New President – new taxes in France!

20.06.2012 French President Francois Hollande suggested to establish income tax of 75% rate for those, whose income exceeds EUR 1 million per year.

In addition, the need to increase tax and cover the national budget deficit pushed the French Government to enact a new tax on dividend payments.

The French government plans to introduce a 3% tax on dividends at source and its taxpayers will directly own companies that pay dividends. However, this tax will not apply if the payment of dividends to companies if their share is not less than 5%.

As officials explained, it should encourage large companies to reinvest profits in development. According to experts’ opinion, the new tax will have the greatest impact on the activities of the 40 largest corporations in France, which annually pays out as dividends to its shareholders at least 45 billion euros.

Thus, it is expected that in the first year the tax on the dividends paid will be able to bring the budget in France at least 300 million euros.

The introduction of new tax is regarded as part of the Government of France, during which it is plannig before the end of 2012 to draw the budget additional tax revenues of at least 10 billion euros.

Expert’s opinion

French President Francois Hollande suggested to establish income tax of 75% rate for those, whose income exceeds EUR 1 million per year.

In addition, the need to increase tax and cover the national budget deficit pushed the French Government to enact a new tax on dividend payments.

The French government plans to introduce a 3% tax on dividends at source and its taxpayers will directly own companies that pay dividends. However, this tax will not apply if the payment of dividends to companies if their share is not less than 5%.

As officials explained, it should encourage large companies to reinvest profits in development. According to experts’ opinion, the new tax will have the greatest impact on the activities of the 40 largest corporations in France, which annually pays out as dividends to its shareholders at least 45 billion euros.

Thus, it is expected that in the first year the tax on the dividends paid will be able to bring the budget in France at least 300 million euros.

The introduction of new tax is regarded as part of the Government of France, during which it is plannig before the end of 2012 to draw the budget additional tax revenues of at least 10 billion euros.

On the basis: http://uk.reuters.com/

Lomakin Yaroslav ( Managing Partner of Honest & Bright Company Ltd .)