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Today’s Top Headlines

France Plans Tougher 'Exit Tax'

by Ulrika Lomas,, Brussels

03 December 2013

The French National Assembly Finance Committee has adopted an amendment to the country's 2013 year-end supplementary finance bill, toughening the so-called "exit tax."

Since March 3, 2011, French taxpayers with wealth in excess of EUR1.3m, electing to transfer their fiscal residence abroad, are subject in France to a tax on latent capital gains crystallized at the time of their departure, if they cede the assets within eight years.

Significantly tightening the existing provisions, the adopted parliamentary amendment provides that the threshold for application of the levy should be lowered to EUR800,000. Furthermore, the measure stipulates that the tax should be due if taxpayers cede their assets within 15 years following their expatriation, rather than eight.

Defending his proposal, Socialist budget rapporteur Christian Eckert argued that taxpayers electing to transfer their fiscal residence outside of France should not be given a fiscal advantage, compared to those choosing to remain in France. Eckert pointed out that individuals in France are subject to capital gains tax even after an eight-year holding period.

Despite the tough stance, the measure is expected to have very little impact on the public finances. Last year, the exit tax served to yield a meagre EUR53m for the state.

The amendment will be put to the vote in the French National Assembly on December 3.

TAGS: individuals | capital gains tax (CGT) | Wealth | Finance | tax | budget | France | exit tax

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