TaxPersonal TaxFrance plans new tax on dividends

France plans new tax on dividends

Will offset growing deficit in the social security system

Investors in France are likely to be hit with a new tax on dividends with the
government confirmed plans for its implementation.

The proposed tax on share dividends is expected to raise around £1bn next
year, the Health Ministry stated as it
announced the budget for the social security system for 2008.

News of the new tax comes as concerns mount over the continued deterioration
of France’s public finances following warnings from prime minister
Francois Fillon
that the budget is in a ‘critical’ state with the government effectively in ‘a
state of bankruptcy’.

At the same time president
Nicolas Sarkozy is
trying to push through radical reforms of the French tax, welfare and labour
market systems, in an attempt to create more of an enterprise culture and boost
economic competitiveness.

Further reading:

Sarkozy triples French IHT threshold

Sarkozy’s mortgage tax reforms cut down

UK joins France in green tax crusade

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