news details |
|
|
| François Hollande to woo French business with tax cut | | | France: President François Hollande plans to slash capital gains taxes to try to convince investors that France is open for business and repair relations after protests against his policies last year.
Business leaders have been frustrated since the government imposed €20bn in tax increases in the 2013 budget and insisted on sticking to Mr Hollande’s promise to introduce a temporary 75 per cent marginal rate on incomes above €1m.
The tax cut plan comes as Mr Hollande struggles to persuade investors and his European partners that the Socialist government is committed to reforms to revive the stalled economy. It follows an online protest against his decision to raise capital gains tax last year by Les Pigeons, a group of young entrepreneurs.
“The big picture is to give a strong sign that France is a good place to invest and that we are business friendly,” said Fleur Pellerin, minister in charge of small business and the digital economy.
The government denies there has been a tax exodus, saying the departure of actor Gérard Depardieu this year was not typical. But it has acknowledged that a big increase in capital gains taxes on business investors was a mistake.
Mr Hollande is expected to tell a meeting of entrepreneurs at the Elysée Palace on Monday that he will cut the capital gains regime introduced at the end of last year, which imposed total taxes as high as 62 per cent on investors selling out of businesses within two years.
Those close to negotiations with the government say the new regime will include enhanced rebates kicking in after as little as one year, with up to 85 per cent exemptions for those holding an investment in a start-up for more than eight years, compared with 40 per cent today. The “default” exemption rate for capital investment in businesses held for eight years will rise to 65 per cent, also from 40 per cent.
The total tax rate, including social charges and other levies, for an investor at the top marginal rate exiting a start-up after eight years is poised to fall to 24 per cent, from more than 40 per cent.
Officials said the previous restriction of some rebates to those investing in their own companies would be dropped – an important concession to venture capital, private equity and “business angel” investors.
“The way the government has listened to us over the past four months has been positive. They realised they made a mistake,” said Jean-David Chamboredon, a leading figure in Les Pigeons.
Les Pigeons – slang for “the suckers” – rocked ministers when their protest exploded on social networks last year, with more than 70,000 people signing up to their Facebook campaign. Their angry attacks wrongfooted a government more used to criticism from the grand patrons, France’s traditional business elite.
Mr Hollande is also set to announce other measures including a “start-up visa” to fast-track immigration for foreign entrepreneurs, relaxed restrictions on access to credit for owners of failed companies seeking to start a new business, and incentives to direct private savings towards investment in new companies.
The new regime would bring France below the average equivalent tax rates within the Organisation of Economic Cooperation and Development – and below rates imposed by the previous centre-right government, officials said.
Although business leaders will welcome the changes, they are likely to provoke criticism from leftwingers within the Socialist party already uncomfortable that Mr Hollande is making too many concessions to business, including an earlier €20bn tax break to cut labour costs and moves to ease France’s rigid labour market regulation. |
|
|
|
|
|
|
|
|
|
|
|
|
| |
| |
|
|
|
|
 |
|
|
