As part of a range of austerity cuts following the latest Euro currency rescue agreement, the government of France announced plans to impose a ‘temporary’ corporate tax surcharge of 5 percent for 2012 and 2013 for large companies. The French government also plans to increase the ‘reduced’ value-added tax (VAT) rate of 5.5 percent to 7 percent, with certain limited exceptions. The move is part of France’s second austerity package designed to increase corporate tax revenue and reduce government expenditure and debts. It is said that the extra cuts make the 2012 budget one of the toughest since 1945.
What are the New Corporate Tax Proposals?
The corporate tax proposal mainly focuses on two measures that would affect business taxpayers. A temporary 5percent surcharge on corporate income tax would be implemented in 2012 and 2013 for companies having an annual turnover of E250 million or more. The “reduced VAT rate” which is currently at 5.5 percent will be increased to 7percent for all goods and services (with an exception to food and certain goods/services provided to disabled persons).
Tax proposals for Individual Taxpayers
The French government also introduced an exceptional 4 percent individual income tax on taxpayers with income of E250,000 or more if single and E500,000 or more for qualifying couples which is currently being considered by the French Parliament. Some of the proposed measures concerning taxation of individuals, if enacted, would increase the individual income tax ‘flat rate’ that applies for dividends and savings income from 19 percent to 24 percent.
Take the help of an expert
When doing business overseas, the last thing any organization wants to do is to pay your hard-earned profits as unnecessary taxes, especially in the current economic climate. It is best to partner with an expert to help simplify the process and overcome any challenges in taxation. A business consultant will have a complete up-to date information on how to keep up with the ever changing laws pertaining to expat tax, global transfer pricing, regulatory filing, to name a few. A dependable professional partner in an international expansion can help get rid of any concern regarding your overseas expansion project, thereby allowing you to focus on building your business.