On 24 August 2011, François Fillon, Prime Minister of France, announced a series of austerity measures aiming at reducing the French budget deficit by levying €12 billion of additional tax revenues. These measures were adopted on an emergency basis by the French Parliament on 8 September in the context of a second modified Finance Law for 2011 which was published on 19 September. They are therefore now in force.

In addition to a series of measures concerning individuals, details of which are not provided in this summary (but which include changes to the rules on taxation of capital gains on real estate and an increase in social contribution levies), two measures should be given particular attention given their immediate impact in terms of cash flows and valuation of investments: the modification of the rules relating to loss carry forwards and the changes to the participation exemption regime (capital gains on transfer of substantial shareholdings).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.