THE FRENCH SOCIALIST GOVERNMENT has been forced into an embarrassing U-turn over its controversial profits tax, just two weeks after proposing it in its 2014 Finance Bill.
It comes as French manufacturers claimed that it would unfairly penalise them in the global marketplace.
The 1% operating profits levy - based on EBITDA - was proposed on the 25 September. It was designed to help bring down the French deficit, currently 95.1% of GDP - one of the highest within the eurozone countries. France's overall tax burden, 46.1% of GDP, is among the highest in the developed world.
Finance minister Pierre Moscovici has instead confirmed the government will seek to raise the existing corporation tax rate.
Earlier this year, the European Commission gave France an additional two years to bring its deficit to below the 3% below GDP target for Euro-currency countries.
Business service company TMF Group's global head of tax Richard Asquith said: "The new tax hit a wall of protest as it was seen as hurting France's global prospects. It is not yet clear if a rise in the existing corporation tax will be enough, or whether more spending cuts will be required."
You may also like
If budgeting is to have any value at all, it needs a radical overhaul. In today's dynamic marketplace, budgeting can no longer serve as a company's only management system; it must integrate with and support dedicated strategy management systems, process improvement systems, and the like. In this paper, Professor Peter Horvath and Dr Ralf Sauter present what's wrong with the current approach to budgeting and how to fix it.
In this white paper CCH provide checklists to help accountants and finance professionals both in practice and in business examine these issues and make plans. Also includes a case study of a large commercial organisation working through the first year of mandatory iXBRL filing.