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France Definitively Adopts Social Security Finance Bill

by Ulrika Lomas, Tax-News.com, Brussels

05 December 2013


The French National Assembly has definitively adopted the country's 2014 social security finance bill (PLFSS 2014), providing for a raft of fiscal measures aimed at reducing the social security deficit by EUR3.4bn, from EUR16.2bn this year to EUR12.8bn next year.

The PLFSS 2014 subjects "multi-support" life insurance contracts, combining traditional savings and unit-linked components, up to now exempt from income tax, to social levies at a rate of 15.5 percent from September 26, 2013. Furthermore, the legislation imposes a tax on energy drinks, namely on sugared drinks containing levels of caffeine in excess of 220 milligrams per liter. As a result, the cost of a 25 centiliter can of Red Bull will rise by 25 cents, or EUR1 per liter, from next year.

Other key fiscal measures provided for in the PLFSS 2014 include plans to increase employers' and employees pension contributions by 0.30 percent between 2014 and 2017, with a 0.15 percent rise planned for next year. In addition, the special tax levied on insurance contracts (TSCA) is to increase by 5 percent for so-called "non-responsible" complementary health insurance contracts, rising from 9 percent currently to 14 percent in 2014.

Finally, the PLFSS 2014 lowers the cap for the family income tax break (quotient familial), reduces employers' contributions to the family sector by 0.15 percent, thereby fully offsetting the pension contribution rise for enterprises, and postpones the indexation of pensions until October 1, 2014, with the exception of the most modest pensions.

TAGS: tax | pensions | energy | insurance | employees | corporation tax | legislation | tax rates | social security | individual income tax | Other

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