France is planning to hold reforms

10.11.2011 France is discussing the package of measures to overcome the crisis. These steps relate to tax and budget spheres.
The government is planning thanks to the package of measures to avoid state debt by 65 bln. euro by 2016. According to this official program by 2016 the volume of current tax breaks will be reduced by 2,6 bln. euro, e.g. it’s planned to abolish such breaks for income from rental property investments.
One more key issue is a planned increase by 5% of the corporate tax rate (the current one is 33,33%) for large corporations of France with annual turnover exceeding 250 mln. euro.
Also the government is planning to increase the current reduced VAT rate of 5,5% to 7%.

Expert’s opinion

“France has drafted the package of anticrisis measures for tax and budget spheres. According to the government calculations the state will get approximately 3,4 bln. euro, 1,7 of which will be collected in 2012 already, as the result of the reforms. However, to our opinion, the coming changes are radical enough, in particular concerning the issue of many tax breaks abolishment. This can cause massive waves of protest all over the country”.

On the basis: www.tax-news.com

Vorontsova Maria ( the lawyer of international consulting department of Honest&Bright)