French Tax Budget for 2013

A review of the French tax budget proposals for 2013

BDO / PKF MERGER

Since this article was written, PKF and BDO companies have merged, effective from 10 April 2013. The French tax team remains unchanged and now operates within the BDO Guernsey office. It is apparent already that this merger offers great opportunities to extend the ranges of services and assistance they can offer to their clients.

New contact details:

Tel: +44 1481 724561
Fax: +44 1481 711657
Email: french.tax@bdo.gg
Website: www.bdo.gg - click on French Tax

The original article follows:

French Tax Budget Proposals for 2013

The first review of the budget for 2013 was completed on 23rd October and below is a succinct and non-exhaustive list of the new measures or proposals:

i) The freezing of the income tax bands and creation of a band taxed at 45% for income in excess of 150,000 Euros has been approved.

ii) The capping of the 10% deduction on salaries would be reduced from 14,157 Euros to 12,000 Euros.

iii) Bank interest and dividends will be subject to income tax at the barème rates and social surcharges. The taxation at source which was an option in lieu of barème rates will only apply as a payment on account in advance of the tax, unless the net taxable income of the household falls below certain amounts which vary depending on the family situation and the type of investment income.

iv) The taxation at source in respect of income paid in a non-cooperative tax jurisdiction or paid to persons or entities established in such territories would increase from 55% to 75%.

v) Under strict conditions certain company directors should be able to maintain the CGT 34.5% in respect of taxable gains arising on the sale of their shareholding in the company for which they act as directors instead of having to apply the barème rates.

vi) The wealth tax limit is maintained at 1.3m Euros for 2013. The reduction of 300 Euros per dependant is suppressed.

vii) The death duty exemption in respect of properties situated in Corsica may be prolonged to 31st December 2017.

viii) The exceptional extra corporation tax charge will be extended for two years (to 31st December 2015).

About the author

This article was provided by PKF (Channel Islands) Limited. For further information, assistance with the preparation of French tax returns or specific advice on the French tax implications of a permanent move to France or French property purchase and structuring, please contact Virginie Deflassieux or Catherine Le Pelley at french.tax@pkfci.com, or telephone +44 1481 727927. Alternatively visit their website www.pkfci.com.

DISCLAIMER

This document has been prepared as a general guide. It is not a substitute for professional advice. Neither PKF (Channel Islands) Limited nor its directors or employees accept any responsibility for loss or damage incurred as a result of acting or refraining to act upon anything contained in or omitted from this document. PKF (Channel Islands) Limited is a member firm of the PKF International Limited network of legally independent firms and does not accept any responsibility or liability for the actions or inactions on the part of any other individual member firm or firms.

* UPDATES ON FRENCH TAX LAWS *

Further information on French tax can be found on our site using this link:

Moving to France

Please note that information given in the articles found here may supersede the relevant sections above.

Additional articles which may be of interest:

French Tax End of Year Summary - December 2012
French Trust Laws and French Tax - November 2012
French Tax Changes in July 2012
Capital Gains Tax in France on Property
Tax in France
French Wealth Tax
Inheritance Tax in France and the Assurance Vie or PCP (Private Client Portfolio Bond)
French Tax Changes in 2011
Holiday Homes in France - how to avoid Capital Gains Tax when you want to sell

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