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France Unveils Tax Breaks For Artisans And Traders

by Ulrika Lomas, Tax-News.com, Brussels

25 November 2013


Following a meeting with the professional union of artisans, French Budget Minister Bernard Cazeneuve and Trades Minister Sylvia Pinel unveiled a raft of fiscal measures aimed at providing tax relief to both artisans and tradespeople in France, as well as to home owners wishing to carry out energy efficiency improvements.

In the communiqué, the Government clarified the conditions for application of a 5.5 percent reduced rate of value-added tax (VAT) for home energy efficiency improvements. This rate will apply to "induced" or associated ancillary works undertaken. For other home improvement works carried out, a reduced rate of 7 percent will apply, provided that a signed quote and significant down payment (minimum 30 percent) are in place by December 31, 2013, and that the works are completed before March 1, 2014.

To address the most urgent concerns facing artisans, the Government will allow self-employed workers to calculate their provisional social contributions on the basis of their estimated income for the current year, rather than on the basis of income reported the year before. This measure is intended to offer significant flexibility for entrepreneurs facing a considerable drop in income.

Furthermore, the Government aims to lessen the impact of the envisaged pension contribution rise next year, linked to its pension reform plans. Consequently, pension contributions will rise by just 0.2 percent in 2014 for artisans and tradesmen, instead of by 0.3 percent.

Moreover, local authorities in France will be able to waive the corporate land tax contribution (CFE) in 2013 for taxpayers subject to the minimum contribution. In addition, the Government proposes capping the maximum contribution for modest income taxpayers at EUR500 (USD673.4). According to the Government, France's 2014 finance bill provides for a revision of the CFE tax scale, to better take into account the actual income of artisans and tradespeople.

Finally, the Government aims to improve the simultaneous processing of requests for deferred payment of social contributions and taxes.

The Government aims to address the issue of lowering the cost of labor, as sought by the UPA, within the framework of upcoming discussions between Ministers and the country's social partners on a complete overhaul of taxation in France, planned for 2015.

TAGS: artisans | tax | value added tax (VAT) | energy | entrepreneurs | corporation tax | tax rates | France | tax breaks | tax reform | trade | individual income tax | European Union (EU) | Europe

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