Global Daily Tax News, French Opposition Parties Expected To Block 2025 Budget, (Oct 28, 2024)

With opposition lawmakers pushing for substantial amendments to the French Budget, France's minority Government is widely expected to use Article 49.3 of the Constitution to bypass parliament to secure approval of its original Budget plans.

Such a move would likely then trigger a vote of no confidence in the government and early elections.

Opposition lawmakers have supported an amendment to the Government's earlier announced plans for a levy on France's highest earners, which would make the tax permanent rather than temporary.

France's Budget, announced earlier this month, 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 will 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 to 41.2 percent for those with at least EUR3bn in turnover.

In addition, the Government intends 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 will also be introduced for high-earning individuals and couples of 20 percent, applying to those earning EUR250,000 (EUR500,000 for couples) for three years. It is this levy that opposition parties have supported making permanent.