Chirac Calls For Bold Cut In French Corporate Tax Rate

by Ulrika Lomas, Tax-News.com, Brussels

05 January 2007

French President Jacques Chirac has said that he envisages a cut in the country's corporate tax rate to as low as 20% within five years, which would give France one of the lowest rates of corporate tax in the European Union.

In his New Year address, Chirac predicted that the corporate tax rate, currently 33%, would fall to its lowest level for 25 years by the end of 2007.

"Fiscal competitivity compared to other countries is the major challenge," the president said.

Chirac also called for additional tax incentives for companies which share their profits equally between shareholders and employees. Such firms should be allowed to pay a special corporate tax rate of 10%, he stated.

The ruling centre-right party has made easing the tax burden on business and individual taxpayers a high priority ahead of this year's national elections.

Last year, Prime Minister Dominique de Villepin announced that payroll taxes for workers earning the minimum wage at small companies will be eliminated in July 2007 in an effort to reduce the constraints that hinder job creation.

Recommended