013
Posted by: Author: Ulrika Lomas
Author: Ulrika Lomas
Commissioned by the French Government, the "Queyranne" report advocates that the amount of financial aid and tax breaks currently benefiting businesses in France be reduced by around EUR3bn (USD4bn).
Led by the French Socialist Jean-Jack Queyranne, the mission recommends that two thirds of the proposed fiscal effort is realized by planing corporate tax breaks, while the remaining third is achieved by lowering public expenditure.
The report underlines the importance of maintaining certain vital tax shelters, however, including the reduced rate of value-added tax (VAT) accorded to the construction industry, and the newly created competitiveness and employment tax credit (CICE).
Furthermore, the report suggests cutting the amount of taxes allocated to the national cinema center to the tune of around EUR150m and reducing levies flowing to the chamber of commerce and industry by approximately EUR400m. The report also proposes that the tax regime applicable for listed real estate investment companies be revised.
Finally, the report underlines the importance of revising existing tax advantages accorded to French overseas departments and reviewing fuel tax breaks. These include the reduced rate of the domestic tax on the consumption of energy products (TICPE) currently benefiting taxis, farmers, and road hauliers in France. A revision of the Livret de Développement Durable (LDD), the tax-free sustainable development savings account, is also recommended.
Each year, an estimated EUR60bn in fiscal aid (subsidies, tax breaks, loans, investments in own capital) is used to support businesses in France. The Government had tasked the mission back in February with analysing the system, and with identifying EUR2bn in savings, namely EUR1bn in 2014 and a further EUR1bn in 2015. The mission has therefore gone beyond its initial remit.