France May Improve Corporate Tax Environment
05 July 2013
Posted by: Author: Ulrika Lomas
Author: Ulrika Lomas
The French Finance Ministry has published Thierry Mandon's report on plans to simplify the regulatory and tax environment for businesses in France.
According to Mandon, any envisaged simplifications to the existing system must be a collaborative effort between the Government and stakeholders, based firmly on the expectations of corporations in France and jointly drafted with them. Mandon advocates that objectives should be fixed over a period of three years, aimed at abolishing 80 percent of business costs that result from procedural complexities and delays. Parliament and the Court of Auditors should also be involved in the drafting and evaluation of the tri-annual action plan, Mandon stresses.
As a matter of priority, Mandon highlights the urgent need to reform and to streamline the research tax credit (CIR) provisions. To ensure that the CIR tax break is more in line with economic realities in future, certain expenditure that is currently excluded from the CIR calculation, without any economic reason or legal basis, must be included in the scope of the mechanism, Mandon says. Furthermore, the depreciation of all assets allocated to research and development should be taken into account, Mandon argues. Mandon also recommends notably that the financial year and not the calendar year is used for the CIR calculation and that all patent accounting expenses and all social contributions are taken into consideration.
Other tax measures advocated in the report include plans to reduce administrative procedures for tax audits, by imposing a deadline on the Tax Administration for issuing a response to small- and medium-sized companies in France. Tax instructions are to be published by specific dates to ensure visibility, and a clear point of contact is to be established within the Tax Administration, to liaise with businesses and to keep detailed and accurate records during corporate tax audits.
Finally, Mandon suggests that corporate tax return forms are simplified, that reporting procedures for the levy on the value added by a company (CVAE) are simplified and included in the tax return, that the tax on company cars (TVS) is included on the tax return, and that a single form is created to enable taxpayers to file a return online for the local tax on external advertising (TLPE).