New French tax program: main provisions

13 June 2017

The tax program announced by the new President of the French Republic elected as of May 7, 2017, Emmanuel Macron, intends to reduce tax and social levies in order to promote productive investments.

Corporate income tax

Corporate income tax currently levied at the rate of 33.33% should be reduced to 25%. The actual law provides for a progressive reduction to 28% which will be applicable to all businesses as of 2020.

Taxation of investment income

The taxation of investment income at the progressive rate of personal income tax (up to 45%) would be replaced by a taxation at the standard rate of 30%. This levy (which would include social levies at the current rate of 15.5%) would apply to all kind of investment income: dividends, interest and capital gains on securities.

The taxation of rental income (taxed at the progressive rate) and of capital gains deriving from the sale of real estate (taxed at the standard rate of 19% after a deduction per year of ownership) would remain unchanged. However social levies would be increased from 15.5% to 17.2%.

Personal income tax

Couples would be given the possibility to declare their income separately whereas currently a joint declaration is compulsory.

The withholding of personal income tax, a reform which was supposed to enter into force at the beginning of next year, is postponed to January 1st, 2019.

Wealth tax

The new President intends to exempt all securities from wealth tax and to restrict its scope to real estate assets.