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. French Employers Non-Plussed By SME Tax Cut Plan

French Employers Non-Plussed By SME Tax Cut Plan

by Ulrika Lomas,, Brussels

26 August 2016

The French Government intends to introduce a partial corporate tax cut in its Budget for 2017, according to Prime Minister Manuel Valls, although the proposal has been criticized as a complex "half measure" by France's main employers' federation.

In a recent interview with weekly news magazine L'Express, Valls revealed that an intermediate rate of corporate tax will be introduced as the Government continues with its attempts to relieve the tax burden, particularly on small- and medium-sized enterprises.

The headline rate of corporate tax in France is currently 33.33 percent. However, qualifying SMEs are entitled to pay a reduced rate of 15 percent on the first EUR38,120 (USD43,000) of profits. Under the plan disclosed by Valls, a 28 percent rate would apply after this threshold, although he did not specify where any upper income threshold would fall for the new corporate tax bracket.

While the Government has been congratulated by businesses for recognizing the need to reduce corporate tax, Medef, France's largest employers' association, slammed the proposal as a "complex half-measure" that will do little to relieve the tax burden.

Medef suggested that the added complexity of a third corporate tax bracket would probably outweigh the benefit of reduced taxes for companies qualifying for the tax cut.

Commenting on the proposal, Geoffroy Roux de Bezieux, Executive Vice President of Medef, said that the Government's willingness to tackle France's high tax burden - "a concern for companies and European partners" - is "commendable." However, he contended that the measure announced by Valls "is too complex and not up to the challenge."

"Companies need clear signals and no new complexities," he added.

TAGS: tax | business | corporation tax | tax rates | France

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 »