Edouard Philippe, head of the French government announced on Tuesday, July 04, 2017, the postponement of the reform of the ISF (wealth tax) to 2019. This reform, initially planned for 2018, aims to encourage Investments in businesses.
The reform “will be voted this year, in the budget law for 2018, and will enter into force only in 2019,” said the prime minister in his statement of general policy at the National Assembly.
Emmanuel Macron, during the presidential election campaign had promised to turn the French wealth tax (ISF°) into a “tax on property assets”. This transformation would be achieved by removing from the perimeter of this emblematic tax the movable assets, savings or financial investments .
President Macron had assured that this reform would be implemented as early as 2018 at the Vivatech summit. “I want us to facilitate the emergence of champions, by no longer taxing the wealth tax invested in companies, start-ups, innovation (…) This will be done in the next law of finance, “he said.
As a reminder, the aim of the reform is to encourage the most affluent taxpayers to favor investments in the real economy.
However, it could lead to a shortfall of two billion euros in public finances.
The French wealth tax was created in 1982 by François Mitterrand under the name of “tax on large fortunes”. It is paid by households whose financial, movable and immovable assets exceed 1.3 million euros. However, the taxpayers subject to the wealth tax may benefit from a ceiling, since the income tax added to the ISF must not exceed 75% of the income, a level deemed confiscatory by the Constitutional Council.
Cabinet Roche & Cie, Chartered english speaking accountant in Lyon, France.
Specialist in Real estate and non-résidents taxation.