In the aftermath of the presidential elections in France, let’s take a look at the tax measures proposed by the president during his campaign. His program foresees a continuation of the reduction of the tax burden on French households, which was initiated during his first five-year term.
Regarding income tax
There will be no major reform of the substance. After a reduction of the rate of its first schedule’s bracket in 2020, no new modification of the progressive scale is planned. The French should not experience any tax increase. A decrease is even planned, with the abolition of the contribution to public broadcasting (known as the “redevance télé”).
One measure, however, would lead to an upheaval in the composition of tax households: allowing concubines to declare their income jointly, like a married or civil union couple. Considering societal evolutions, the idea behind this measure is to guarantee equality before tax of all couples, whether they are married, in a civil union or common law. This possibility should take the form of an option for the taxpayer, and not be imposed as a new declarative norm (unlike a married or civil union couple).
Regarding IFI (real estate wealth tax)
No change or elimination is planned. Like the income tax, the tax on real estate wealth should not increase.
Regarding taxes on savings and wealth
No change in taxation is considered by the President. The rates of the various flat-rate and social security levies will be maintained.
Regarding local taxes
80% of households no longer pay the habitation tax for their main residence. Its disappearance should continue and be finalized in 2023 for the remaining 20%. No new local tax will replace it.
As for the property tax, simulations of the effects of updating the property tax base for individuals must be presented to Parliament. The president wants to continue the update of property rates (which was already done for businesses), while avoiding changes that are too abrupt for taxpayers.
Inheritance and gift tax
The allowance for direct line inheritances will be increased from €100,000 to €150,000. For inheritances in indirect line (grandchildren, siblings, niblings, without family ties), the allowances will be uniformly raised to €100,000. This measure acknowledges the heavy tax rate on this type of inheritance, and to facilitate the transmission of the most modest inheritances, made difficult by the constraints of an almost confiscatory taxation.
Finally, in the case of recomposed families, the children of the spouse will be assimilated to the biological children for the calculation of the inheritance tax. No prior adoption will be necessary to take them into account.
When it comes to family business transmission, the Dutreil regime will be preserved. Its maintenance aims at keeping this dynamic of growth and transmission of family businesses that its simplification had allowed.
In order to reduce production taxes on companies, the CVAE will be abolished for all companies. As for the self-employed, they will be able to benefit from a charges’ reduction. This will go up to 550 € per year.
Finally, the President’s program schedules the tripling of the exceptional purchasing power bonus, or “ prime Macron”. Paid by employers to employees, it would increase from €1,000 to €2,000 to a bonus of €3,000 to €6,000 without charges or taxes. The payment of this bonus, or instead of a profit-sharing bonus, would become mandatory for companies paying dividends.