The Modified Finance Bill for 2014 (the Bill) was presented to
the French Parliament on June 11 2014 and will be reviewed by the
Finance Committee of the lower Chamber of French Parliament
(Assemblee Nationale) on June 18.
The main measures of this draft budget law are the
The Bill provides for the abolition of the social solidarity
contribution (C3S) in 2015 for companies whose turnover is
below EUR3.25 million in 2015. This contribution should be
definitely ended in 2017.
In addition, the temporary surtax of 10.7% applying to standard
corporation income tax for companies with turnover exceeding EUR250
million will end in December 30 2016 instead of December 31 2015.
Furthermore, from 2017 corporation income tax should decrease
progressively up to a rate of 28% in 2020.
The Bill provides for a tax reduction of EUR350 for a single
taxpayer (EUR700 for a couple) when fiscal income is less than that
of an employee receiving a remuneration equal to 1.1 of the net
French minimum wage (SMIC).
In addition, from January 1 2015 employee contributions should
be reduced for all employees paid between 1 and 1.3 of the French
minimum wage (SMIC).
Also, from January 1 2015 an employer of an employee receiving
the SMIC should not pay any more social security
contributions. This exemption should be decreasing to 1.6
SMIC. The full exemption should also benefit companies
with 20 or more employees, since the difference in contribution
level currently existing between companies with less and more than
20 employees should be ended. Furthermore, the family allowances
contributions should be reduced by 1.8 points for wages below 1.6
SMIC. From January 1 2016 this measure should be extended
through a reduction of the family contributions for the wages below
From January 1 2015 independent businesses (commercial,
agricultural occupations, skilled crafts and self-employed) whose
income is less than EUR53 thousand per year should benefit from a
reduction in their family contributions:
For independent businesses whose income is less than or equal
to three annual net SMIC (slightly more than EUR40
thousand), the exemption rate should rise to 3.1% of the income
base of the family allowances contribution
For independent businesses with an income of between three and
3.8 annual net SMIC, the exemption rate should decrease
gradually until 3.8 annual net SMIC
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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