Global Daily Tax News, France Approves Special Finance Law After Government's Collapse, (Dec 26, 2024)

French lawmakers in both houses of parliament have signed off on a special finance bill, following the collapse of the Government.

The special finance bill enables the collection of existing taxes and for the Finance Minister and social security organizations to borrow to cover spending needs.

The bill was adopted following the breakdown in negotiations on this year's Budget and Finance Bill. The Government's plans had included tax hikes and spending cuts worth some EUR60bn.

France's Budget, announced in October, included plans for an "exceptional and temporary contribution" on the profits of the largest companies. It is proposed to apply to companies with turnover greater or equal to EUR1bn, affecting about 400 companies.

The new levy was to apply to profits derived from France in the years 2024 and 2025. Two progressive rates would apply: 20.6 percent of the corporate tax due for 2024 for companies with a turnover greater than or equal to EUR1bn and less than EUR3bn and 41.2 percent for those with at least EUR3bn in turnover.

In addition, the Government proposed to introduce a tax on large maritime transport companies with turnover greater than EUR1bn, for two financial years, on income from maritime freight operations, at a rate of nine percent in the first year and 5.5 percent in the second.

The Government also plans to introduce a tax on share buybacks, again only on companies with turnover of more than EUR1bn.

A new minimum tax levy was also to be introduced for high-earning individuals and couples of 20 percent, applying to those earning EUR250,000 (EUR500,000 for couples) for three years.

The special finance bill was approved by the National Assembly on December 16 and by the Senate on December 18, 2024. After the appointment of a new Government, lawmakers will begin debating a Finance Bill in the new year.