French Govt Unveils 2010 Supplementary Finance Bill

by Ulrika Lomas, Tax-News.com, Brussels

22 January 2010

French Finance Minister Christine Lagarde and Budget Minister Eric Woerth have recently unveiled details of the country’s 2010 supplementary finance bill, which provides for the introduction of a windfall tax on bonuses.

According to the government, the financial crisis has emphasized the need to reinforce the guarantees offered to both depositors and investors, and to regulate certain practices in terms of the remuneration accorded to professionals within the financial markets (traders).

The bill provides for the introduction of a one-off tax levied on bonuses, paid out for 2009, and in excess of an individual threshold of EUR27,500.

From the proceeds of the tax, the government intends to allocate EUR270m to the deposit guarantee fund to guarantee the protection of depositors and investors.

An improvement in the tax revenue forecast will enable the government to limit the expected budget deficit in 2010 to EUR149.2bn. Predicted tax revenue has been revised upwards by EUR2.1bn in the bill, as a result of three key factors:

• The Constitutional Court’s decision to censure certain measures contained in the government’s initial finance law;
• The revision of predicted growth for 2010; and
• The regularization of the status of tax evaders.

The supplementary finance bill also provides for the modernization of the measure designed to exempt employers hiring temporary workers and job seekers within the agricultural sector from social contributions.

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