France announces the Finance Bill for 2014
Update from Nair & Co.’s International Tax Team
(Bristol, UK) - The French Finance Bill for 2014 was presented by Finance Minister Pierre Moscovici and Budget
Minister Bernard Cazeneuve on 11 September 2013, reports Nair & Co.’s International Tax Team. The new bill (PLF
2014) includes tax measures targeted at increasing employment and improving the current social model in France.
The measures include several changes in the regulatory framework of corporate and individual taxation. Significant highlights include the following:
For the purpose of the corporate income tax base, businesses would need to take into consideration operating revenue [Earnings before Interest Tax Depreciation and Amortization (EBITDA)] instead of turnover. Changes would be introduced to certain employer related contributions paid by young innovative companies JEI. The Bill offers incentives for JEIs and small- and medium-sized companies focused in the areas of robotics. It also encourages long-term investment and certain risk taking. There are also changes to the annual minimum tax applied to turnover (IFA).
The new provisions re-establish the cost of living index to individual income tax brackets and decrease the limit for the family coefficient.
The Bill includes plans to reform pension; the PLF 2014 will increase social contributions by 0.3 per cent in 2014, this will be shared between employees and employers. The above is a summary of a few of the measures included in the Finance Bill for 2014. It is recommended that French companies review the Bill carefully and prepare to make appropriate adjustments to existing processes/ systems, in order to take advantage of the new benefits and avoid non-compliance. For more information about doing business overseas or to know more about our International Tax Services team
please contact us.
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