CONTINUEThis site uses cookies. By continuing to browse this site you are agreeing to our use of cookies. Find out more.
  1. Front Page
  2. News By Topic
  3. France Exits EU's Excessive Deficit Procedure

France Exits EU's Excessive Deficit Procedure

by Ulrika Lomas,, Brussels

01 July 2018

France has made adequate fiscal consolidation efforts to exit the EU's excessive deficit procedure, the EU Council recently agreed, while calling on Hungary and Romania to adopt tax or expenditure measures to shore up their finances.

The findings came alongside the release of "country specific recommendations" for each of the 28 member states on tax and spending policy.

On France's tax regime, the EU said despite recent reforms, including to lower the labor tax wedge, the French tax system "continues to be characterized by a high level of complexity, with tax expenditures, inefficient taxes, and taxes on production forming barriers to a well-functioning business environment." It added that 192 taxes yield relatively little in revenue (less than EUR150m, or about USD175m, a year) and yet very few have been repealed since 2014.

For Romania, the EU focused on low levels of compliance, especially in relation to the value-added tax regime, calling for enforcement actions.

Finally, for Hungary it recommended further changes to shield some low-income groups who have benefited less from recent labor tax reforms. It added that the overall complexity of the tax system, coupled with the continued presence of sector-specific taxes, remains a weakness. It added that the absence of withholding taxes on outbound (i.e. from EU residents to third country residents) dividend, interest, and royalty payments made by companies based in Hungary may lead to those payments escaping tax altogether, if they are also not subject to tax in the recipient jurisdiction.

TAGS: environment | compliance | tax | business | value added tax (VAT) | Hungary | interest | Romania | enforcement | withholding tax | France | tax reform | Europe | BEPS

To see today's news, click here.


Tax-News Reviews

Cyprus Review

A review and forecast of Cyprus's international business, legal and investment climate.

Visit Cyprus Review »

Malta Review

A review and forecast of Malta's international business, legal and investment climate.

Visit Malta Review »

Jersey Review

A review and forecast of Jersey's international business, legal and investment climate.

Visit Jersey Review »

Budget Review

A review of the latest budget news and government financial statements from around the world.

Visit Budget Review »

Stay Updated

Please enter your email address to join the mailing list. View previous newsletters.

By subscribing to our newsletter service, you agree to our Terms and Conditions and Privacy Policy.

To manage your mailing list preferences, please click here »