Global Daily Tax News, French Lawmakers Agree New 2025 Finance Bill, (Feb 13, 2025)

Both houses of France's parliament have now signed off on a replacement Finance Bill for 2025.

For individuals, the new legislation provides for a minimum 20-percent tax on taxpayers with income exceeding EUR250,000, and the indexation of individual income tax thresholds for inflation. The tax exemption for tips will apply in 2025.

The Government's proposed exceptional levy on the profits of large companies has been retained in the new Bill, applying to companies with turnover greater or equal to EUR1bn in the years 2024 or 2025. As in the previous bill, two progressive rates will 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. The tax will be payable in 2025.

The Bill postpones the repeal of the Company Value Added Tax (CVAE) until 2030, rather than 2027, and provides for the introduction of a tax on certain corporate share buybacks. The innovation tax credit (CII) will be extended for three years but the rate will be reduced by 20 percent. Changes will also be introduced to the research tax credit to save the taxpayer EUR440m per year, based on recommendations from the Senate Finance Committee.

Higher taxes will be introduced on polluting vehicles but consumers will benefit from electricity tax reliefs.

The value-added tax exemption threshold will be lowered to EUR25,000.

Finally, the Bill provides for a waiver for sums donated within families for the acquisition or construction of a main residence, a property for long-term rental, or for energy renovation work to a main residence.