Tax Measures Included In 2009 Budget To Benefit Eco-Friendly French

by Ulrika Lomas, Tax-News.com, Brussels

03 October 2008

Combined with strategies to improve economic competitiveness and tax fairness, announcements made in the 2009 budget by the minister responsible, Eric Woerth, also reflect government commitments to ensure future sustainable growth for France, highlighting significant tax reforms intended to achieve this and protect the environment.

The key areas in this year’s budget pertaining to the promotion of sustainable growth include tax relief on energy efficiency in the home and incentives for environmentally-friendly activities.

Firstly, the “green” tax initiatives regarding housing. These include:

• The creation of zero rate loans (un prêt à taux zéro or PTZ) to finance work carried out on old residential housing to improve energy efficiency. This new loan could finance the total work carried out within the double limit of EUR300 per metre squared and EUR30,000 per house.
• Facilitating home ownership through tax credits on loan interest and the availability of zero rate loans. These can be improved provided that the houses concerned comply with the low consumption building standard (bâtiment basse consommation or BBC). The duration of the tax credit would be from 5 to 7 years of annual repayments and the uniform rate of 40% would apply for this period. The amount for loans at zero rate would be raised to a maximum sum of EUR20,000.

Secondly, incentives for business which comprise:

• Tax relief aimed at rewarding organic farmers and the timber sector (for example the use of sustainable forestry management).
• Extending and revising the general tax on polluting activities - to encourage the recycling of waste, for example.
• Gradually reducing the financing of bio fuels.
• The extension to the whole of the country of a mileage tax on heavy vehicles from 2011.

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