| Publications | France A-Z | France/U.S. Relations | France in the U.S. | News | Aller aux Etats-Unis | Just for Kids | Going to France | Contact |
|
FRENCH TAXATION
This paper offers a brief overview of French taxation. It should in no event be construed as the official doctrine of the department by which it has been drafted) CONTENTS INTRODUCTION PART ONE: income taxes PART TWO: taxes on expenditure
PART THREE: property taxes
PART FOUR: local direct taxes
LEXICON APPENDICES * List of States with which France has signed a convention for the avoidance of double taxation
INTRODUCTION Mainly intended for foreign readers, this brochure is an outline of the French tax system. To understand French taxation, it is first necessary to determine the place of taxation among mandatory levies in general and thereafter to place taxation in the French legal system. I - Definition of tax compared with other compulsory levies Mandatory levies include taxes, additional levies, fees for services rendered, customs duties and social security contributions. Taxes are financial burdens borne by individuals and legal entities according to their ability to contribute, without a specific compensation to public expenditure and economic and social objectives standard by the public authorities. Additional levies, which account for a very small part of compulsory levies, are created for economic, professional or social purposes in favor of statutory or private law bodies other than the State, local government authorities and their public administrations, i.e. most often professional organizations. Fees for services rendered (and fees paid for the use of certain public services or in return of the right to use them) are also mandatory levies but are not strictly speaking considered as taxes as they entitle the payer to a compensation. Customs duties are distinguished from taxes by their strictly economic characteristic, as their purpose is to protect the domestic market. However, certain mandatory levies charged by the customs are taxes: the value-added tax collected on goods imported from non-Member States of the European Union, excise, and domestic tax on mineral oil products which is applied regardless of their origin. Lastly, although mandatory, social security contributions are not taxes as they are assessed for a specific purpose - social protection - and as benefits are paid in return. Moreover, such contributions are not voted by Parliament but are standard by ministerial decrees after consultation of labor and management. However, certain taxes assessed on the income of individuals are fully earmarked for social organizations and do not entitle taxable persons to a direct compensation. II - The position of tax in the French legal system Legally, tax is rooted in Article 13 of the Declaration of Human and Civic Rights of 1789, which provides for equitable apportionment of tax among all citizens according to their ability to contribute. Article 14 of this Declaration provides that citizens have the right to ascertain, personally or through their representatives, the necessity of public contribution, to consent to it freely and to monitor its use and to determine its rate, assessment basis, collection and duration. Unlike other mandatory levies, tax can therefore be assessed and collected only in compliance with an act of the legislature, i.e. Parliament. This principle is laid down in Article 34 of the Constitution, establishing the rules in respect of assessment basis, rate and collection modes for any kind of taxes. In other words, intervention by the executive is limited to implementing the tax rules defined in Parliament by specifying, under the control of the tax judge, their implementation methods and terms . Consequently, the tax administration interprets and comments the provisions of the law in regulations, which may neither add nor withdraw anything from the law. Otherwise, the regulation is illegal and is likely to be cancelled by the administrative supreme court upon appeal from the citizens. In such situation, the irregular regulation has no binding character to the taxpayers. Conversely, the administration may not bind a taxpayer who has not applied it. This guarantee also applies when the administration takes definitely a stand on a de facto situation in connection with a fiscal text. Thus, tax law provides that, where a taxpayer uses a fiscal text according to the interpretation released by the administration in its regulations and not revoked at the time of the transactions concerned, the tax administration may not order additional payments by maintaining a different interpretation. Moreover, in accordance with Article 53 of the Constitution, treaties under which State finance is committed or under which laws are modified may only be ratified or approved by law. In this respect, Article 55 of the Constitution provides that duly ratified or approved treaties or agreements prevail over laws once they are published, provided that each agreement or treaty is implemented by the other party. Consequently, domestic tax law applies only subject to the provisions of international treaties or agreements, if any, and such treaties or agreements entitle France to impose taxes not provided for under domestic law. Furthermore, under Article 54 of the Constitution, when the Constitutional Council declares contrary to the Constitution one or more clauses in an international commitment, such international commitment may be authorized only after amendment of the Constitution. * * * The following main French taxes are successively presented: - Income taxes ; - Consumption taxes ; - Property taxes (impôts sur le patrimoine) ; - Local taxes. It describes only rules provided for by French domestic laws. A more thorough information is available on the Internet service center of the Ministry of Finance, Economic Affairs and Industry (http : //www.finances.gouv.fr) which has been standard up in particular to allow non-residents to obtain information relating to them. The administrative doctrine laid down in the official tax bulletins may be obtained from the company Roto Presse Numéris, 20, rue de la Victoire, Z.I. La Molette, 93150 Le Blanc-Mesnil. This doctrine is regularly integrated in the basic administrative documentation, circulated by Imprimerie nationale at the two following addresses : 2, rue Paul-Hervieu 75015 Paris or BP 514, 59505 Douai Cedex. Bilateral tax treaties on avoidance of double taxation between France and other States may depart from these rules which may therefore be implemented only subject to such conventions. A list of tax treaties is appended. The text of such treaties may be obtained from Direction des Journaux Officiels, 26 rue Desaix, 75727 Paris Cedex 15, France, or ordered through the French Minitel videotex system (3615 code JOEL) or else consulted on the Internet service center of the Ministry : (http://www.finances.gouv.fr).
PART ONE France has four categories of income tax: - Corporation tax; - Income tax for individuals; - Social levies which apply to individuals' income; - Payroll taxes. CHAPTER 1 Corporation tax is normally an annual tax on the total profits made by companies and other legal entities. It concerns about one-third of French enterprises. Its standard rate is 33 1/3 %, but it is lowered to 19 % for long-term capital gains put into reserves and for part of the accounting profit, at most equal to 25 % of such accounting profit up to a FF 200 000 limit, which small and medium-sized enterprises integrate in their capital. It amounts to 24 % or 10 % on property income of non-profit organizations. The finance amendment act for 1995, passed on 4th August 1995, subjects, starting from 1st January 1995, legal entities to a surcharge corresponding to 10 % of the corporation tax assessed on their taxable profits. Moreover, the law of 10 November 1997 involving urgent tax and financial matters burdens legal entities liable to corporation tax with a temporary surcharge assessed on corporation tax computed on their taxable profits at the standard rate (33 1/3 %) or at the reduced rate on the long term capital gains (19 %). The rate of the temporary surcharge is standard at 15 % for the accounting periods or tax years ending between 1 January 1997 and 31 December 1998 and at 10 % for the accounting periods or tax years between 1 January and 31 December 1999. This temporary surcharge does not apply to enterprises liable to corporation tax the turnover of which is less than FF 50 000 000 and the fully paid-up capital of which is continuously held for at least 75 % by individuals, or by companies meeting the same conditions the capital of which is held for at least 75 % by individuals. Then, the effective corporation tax rate in 1998 is 41.66 % for large enterprises and 23.75 % for long term capital gains (1). The effective rate applying to small and medium-sized enterprises held by individuals is 36.66 % and 20.90 % for the maximum FF 200 000 of retained profits. The revenues from corporation tax expected for 1998 amount to FF 188.2 billion. I - SCOPE OF CORPORATION TAX A/ TAXABLE PERSONS Certain legal entities are compulsorily subject to corporation tax by virtue of their legal form. Thus, regardless of their purpose, the sociétés anonymes or SA (public limited companies), sociétés à responsabilité limitée or SARL (limited liability companies), sociétés en commandite par actions (limited partnerships with share capital) and, in certain cases, co-operatives are subject to corporation tax. Corporation tax also applies to other legal entities according to the nature of their business. Such is the case with, first, the sociétés civiles (civil law or non-trading companies) engaging in industrial or commercial activities and, second, other legal entities engaged in for-profit operations. Moreover, sociétés de personnes (partnerships), whose profits are normally included in the income of the partners in respect of their shares in the profits, may in certain cases elect liability to corporation tax. Lastly, local government authorities or private non-profit entities are subject to corporation tax, according to special rules, on income from their property or assets (real property income, agricultural profits, certain types of income from securities). In this case, a corporation tax rate of 24 % is applied, or a 10 % rate on certain types of income from securities such as income from bonds. In this case, the 10 % and 15 % temporary contributions shall not apply. The State, local authorities and public administrative establishments are exempt from corporation tax. Moreover, no corporation tax is levied on dividends received by parent companies from their subsidiaries. Lastly, new enterprises and enterprises establishing themselves in areas which are geographically limited and economically declining and whose growth must be encouraged through tax incentives (Corsica, the "enterprise zones" near Dunkerque, Toulon-La Seyne and Aubagne-La Ciotat and in the urban free zones), are temporarily tax exempt under certain conditions. B/ RULES OF TERRITORIALITY Unlike all other countries of the European Union which apply worldwide taxation to profits, France assesses corporation tax only on profits made by enterprises operated in France, regardless of their citizenship. Consequently, profits made by enterprises operated abroad are not subject to corporation tax, while foreign companies pay corporation tax on the profits made by enterprises they operate in France. Accordingly, companies taxable in France cannot report losses incurred by enterprises operated abroad. The term "enterprise operated in France" means which regularly carries on business in France, whether as part of an autonomous establishment or, in the absence of an establishment, through representatives without independent professional status, or as part of transactions forming a complete commercial cycle. By exception to the rule of territoriality, French companies may use the earnings from all their direct operations for the French assessment basis (worldwide profit taxation). They may also elect the consolidated profit system which enables them to take into account their share in the earnings of their French or foreign subsidiaries endowed with independent legal status when they own at least half the voting rights thereof. These two exceptional arrangements apply to companies who have requested beforehand such arrangements and have been authorized by ministerial decision (approval). Moreover, an optional integration regime allows a French parent company to integrate in its taxable profits or losses the profits or losses of its French subsidiaries of which it holds at least 95 % of the capital. II - DETERMINATION OF TAXABLE PROFIT A/ GENERAL RULES OF PROFIT DETERMINATION Companies subject to corporation tax must base their taxable profit on all receivables and debts existing at the end of an accounting period. This is the case for enterprises subject to income tax in the category of business profits (bénéfices industriels et commerciaux). Non-commercial enterprises subject to income tax in the category of professional profits (bénéfices non commerciaux) do not normally follow this rule. Profits subject to corporation tax are determined according to the same general rules as those of enterprises subject to income tax in the category of business profits, except for the territorial profit taxation rule which only applies to enterprises subject to corporation tax. Profits subject to corporation tax are determined by the earnings from transactions of any kind made by the enterprise, including in particular transfers of assets (cessions d'éléments d'actifs). Thus, the assessment basis consists of the difference between the closing balance and the opening balance. Normally, the taxable profits correspond to the accounting result. However, it may be adjusted as necessary to take into consideration tax rules departing from accounting rules. B/ COMPUTATION OF TAXABLE PROFIT The taxable profit is equal to the difference between the gross operating profit and incidental earnings, on one hand, and deductible costs and expenses, on the other hand. Pursuant to the accounting rules, the gross operating profit consists of the difference between: - Sales and services during the accounting period and the inventory existing at the end of such period; and - The cost price of the sales and services and the inventory at the start of the period. In addition to this gross operating profit, all incidental earnings or profits made by an enterprise shall normally be taxed. This is the case for income from rental of real property, interest on receivables, deposits and guarantees and income from transferable securities. Exceptionally, French parent companies may exclude from their taxable earnings dividends distributed by their French or foreign subsidiaries in which they hold at least 10 % of the share capital . Costs and expenses may be deducted under certain conditions: - They must have been incurred in the direct interest of the business or be connected with the normal management of the enterprise; - They must correspond to an actual expense and sufficiently substantiated; - They must be included in the expenses of the period during which they were incurred and reflect a reduction of the enterprise's net assets; - Their deductibility should not be challenged by a special provision of law. Certain expenses are not deductible when they do not correspond to the purpose of the enterprise, such as expenses connected with hunting or fishing, expenses incurred in order to use yachts, etc. Similarly, long-term capital gains are segregated from the accounting income and taxed separately at the reduced rate of 19 % increased by the surcharges mentioned in page 6, that is to say an effective rate of 23.75 % in 1998. Only capital gains from the alienation of holding interests or parts in venture-capital trusts (fonds communs de placements à risque) or in venture capital companies held for at least 5 years are referred to by this regime. The other capital gains are taxed as ordinary profits at the standard rate of corporation tax (effective rate of 41.66 % in 1998). As to the regime applying to enterprises falling under individual income taxation, long-term capital gains (holding period of at least 2 years) are taxed at the rate of 26 % (16 % + social levies). Short-term capital gains are subject to the progressive rate of individual income taxation (see page 21). The consequence of these restatements may reveal: - either a positive result, i.e. the profit, on which corporation tax is computed; - or a negative result, the loss, which may be standard off against the profits of the five periods following the one in which the loss was incurred or, optionally and under certain conditions, against the profits of the previous three periods (carry-back). III - ASSESSMENT AND PAYMENT OF TAX Companies compute and pay tax spontaneously according to a system of installments, which are regularized when the annual results are finally issued. Dividend tax credit ("avoir fiscal") or other tax credit pertaining to income from securities included in the assessment basis may be standard off against such tax. Income from foreign securities is included in the assessment basis up to its net amount and does not entitle to any tax credit. In France, there is a large mitigation of the cumulative taxation of income from French transferable securities, which would result from the taxation of both the company which pays the dividends and the beneficiary of the dividends. Dividends from French sources received by French companies entitle them, under the same conditions as for individuals, to a dividend tax credit whose amount offstandards the 33 1/3 corporation tax rate but not the surcharges of 10 % and 15 % (see the explanations under "Income tax" below, III-A-6-1-1 p. 18 and 19). However, unlike the rules provided for individuals, excess dividend tax not credited against payable tax cannot be refunded to companies liable to corporation tax. Companies are allowed to distribute dividends deducted from profits not subject to corporation tax (dividends distributed by a French subsidiary controlled for at least 10 %) or subject to corporation tax at a lower rate than the standard rate (e.g. long-term capital gains). In this case, the dividend tax credit which normally accompanies such distributions would not cancel out cumulative taxation of dividends but, on the contrary, would permit accumulation of exemptions. Thus, these distributions result in a prepayment (précompte mobilier) which corresponds to the difference between the tax credit attached to the dividends and the actually paid corporation tax. Moreover, in order to prompt companies not to make their distributions too late, prepayment is payable when the profits in respect of which dividends are paid, were made more than five years ago. Net corporation tax is lessened by the dividend tax credit corresponding to dividends from French source included in the taxable profit. CHAPTER 2 Income tax is normally an overall tax imposed on the entire income of an individual during a given year. Allowing for exceptions, all income is aggregated, regardless of its origin, to determine an overall net income to which a single tax rate applies. This rate has progressive income brackets. However, the computation method of income tax goes together with many provisions allowing for highly personalized taxation. Moreover, certain types of income and capital gains derived from securities are subject to proportional tax levies. Income tax is assessed once a year on the taxable income a household derives during a given calendar year and reports the following year. The revenue expected from income tax for 1998 is FF 296.55 billion. I - TAXABLE INCOME The following eight categories of income are subject to income tax: - Business profits (bénéfices industriels et commerciaux); - Professional profits (bénéfices non commerciaux); - Agricultural profits; - Real property income (revenus fonciers); - Wages and salaries; - Income from transferable securities (revenus mobiliers); - Compensation of certain company managers; - Capital gains. II - SCOPE OF INCOME TAX A/ TAXABLE PERSONS Individuals are taxed on their entire income of French or foreign sources insofar as they are domiciled in France. Persons not domiciled in France are only taxed on income from French sources. 1 - DEFINITION OF DOMICILE FOR TAX PURPOSES - RULE OF TAXATION PER HOUSEHOLD The following persons are deemed to have their domiciles in France for tax purposes: - Any person who has his or her home or main abode in France; or - Any person who carries on a professional activity in France, whether as employee or self-employed, unless he or she proves that this activity is carried on therein incidentally; or - Any person whose has the center of economic interest in France. State employees who perform their duties, or are representatives, in a foreign State and who are not subject therein to a personal tax on their overall income are deemed to have their domicile in France for tax purposes. Tax is assessed at the level of the "tax household", i.e. the family entity consisting of spouses - regardless of their marriage contract - and their children or other dependents. In other words, the assessment basis is generally the total income of the different members of a tax household. 2 - TAX TREATMENT OF PERSONS DOMICILED IN FRANCE Regardless of their citizenship, persons having a domicile in France for tax purposes are taxed on their worldwide income. 3 - TAX TREATMENT OF PERSONS NOT DOMICILED IN FRANCE Regardless of their citizenship, persons not domiciled in France are taxed in France on their income from French sources only. The following categories alone are considered income from French sources: - Income from real property located in France or from rights connected with such property; - Income from French movable property and any other stocks and shares invested in France; - Income from concerns (exploitations) located in France; - Income from professional activities, whether employment or not, carried on in France or from for-profit transactions carried out in France; - Capital gains on the transfer, for financial consideration, of property or rights of any kind and profits derived from transactions, in particular those carried out by real estate brokers when such profits are connected with businesses (fonds de commerce) operated in France as well as real property located in France, real property rights connected therewith or shares in unlisted companies whose assets mainly consist of such property and rights; - Capital gains on the transfer of corporate rights resulting from the transfer of rights pertaining to companies having their head offices in France; - Compensations, including salaries, in consideration of artistic or athletic performances provided in France. The following elements are also considered income from French sources when the debtor of such income has his or her domicile in France for tax purposes or is established therein: - Pensions and annuities; - Fees received by inventors or as copyrights as well as any income derived from patent and similar rights; - Compensations paid in consideration of any services provided or used in France. The income tax paid by persons not domiciled in France is assessed on a standard basis (revenu forfaitaire) equal to three times the rental value of home(s) available to them in France when their income from French sources is less than the standard assessment basis However, the standard basis assessment does not apply, during the year in which the domicile for tax purposes is transferred outside France and the next two years, to French taxpayers who can prove that such transfer is justified by professional requirements and that their domicile for tax purposes was continuously established in France during the four years preceding the year of transfer. Moreover, the standard basis assessment does not apply to: - French or foreign citizens domiciled in a State or territory which has signed a convention with France for the avoidance of double taxation, even if such convention does not contain any provision in this respect; - French citizens, when they can prove that they are subject to personal taxation on their total income in the country or territory where they have their domicile for tax purposes and that the income tax paid in that State is at least equal to two-third of the tax they would have paid in France on the same assessment basis; - Citizens of countries which have signed a reciprocal agreement with France and satisfy the condition laid out in the foregoing subparagraph. Taxpayers domiciled outside of France who receive income from French sources or have one or more homes at their disposal in France, must normally file a tax return. B/ EXEMPT PERSONS Exemptions are based on social grounds. For instance, taxpayers whose income after deduction of professional expenses does not exceed FF 45 400 are exempt from income tax. For taxpayers over 65 years old, the limit is standard at FF 49 500 (these amounts apply to income derived in 1997; they are updated annually). Foreign diplomats and consular officers are exempt from income tax with respect to their official compensation and their income from foreign sources pursuant to the Vienna conventions of 1961 and 1963 on diplomatic and consular relations. III - RULES GOVERNING TAXATION OF INCOME RECEIVED BY INDIVIDUALS A/ PERSONS DOMICILED IN FRANCE 1 - BUSINESS PROFITS The category of business profits includes profits from industrial or commercial activities or handicrafts (artisanat), as well as profits from purely civil activities considered as commercial by law and taxed as such (e.g. profits made by real estate brokers or by lessors of non professional furnished properties). The rules used to determine the assessment basis are normally identical to those applicable to corporation tax. However, the principle of territoriality, as applied to corporation tax, does not apply to profits of enterprises subject to income tax. The taxable profit is based on the accounting profit. Thus, it corresponds to the earnings derived from all transactions carried out by the enterprise, subject to other treatments provided for by tax laws. However, small enterprises are entitled to simplified tax treatment, enabling them to relieve their accounting loads; normally, very small enterprises are taxed on a standard basis (régime forfaitaire) unless they opt for a taxation on the actual assessment basis. 2 - PROFESSIONAL PROFITS In addition to the profits of the professionals and offices whose holders have not the capacity of traders, professional profits include profits from all occupations, for-profit concerns and sources of profits not falling under any other category of income or profit (e.g. regular stock trading, copyrights, fees received by inventors, etc.). Taxpayers subject to actual assessment basis taxation, known as the "déclaration contrôlée" (controlled return), are subject to certain accounting requirements. They have to keep a ledger itemizing their professional receipts and expenses. They need in addition to keep a record of fixed assets and depreciation. This requirement does not apply to persons who are taxed on their professional profits under the standard basis assessment system called "évaluation administrative". In this case, such persons must only keep a daily ledger of operating receipts. Normally, taxable professional profit is equal to the difference between actually collected receipts and the taxpayer's professional expenses (including depreciation), insofar as they have been paid. 3 - AGRICULTURAL PROFITS This category normally includes all farming income earned by farmers, tenants, sharecroppers and landowners. It also includes profits from cattle breeding. The profits of small farms are taxed on a collective standard basis (forfait collectif). 4 - REAL PROPERTY INCOME This category includes income from urban or rural real property, whether improved or not, located in France or abroad. However, this category of income connected with an industrial, commercial, small trading, agricultural or non-commercial activity is included in the profits derived from such activity according to its own rules. Taxable real property income is equal to the difference between amount of receipts and total expenses relating to the property, some of which are mandatorily assessed on a standard basis. Taxpayers with low real property income may elect a simplified taxation treatment . In addition, taxable real property income may be reduced by the depreciation, under certain conditions, of the purchase cost of the new flats for rental purposes. 5 - WAGES, SALARIES AND PENSIONS This category includes, on one hand, wages, allowances and salaries received in consideration of an employment, including the compensation of the managers (Chairmen and Chief Executive Officers and members of board of directors) of sociétés anonymes (SA) and the managing directors with minority shareholding of sociétés à responsibilité limitée (SARL) and, on the other hand, pensions as well as annuities . The assessment basis of such compensation consists of the excess gross income over expenses paid to acquire or keep the income. The assessment basis of pensions consists of the amount of sums received. Pensions and annuities without consideration are granted a 10 % relief applied up to a certain limit. Life annuities with consideration are granted a progressive relief based on the age of the life annuitant at the time the annuity starts.
With some exceptions, gross earned income includes all sums and fringe benefits available to the taxpayer. Expenses incurred to acquire the earned income are normally taken into account on a standard basis (a 10 % deduction and possibly a further lump sum deduction). However, taxpayers may opt for deduction of their actual professional expenses. Moreover, a relief of 20 % is applied to all earned income, salaries and pensions, but it is abolished beyond a certain limit. 6 - INCOME FROM TRANSFERABLE SECURITIES This category covers the proceeds from both variable-interest securities and fixed-interest securities. It includes in particular, on one hand, income from shares and similar income and, on the other hand income from bonds and other corporate bonds, income from debt-claims, deposits, guarantees, current accounts, Treasury bonds, loan notes, as well as capital gains on the transfer of such securities. However, this category does not include income or capital gains, which are part of the income of an industrial, commercial, small trading, agricultural or non-commercial enterprise. The costs and expenses pertaining to income from transferable securities, except those related to income from debt-claims, are deductible at their actual amount insofar as they are incurred to acquire or keep taxable income. On the other hand, expenses which have the nature of capital expenditure or use of income, are definitely not deductible. For example, interest on loans contracted to acquire transferable securities may not be deducted from income derived from such securities. For the record, individuals domiciled in France are normally taxed on income from transferable securities of French and foreign sources, unlike persons whose domicile for tax purposes is not located in France who are taxed only on income from French sources. 6-1) Income from French transferable securities 6-1-1) Proceeds from variable - interest securities This income is normally included in the income tax assessment basis and therefore subject to a progressive tax rate. In order to avoid economic double taxation, dividends paid by French companies entitle their beneficiaries residents of France to a dividend tax credit equal to half the net dividends received. In practice, the taxpayer is taxed on the received dividend to which a dividend tax credit is added. The dividend tax credit is deducted from the tax calculated on this income. Thus, the corporation tax paid by the enterprise (free of the 10 % and 15 % surcharges) with respect to the distributed dividend is "refunded" to the beneficial shareholder. This dividend tax credit takes the form of a certificate. Where the amount of the dividend tax credit is higher than the income tax charged to the taxpayer, the Treasury refunds the difference to the taxpayer. 6-1-2) Proceeds from fixed - interest securities This income is normally included in the income tax assessment basis and therefore subject to a progressive tax rate. However, certain types of income are expressly exempt, in particular for social reasons (e.g. capitalized interest on popular savings plans or interest on popular savings books). Moreover, income from fixed-interest securities is not subject to progressive taxation insofar as it is liable to a proportional standard levy discharging income tax liability, whether mandatorily (e.g. Treasury bonds and proceeds received by non-residents) or optionally (e.g. interest from bonds and bank promissory notes). The levy is automatically or optionally applied by the paying establishment when they are received. Rates vary according to the type of investment, but in general it is equal to 15 % levy (not including social levies). 6-2) Income from foreign transferable securities Income from transferable securities issued outside France and similar income are normally subject to income tax when received by individuals domiciled in France for tax purposes. Such income from foreign sources is included at net value in the assessment basis, i.e. after deduction of tax borne abroad, and do not entitle their holder to a tax credit. 7 - COMPENSATION PAID TO CERTAIN COMPANY MANAGERS The tax treatment of compensation paid to company managers mainly depends on the legal and tax status of the company who pay them. For example, compensation paid to managers of companies limited by shares (sociétés anonymes) and to managers with minority shareholding of limited liability companies (sociétés à responsabilité limitée), is taxed as wages and salaries. On the other hand, compensation to managers of sociétés à responsabilité limitée who are majority shareholders and to partners in partnerships having opted for corporation tax liability is taxable as a specific category. The assessment basis consists of excess compensation granted over evidenced actual expenses. However, starting from the taxation of the 1996 income, their tax treatment is in line with the tax treatment of employed managers. 8 - CAPITAL GAINS Capital gains may be derived by individuals through management of their private assets or may be related to a business activity. 8-1) Treatment of capital gains derived by individuals Taxation of capital gains derived by individuals applies in particular to capital gains from real property, as well as capital gains from the alienation of transferable securities or corporate rights, for valuable consideration. Capital gains derived from transfer of a property without financial consideration are not taxed as such. However, they are included in the assessment basis for capital transfer duty (see property tax). 8-1-1) Capital gains from real property This tax applies to capital gains derived from the transfer of real property, rights related to real property and corporate rights of unlisted companies whose assets substantially consist of real property. Capital gains are called short-term when made less than two years after purchase (whether for financial consideration or not) of real property. In all other cases, they are called long-term. The assessment basis is equal to the difference between the price of transfer and the acquisition price (or, in case of acquisition for free, the value of the property at that date). However, methods for computing long-term capital gains allow for a significant limitation of the assessment basis. Currency erosion correctives are applied to the purchase price or to market value on acquisition, as the case may be. Moreover, long-term capital gains qualify for a standard relief of 5 % for every year the property is held after the second year, which means that they are tax exempt when sold after having been held for at least 22 years. When taxable, capital gains are normally included in the assessment basis of the income tax payable for to the year of transfer of real property. Besides, long-term capital gains are taxed according to a "five-year quotient system", whose application significantly limits the impact of tax progressiveness. Moreover, certain capital gains are expressly exempt, such as those derived (on certain conditions) from the sale of the taxpayer's main home (résidence principale) or the first sale of a housing building (immeuble destiné à l'habitation).
8-1-2) Capital gains from transferable securities or corporate rights Capital gains derived by persons domiciled in France for tax purposes, are taxed at a proportional rate when the annual amount of transfer exceeds a certain limit (FF 50 000 for transfers carried out in 1998). Capital gains from the transfer of shares in UCITS (investment companies) having opted for the capitalization system are taxable irrespective of the amount of the transfer made during the taxation year. Capital gains are taxed at a proportional rate, irrespective of the amount of the transfer, when derived from substantial interests in the capital of companies liable to corporation tax, i.e. when the rights held, directly or indirectly, in the corporate profits by the transferor or his or her spouse, their ascendants and descendants, jointly exceed 25 % of such profits at any time during the last 5 years. The proportional tax rate applied to the foregoing capital gains is 16 % (19.4 % with the social levies). 8-2) Treatment of professional capital gains Professional capital gains are exceptional profits made when transferring assets by industrial, commercial, small trading, agricultural or non-commercial enterprises. A distinction is made between long-term capital gains (or losses) and short-term capital gains (or losses). Short-term capital gains (or losses) are generally included in the assessment basis applied to taxable profit subject to progressive income tax, whereas long-term capital gains (or losses) are entitled to a lower tax rate of 26 % (including social levies). The distinction between treatment of long-term and short-term capital gains is based on the following rules: - Capital gains (or losses) with respect to non-depreciable assets are deemed short-term when transferred within two years from being allocated to the professional activity. In all other cases, capital gains are considered long-term; - Capital gains (or losses) with respect to the transfer of depreciable assets are normally deemed to be short-term and therefore taxed under general law provisions, regardless of the time during which such assets have been held. However, if the asset has been held for over 2 years, the part of the capital gain which exceeds depreciation is deemed to be long-term and therefore taxed at the reduced rate of 26 %. Finally, it should be noted that capital gains made by small enterprises (as qualified through annual turnover) are tax-exempt where the professional activity has been carried on for over 5 years.
B/ PERSONS NOT DOMICILED IN FRANCE Normally, such persons must report each year their entire income when they receive income from French sources or have one or more homes at their disposal in France. The rules applicable to income received by persons domiciled in France normally apply also to income received by persons not domiciled therein. However, special tax rules have been implemented. Certain types of income from French sources received by persons not domiciled in France are subject to a withholding tax. In certain cases, such withholding taxes may be a levy discharging income tax liability, thus avoiding progressive taxation of the income concerned. Some income is expressly tax-exempt insofar as it is received by non-residents. 1 - INCOME SUBJECT TO WITHHOLDING TAX * Professional profits (bénéfices non commerciaux) Profits derived from non-commercial activities carried on in France by persons not domiciled in France are taxed according to the rules laid down for profits of the same kind received by persons domiciled in France. However, non-commercial or similar income paid to persons (or companies) without a permanent business facility in France is subject to a withholding tax of 33 1/3 %. Generally, this rate also applies to compensation paid for services of any kind actually supplied or used on French territory. However, a 15 % rate is applied to amounts, including wages, paid for artistic or athletic performances in France. In spite of this withholding, the artist or athlete still has to file French income tax return. The withholding on certain types of non-employment income is credited against the income tax (or corporation tax) payable by the beneficiary with respect to income from French sources. The withholding is not refundable. * Wages, salaries, pensions and annuities When paid to persons not domiciled in France, salaries, pensions and annuities are subject to a withholding tax computed as follows : - Annual income under FF 62 330 is not subject to withholding; - Income between FF 62 330 and FF 180 860 is subject to a 15 % withholding tax; - Above FF 180 860 the rate is 25 %. (These amounts, applicable to income received in 1999, are revised each year.) 2 - INCOME FROM FRENCH SOURCE SUBJECT TO LEVIES DISCHARGING INCOME TAX LIABILITY
. Proceeds from variable-interest securities Dividends and similar income distributed by French companies are subject to a 25 % levy discharging income tax liability. . Proceeds from fixed-interest securities Such income is subject most of the time to a 15 % levy discharging income tax liability (the rate varies according to the date of issue of the debt note or the date of payment of income and sometimes of the life of the financial instrument and whether subscription was registered by name or not). But, interest on bonds issued since 1st January 1987 and government bonds issued since 1st October 1984 is exempt from all levies in France. * Capital gains from real property Capital gains derived in France by taxpayers having their tax domicile outside France from the sale of real property, whether improved or not, immovable property rights, stocks or shares in unlisted real estate investment companies having substantially real property assets, are subject to a 33 1/3 % levy discharging income tax liability. This rule also applies to legal entities or organizations, regardless of their form, having their head office outside France. * Profits from real property Certain profits from real property made by individuals domiciled outside France are subject to a 50 % levy discharging income tax liability. These are: - profits made by real estate brokers; - profits made by persons on transfer of real property they have built or have them built and of the real property rights pertaining thereto; - profits made by persons who sell land divided in plots intended to be developed. * Capital gains from transfer of corporate rights derived from substantial interests Like persons domiciled in France for tax purposes, individuals not domiciled in France and legal entities having their head office outside of France are taxed in respect of capital gains on all or part of corporate rights held in companies liable to corporation tax if such rights have represented over 25 % of corporate profits at any time during the last five years. The 16 % levy fully discharges income tax payable by persons not domiciled in France with respect to such capital gains. * Wages, salaries, pensions, annuities Such income is subject to a withholding tax when received by persons not domiciled in France. Such withholding is normally set off against final tax chargeable. Nevertheless, withholding on wages, salaries, pensions and life annuities discharges income tax liability for the taxable fraction (taxed at 15 %) which does not exceed FF 180 860 (for 1999). However, this measure is specific for French citizens who do not have their domicile in France for tax purposes, as well as citizens of countries having signed with France a convention including a non-discrimination clause. This fraction is not taken into account for the computation of income tax and the corresponding withholding cannot be set off. However, the foregoing provisions do not free the taxpayer to file a return: all salaries, pensions or annuities from French sources available to him during the year of taxation, as well as the total amount of the withholding tax on such income, must be reported on the annual tax return. 3 - TAX-EXEMPTION OF CERTAIN CATEGORIES OF INCOME FROM FRENCH SOURCES RECEIVED BY PERSONS NOT DOMICILED IN FRANCE Net capital gains derived from transferable securities, whether directly or through a third person, by persons not domiciled in France for tax purposes are exempt from income tax if not derived from substantial interests (see 2. above). This rule, which does not apply to persons domiciled in France, also applies to legal entities having their head office outside France. Moreover, interest from deposits, whether in foreign currencies or French francs, made by non-residents in banks established in France as well as on interest from certain bonds subscribed by non residents are exempt (see 2. above). IV - DETERMINATION OF OVERALL INCOME Normally, taxable income is obtained by adding all the different categories of net income available to a tax household during the year of taxation. * * The taxable income is an overall income This means that it includes all net income received by the members of a tax household in respect of one or more income categories. Losses in certain income categories are normally set off against other types of income and the overall loss, if any, may be carried forward to the overall income of the next 5 years. There are some exceptions to this principle. For example, agricultural losses cannot be so set off when other income exceeds FF 200 000. Real property losses cannot be set off against overall income except for the fraction resulting from expenses other than loan interest and up to a limit of FF 70 000 or FF 100 000, as the case may be. However, the following types of losses may be set off without limitation against income : real property losses caused by major repairs made by certain bare owners (nu-propriétaires), losses incurred in respect of historic buildings and losses resulting from certain expenses incurred as part of property restoration operations carried on in protected sectors as well as losses related to rehabilitation of buildings located in urban free zones. Similarly, losses from the carrying on of non-professional activities treated as business profits for tax purposes shall not be set off against the overall net income but against the profits alone from activities of the same kind carried on under the same conditions, and made during the five following years. Under the same conditions as taxpayers domiciled in France, taxpayers not domiciled in France may set off losses of the same origin against profits or income from French sources, provided that such losses are from French sources. This possibility is not available to taxpayers domiciled outside France (but not in a country with which France has signed a treaty to avoid double taxation), whose taxable income is inclusively based on 3 times the actual rental value of their home(s) in France. The taxable income is an available annual income A tax household is normally taxed on income derived, and made available, during the year (or during the accounting period if derived from a non-employment professional activity). However, exceptional or deferred income may under certain conditions be taxed according to the income splitting system ("quotient"), thus cushioning the impact of progressive taxation. The taxable income is a net income For economic or social reasons, certain personal expenses of the tax household are treated for tax purposes either as expenses which may be deducted from overall income or as tax reductions in the form of a percentage of an upper limit of the expenditure. Among expenses taken into account at the overall income level, alimonies-under a court decision or as a mandatory alimony-may be deducted (normally the actual amount). Other expenses, exhaustively listed, may be deducted up to an amount most often capped. Moreover, no expenses relating to overall income are deducted from the taxable income of taxpayers not domiciled in France. Furthermore, such taxpayers are not normally entitled to tax reductions which may be granted to taxpayers domiciled in France. V - COMPUTATION OF TAX The authorities compute income tax on the basis of the amounts declared by the taxpayer who must file a tax return reporting his total income received the previous year by the tax household. Moreover, beneficiaries of income derived from professional activities (business profits, professional profits, agricultural profits), income from transferable securities and income from real property, and persons having derived capital gains from real property, must append special returns to the overall return. Although the rate (*) was simplified recently, computation of income tax remains relatively complex given the methods implemented to take into account the taxpayer's personal situation. Such personalization of tax is particularly expressed in the use of the "quotient familial" technique (income splitting system) on one hand and in the attribution of tax reductions to taxpayers in respect of some of their personal expenses on the other hand. Income splitting system (technique du quotient familial) It is used to take into consideration the dependents and to lessen the impact of tax progressiveness accordingly by applying the progressive rate to partial income: taxable income per part. The method consists in dividing the taxable income of the tax household in a number of equal parts (e.g. one part for a single person, two parts for a married couple, an additional half part for each of the first two dependent children and an additional part for each dependent child thereafter). Next, the progressive tax rate is applied to the taxable income per part (split income) thus obtained. Lastly, this partial tax is multiplied by the number of parts in order to determine the gross tax payable. However, at an equal number of dependents, the tax benefit obtained by application of the income splitting system increases with the amount of taxable income. Accordingly, this benefit is capped and the income splitting system no longer applies when the benefit exceeds, for the income received in 1997, FF 16 380 per half share after the first 2 (as in the case of a married couple with two dependent children). Computation of net tax After determining gross tax, any tax reductions and tax credits to which the taxpayer may be entitled are granted, where appropriate. Tax reductions are aimed at certain personal expenses paid by the taxpayer which the law maker wishes to support, particularly for social or economic reasons. The granted reduction corresponds to a given percentage of the expense, up to a limit. The tax benefit from the reduction of tax remains thus independent from the amount of income of the taxpayer concerned. Currently, the General Tax Code lists 14 tax reductions, concerning for instance expenses connected with the main home, donations to charities, the costs of child-care, certain investments in real property for rental purposes, subscription to the capital of unlisted companies, etc. Deductible tax credits correspond particularly to dividend tax credits (avoirs fiscaux) pertaining to dividends distributed by French companies. They may also concern withholding taxes on income from movable property from countries having signed a tax treaty with France which provides under certain conditions and within certain limits for the crediting of tax paid abroad in respect of such income. Several months after the taxpayer has filed his return, a bill of net tax in the form of a tax notice (avis d'imposition) is sent to his domicile, indicating also the date of collection proceedings (date de mise en recouvrement). Normally, tax is paid in the form of two installments followed by payment of the balance. Taxpayers may opt for monthly payment of tax. Payment is made in the form of monthly orders (equal to one-tenth of the tax paid the previous year) from January to October, and the balance, if any, is paid during the last month or two. In addition to income tax, income received by persons domiciled in France is subject to the complementary levies enacted in the last several years in order to complement the financing of the social security system. CHAPTER 3 Since its inception in 1945, the social security system has been financed mostly from contributions levied on earned income. So far, France has differed from some of its European partners which fund social expenditure by taxation. However, in order to remedy the problem of financing social security, the authorities were induced to enlarge the spectrum of traditional ways (e.g. higher social security contributions) by enacting supplementary levies in the form of taxes, of which the contribution sociale généralisée (CSG, widespread social security contribution) is the best example. Similarly, ordinance of 24 January 1996 on the reimbursement of social debt introduced a contribution for the reimbursement of the debt of the social security debt. This tax which is of the same nature as the CSG but applied to a broader basis, will be paid until 31 January 2014 at a 0.5 % rate. I - WIDESPREAD SOCIAL SECURITY CONTRIBUTION (CSG) Introduced by the finance act for 1991, this levy applies only to individuals domiciled in France. Initially set at 1.1 %, the rate of this tax levy was raised to 2.4 % on 1 July 1993. Starting from 1 January 1997, the rate of the CSG was raised to 3.4 %, the additional point being deductible from the income tax assessment basis relating to income subject to the progressive rate. In order to insure a fair contribution of all income to the financing of the welfare and to strike a balance between the taxation of investment income and the taxation of earned income, the rate of the CSG was globally raised by 4.1 points, starting from 1 January 1998. Just like the increase of the CSG rate introduced on 1 January 1997, the last increase is deductible from the income tax assessment basis for income subject to the progressive rate. The CSG is levied on a broad assessment basis, as it is normally levied on earned income and substitute income, property income and proceeds from fixed-interest securities subject to a levy discharging income tax liability. The CSG consists actually of three separate contributions (separate assessment bases and collection procedures). * CSG on earning income and substitute income As regards employment income and similar income, the assessment basis consists of gross wages and fringe benefits in cash or in kind granted to the person. This assessment basis is lowered by 5% for professional expenses. In this case, the CSG is levied at source at a 7.5 % rate. It is deducted by the employer, who pays it back to organizations responsible for collecting social security contributions. Substitute income (pensions, unemployment benefits, health and maternity allowances, industrial injury benefits) is normally subject to the CSG. The taxation rate is 6.2 % in general. However, recipients of substitute income are exempt from the CSG when income does not exceed certain amounts which entitle to exemption from local taxes. Those who do not satisfy such condition and whose annual amount of income taxes does not exceed FF 400 are liable to a CSG reduced rate of 3.8 %. As to substitute income, unlike earned income, the increase of the CSG applied since 1 January 1998 is limited to 2.8 points with, as a corollary, a decrease of 2.8 points of the health insurance contribution. * CSG on property income This 7.5 % contribution is assessed on the net amount of the following types of income : - real property income; - life annuities for valuable consideration; - income from transferable securities other than that subject to a levy discharging income tax liability; - capital gains from the transfer of real property and of shares in unlisted companies whose assets are substantially real property; - capital gains and profits subject to income tax at a proportional rate; - income from rental of furnished premises derived from a non-professional activity; - any other income not expressly named; - and lastly, any other income the taxation of which is attributed to France by an international convention. CSG levied on such income is collected by individual assessment and is assessed and audited according to the same rules as income tax. * CSG on fixed-interest securities subject to a levy discharging income tax liability Like the foregoing income, income from fixed-interest securities is subject to a 7.5 % levy. This levy is withheld, at the same time as the levy discharging income tax liability, by the payer or intermediary who pays the income and who must pay back such amounts to the State. The increase which occured in 1998 is not deductible concerning income and capital gains taxed at a proportional rate or subject to the levy discharging income tax liability. II - CONTRIBUTION FOR THE REIMBURSEMENT OF THE SOCIAL DEBT Ordinance of 24 January 1996 on the reimbursement of the social debt set up a fund aimed at amortizing the social debt, its main sources being the proceeds from several contributions earmarked for the reimbursement of such debt and connected mainly, like the CSG, with earned and substitute income , property income and proceeds from fixed-interest investment income subject to the levy discharging income tax liability. Initially introduced for a period of 13 years starting from 1996, the duration was raised to 18 years by the social security financing act for 1998. Its territorial scope is in line with the scope of the CSG. It is paid by individuals domiciled in France for tax purposes. Its rate is 0.5 %. Its assessment basis is broader than the assessment basis of the CSG. Some items of income exempted from the CSG such as family benefits or housing allowances are subject to the contribution for the reimbursement of the social debt. Its collection methods are identical to those of the CSG, except for the contribution connected with earned and substitute income from foreign sources collected individually like the social debt contribution levied on property income. It is not deductible from the income tax assessment basis. III - 2 % SOCIAL LEVY The social security financing act for 1998 introduced a 2 % levy to which are liable individuals domiciled in France for tax purposes on property income and proceeds from fixed-interest investment income subject to the levy discharging income tax liability. Its assessment basis and collection method are in line with those of the CSG relating to the same income (see I above). It is not deductible from the income tax assessment basis. CHAPTER 4 Payroll taxes include wage tax, apprenticeship tax, employers' contribution to vocational training and construction effort. Within the limited context of this brochure, only wage tax will be examined. While this is not an income tax but a levy on the means of production of enterprises subject to this tax, wage tax is nevertheless tackled within the context of income taxes. The structure of this tax is closer to the structure applying to income taxes than to taxes on consumption or on assets. Wage tax concerns all employers established in France and French Overseas Départements who are not liable to VAT or who were not liable to VAT the previous year on at least 90 % of their turnover. This tax is mainly paid by banks and insurance companies, the medical sector, associations and non-profit organizations. The wage tax is assessed on the gross total amount of paid compensation including fringe benefits. Nevertheless, the assessment basis is lowered for employers who are partly subject to VAT. This reduction takes the form of a percentage applied to the basis, corresponding to the fraction of turnover subject to VAT. Wage tax is an annual tax determined by applying a progressive bracket rate. The rate for compensation received in 1998 is as follows: - 4.25% on the fraction of individual wage below FF 41 230 ; - 8.50% on the fraction of individual wage from FF 41 230 to FF 82 390 ; - 13.6% on the fraction of individual wage above FF 82 390. Employers whose annual tax is less than FF 4 500 are entitled to an exemption (franchise), while employers whose annual tax is between FF 4 500 and FF 9 000 are entitled to a relief (décote). Non-for-profit associations are entitled to an annual relief tax relief equal to FF 28 840 in 1998. This tax is paid spontaneously by liable persons on a monthly or quarterly basis. Moreover, in January of the following year, an annual summary return must be filed to regularize the tax due for payment. Wage tax may be deducted from the assessment basis applying to income tax or corporation tax payable by such employers. The revenue expected from this tax for 1998 is FF 47.3 billion. PART TWO Taxes on expenditure are levied on consumption and investments made by households and enterprises. Traditionally, tax on expenditure corresponds to indirect duties on consumption and transport as well as to customs duties. The introduction of VAT and its widespread use have significantly reduced the scope and therefore the revenue from such indirect duties, even if one of them, domestic tax on mineral oil products, yields significant revenue. CHAPTER 1 In order to create a single market between the Member States of the European Union, the representatives of these States have enacted since 1967 several VAT directives which the Member States must transpose into domestic law. The rules on scope, taxation basis, tax payability, filing requirements are partially harmonized. States may apply transitional provisions with respect of rates, exemptions and deduction entitlement, the rules of which are being harmonized. I - CHARACTERISTICS OF VAT A/ VAT IS A TERRITORIAL TAX VAT is a general consumption tax ,which is charged on all goods delivered and all services provided in France. Foreign trade transactions (exportation of tangible goods and similar deliveries, supply of services linked with international traffic of goods and transactions connected with ships and aircraft, intra-EC deliveries) are generally VAT exempt. However, liable persons who carry out such transactions are entitled to deduct the VAT, which they have borne with respect to the purchase of the goods and services involved in such transactions. Importation and similar transactions as well as intra-EC purchases are normally taxed under the general provisions of domestic law. B/ VAT IS A REAL TAX - Liability to VAT is determined by the type of transactions or products, regardless of the personal situation of the subject person or his customer. Thus, it is levied on deliveries of goods and supply of services: . arising under an economic activity (regardless of the type); . provided for valuable consideration; . carried on by subject persons, i.e. persons independently carrying on transactions falling within the scope of VAT. - There are several exemptions, concerning particularly: . the activities and operations achieved by statutory bodies acting as public authorities, except if their non-subjection distorts competition; . teaching; . medical and paramedical activities and hospitalization costs; . charities. - For certain exempt activities, VAT liability may be elected deliberately (lessors of unfurnished premises for professional purposes, lessors of rural property, certain operations carried on by local authorities, etc.). C/ VAT IS AN INDIRECT TAX PAID IN FRACTIONS VAT is finally borne by the end user, since it is included in the sales price of products or services. Each intermediary (manufacturer, tradesman, etc.) bills its customer for the tax provided for by law and pays it back to its local tax collecting office, less input VAT paid upstream to its own suppliers. In fact, VAT is paid only on "value-added", i.e. the value brought to the product or service in each production or marketing stage, in such a way that the overall tax burden at the end of the economic channel by which goods or services reach the buyer, regardless of the length of the cycle, corresponds to the tax computed on the final sales price to the consumer. D/ VAT IS A PROPORTIONAL TAX VAT is computed by applying a proportional VAT rate to the basis of the transaction without VAT, regardless of its amount. II - ASSESSMENT BASIS Generally, the assessment basis corresponds to the total sums, values, goods or services received or to be received by the seller or service provider from the buyer, the taker or a third party in return for delivered goods or supplied services, including grants linked directly to the price of such transactions. Thus, in addition to the agreed-upon price, the assessment basis includes all taxes, duties and levies of any kind, except VAT itself and all incidental expenses. Such expenses include, inter alia, transport, insurance, packaging, etc. On the other hand, the taxable price does not include price reductions (cash discounts, rebates, returns), nor expenses and taxes advanced by the supplier on behalf and for account of his customer to whom he reports the exact amount disbursed. For deliveries of goods and services, subject persons are exempt from VAT when turnover without VAT during the previous calendar year does not exceed FF 100 000 (or FF 245 000 for certain authors, artistes and lawyers). Such persons are VAT-exempt from the start of their activity subject to VAT. However, they may elect to waive this exemption and opt for payment of VAT instead. Moreover, tax laws provide for standard or actual-basis tax treatment depending on whether or not turnover falls below certain amounts. III - COMPUTATION OF VAT PAYABLE TO THE STATE To determine what he will have to pay, the person deducts from the chargeable VAT on his receipts the VAT paid in respect of the purchase of goods and services used to carry out the transactions subject to VAT. A/ COMPUTATION OF GROSS TAX The amount of gross tax is computed by multiplying the amount of net receipts by the rate applicable to the transaction concerned. - The applicable rates are: . the standard rate of 20.6 %. This rate applies to all transactions not subject expressly to another rate; . the reduced rate of 5.5 % for most food and agricultural products, certain types of animal food, medical drugs not reimbursed by social security, books and certain services (accommodation supply, meals supply to company cafeterias, passenger transportation, certain entertainment); . the special rate of 2.1 % charged in particular on press publications and medical drugs reimbursed by social security. - special rates apply in certain Overseas Départements (Guadeloupe, Martinique, Réunion) and in Corsica. B/ DEDUCTION OF THE VAT TAX PAID BY THE PERSON LIABLE - With some exceptions (e.g. restaurant and accommodation expenses, passenger transportation, etc.), VAT on the cost price of purchases, overheads and investments which is billed to the liable person by his suppliers, is deducted from gross VAT, but only if such acquired goods and services are used to carry out VAT-liable transactions. - The overall amount of VAT to be paid is determined by: . the person liable himself when subject to actual-basis tax treatment; . the authorities when the person liable is subject to standard-basis tax treatment, based on the annual tax return filed by the person liable. - A tax exemption (franchise) or relief (décote) are provided for small enterprises. - If the difference between gross tax and the VAT tax paid to the supplier is negative, the person liable normally sets off the surplus against his future tax payments or may, under certain conditions, request its refund. IV - OBLIGATIONS OF PERSONS LIABLE TO VAT VAT is subject to the following requirements : . reporting the existence of a business or its identification or discontinuance ; . detailed book-keeping, supported by any evidence or a special ledger ; . invoices bearing the VAT-free price, the VAT rate and the amount of VAT ; . filing turnover returns on a monthly or quarterly basis, depending on the amount of tax payable annually ; . filing goods movements for certain intra-EC transactions for statistical and tax purposes ; . spontaneous payment to the tax collecting office along with the return or, in the case of persons liable who are subject to standard taxation, according to a predetermined schedule. Requirements are fewer for small enterprises. ** The revenue expected from VAT in 1998 is FF 777.48 billion (FF 636.24 billion for the net amount).
CHAPTER 2 INDIRECT TAXES The European directive of 25 February 1992 and the three directives of 19 October 1992 have partly harmonized indirect taxes at Community level (excise). This harmonization concerns mineral oils, alcoholic produces and tobacco products. The new system was introduced into French law on 1st January 1993. Other products remain subject to national rules. I - TAXATION OF SPIRITS AND ALCOHOLIC BEVERAGES A/ TAX TREATMENT OF SPIRITS AND ALCOHOLIC BEVERAGES Produces liable to indirect duties on alcohol are subject to a consumption tax (in particular brandies and liqueurs, aperitifs, unnatural wines and, more generally, all alcohol-based preparations). Normally, taxation of beverages made of distilled alcohol are based on tariffs per hectoliter of pure alcohol and beverages made of distilled and fermented alcohol (intermediate products) are taxed according to the volume of finished produce. B/ WINES AND CIDERS The same tax treatment applies to wine, cider, perry and mead. They are subject to a transport duty applied to the volume of taxable produces. C/ COMMON PROVISIONS Transport and consumption duties are computed when the produces are marketed. Moreover, any person trading in alcoholic beverages, alcohol-based products and such beverages as wines and ciders is subject to special economic rules. II - DOMESTIC TAX ON MINERAL OIL PRODUCTS Mineral oil products are subject to specific taxes computed on volumes or bulks (e.g. in francs per hectoliter), the main one being the domestic tax on mineral oil products (taxe intérieure sur les produits pétroliers, TIPP). TIPP is a special indirect tax on specific oil products. Therefore, it has the characteristics of an indirect tax. TIPP is expected to raise FF 154.89 billion in 1998. TIPP is determined according to the physical characteristics of taxed mineral oil products, and computed according to customs tariffs. It is collected by the direction générale des douanes et des droits indirects (DGDDI, general direction of customs and indirect duties ) on mineral oil products retailed on the domestic market. For information, TIPP tariffs amount in 1998 to : - FF 411.51 per hectoliter of leaded four star / premium petrol (super plombé) ; - FF 384.23 per hectoliter of unleaded four star / premium petrol (sans plomb); - FF 240.79 per hectoliter of diesel oil. III - TAX TREATMENT OF TOBACCOS Tobaccos are subject to a duty when marketed. The revenue should amount to FF 41 billion in 1998. IV - ENTERTAINMENT TAX Collected for appropriation to the communes, entertainment tax is levied on turnover made during sports meetings, in gambling clubs and houses and by slot machines in public premises. However, some sporting events are exempt from entertainment tax. V - DUTY ON PRECIOUS METALS The State guarantees the purity of gold, silver and platinum materials by stamping them in consideration of a specific duty. The rate varies according to the nature and content of the precious metal used. The chargeable event is the marketing of the products concerned. The revenue from such duty should amount to FF 165 million in 1998. PART THREE Property may be taxed when alienated, whether for valuable consideration (transfer) or not (gift, inheritance). In these cases, tax takes most often the form of registration duty. Moreover, property may be taxed because of the fact that it is held. In this case, such property is subject to an annual tax assessed on its total value represented by wealth tax (impôt de solidarité sur la fortune, ISF) and real property tax with respect only to the building element. This last mentioned tax is examined in the chapter entitled "local taxes". Lastly, capital gains derived from the transfer of property may be taxed. The tax treatment applicable to capital gains is dealt with in the first part of this brochure ("Income tax"). CHAPTER 1 I - REGISTRATION FORMALITY Traditionally, the registration formality consists in the analysis of a deed by a civil servant who assesses and collects the duties provided for by law. Accordingly, registration has a tax purpose mainly, but formality also has civil consequences : it gives the deed a legal date ; in certain cases, it determines the validity of legal deeds. For real property transfers, it allows the updating of real estate records. Normally, the presentation of deeds to the formality is accompanied by the payment of duties. However, in certain cases, payment may be made in installments or deferred. Lastly, duties on transfers without consideration (duties to be paid when gift deeds or returns of deceased persons' estates are filed) may be paid in the form of art works handed over to the State, subject to ministerial approval. Such tax is normally collected for appropriation to the State. However, duty on sales of real property is collected for appropriation towns, départements and regions. The assessment basis normally consists of the market value of the property at the date of the deed or transfer, as mentioned in the deed or in the estimated return filed by the parties, and then audited by the authorities. The market value of a property corresponds to its sales value, i.e. the price at which this property may be sold or bought on market conditions. Registration duties are fixed, proportional or progressive, depending on the type of deed or legal transaction subject to the formality. - Fixed duties are constant when applied to deeds classified in a given category or not liable to proportional or progressive duties. There are several fixed duties: duties on the decisions of criminal courts (from FF 150 to FF 2 500), and duties on private or commercial deeds (three fixed duties from FF 100 to FF 1.500 per deed, including a duty of FF 500 for unnamed deeds and deeds not specifically exempt or having no fixed rates).
Revenue from registration duties should amount to FF 78.75 billion in 1998, including over FF 35.2 billion from duties on transfers without valuable consideration (inheritance and gift duties). II - MAIN REGISTRATION DUTIES A/ SALES OF REAL PROPERTY Duties on sales of real property are collected when the property is transferred. In addition to tax on the registration of real property transactions, such transfer gives rise to additional local taxes. - Initially collected for appropriation to the State, tax on the registration of real property transactions has become a département resource for all real property transactions other than exchanges conducted since 1st January 1985. The rate of this tax is 15.40 % in 1998. However, the rate applicable to housing buildings (immeubles bâtis destinés à l'habitation) is lower, varying from 4.20 % to 5 % (depending on the département). Other special rates apply to other real property categories (woods and forests, rural real property, etc.). - Apart from the tax on the registration of real property transactions, there are : . a tax of 1.20 % collected for appropriation to the commune or to a département equalization fund ; . a tax collected for appropriation to the region (1.60 % for all regions as on 1 January 1998). - Another levy of 2.50 % collected for appropriation to the State, assessed on the amount of the département duty in respect of "assessment and collection costs". In each département, the tax rate on registration of real property transactions may be modified within certain limits by the Conseil Général. Acquisitions made by the State or its scientific, educational, assistance and charity establishments or by local authorities are exempt from any transfer duty. B/ TRANSFERS OF BUSINESSES (cessions de fonds de commerce) Transfers of businesses are taxed according to a progressive bracket rate. The corresponding duties are mainly collected for appropriation to the State. However, additional département and commune taxes are also collected. The following rates apply: transfers are exempt for the fraction of the sales price which does not exceed FF 150 000. The rate is 7 % (6 % State duty + 0.6 % département tax + 0.4 % commune tax) for the fraction of the sales price which ranges from FF 150.000 to FF 700 000. The rate is 11.4 % (9 % + 1.4 % + 1 %) for the fraction of the sales price which exceeds FF 700 000. Under certain conditions, the 6 % State duty may be removed for the fraction of the taxable value between FF 150 000 and FF 700 000 of the acquisition of businesses in communes with fewer than 5,000 inhabitants each, located in priority development rural territories and urban revival zones or urban free zones defined within the regional and national development policy. B-1/ TRANSFERS OF POSSESSION ON IMMOVABLE PROPERTY, BUSINESSES AND GOODWILL They are subject to the lease duty at the rate of 2.5 % assessed on the stated price plus the expenses imposed on the buyer or on the actual rental value of the property rented if higher. Transfers of possession subject to VAT and those for which the annual rent does not exceed FF 12 000, are in particular exempt from the lease duty. Where the transfer involves a building finished for more than 15 years, an additional tax of 2.5 % is chargeable. It is assessed and collected under the same conditions as the lease duty itself. Leases - limited in time - of buildings concluded for more than 12 years are subject to a tax on the registration of real property transactions. B-2/ TRANSFERS OF CORPORATE RIGHTS Transfers of corporate rights give rise to the following registration duties: - 1 % limited to FF 20 000 for the deeds involving transfers of shares, founding shares or rights to participating in profits and rights in capital subscribed by customers of mutual and cooperative banking establishments ; - 4.8 % for the transfer of rights in unlisted companies other than mentioned above. C/ REGISTRATION DUTIES CHARGEABLE TO COMPANIES Companies are subject to registration duties at different rates on incorporation, during their existence, and on dissolution. Incorporation Mere contributions (apports purs et simples), i.e. contributions granting the contributor, in exchange for his outlay, corporate rights running all corporate risks, give normally rise to a fixed duty of FF 1 500. However, when contributions consist of businesses "fonds de commerce", lease rights, goodwill (clientèles) or real property and are made to a legal entity subject to corporation tax by persons not subject to this tax, a 8.60 % proportional duty for appropriation to the State increased by département and commune and sometimes regional taxes is payable (e.g. a 13 % charge for real property). However the FF 1 500 duty may be applied where the contributor undertakes to keep for more than 5 years the rights received in return for his contribution. Contributions for valuable consideration (i.e. a real sale by the contributor to the company) are treated as transfers for valuable consideration, according to the nature of assets concerned (buildings, businesses, etc). However, in case of contribution in a company, by an individual, of all the fixed assets allocated to the performance of a business activity, the rate of the duty resulting from the takeover by the company of the liabilities is reduced generally to 8.6 % plus additional taxes. Existence Capital increases by means of new "mere contributions" or by incorporation of profits, reserves or allowances (provisions) are subject to a fixed duty of FF 1 500. Capital reductions whereby assets are allocated to partners are normally subject to a 1 % proportional rate of reduction duty (droit de partage). Capital reductions subsequent to losses incurred by the company, without any reimbursement to the partners, are subject to a fixed duty of FF 500. During mergers, "mere contributions" are subject to a fixed duty of FF 1 500, while contributions for valuable consideration other than those resulting from takeover of liabilities are dutiable to ordinary transfer duties according to the type of the property contribution. Corporation splits-up are treated for tax purposes as mergers. Dissolution Deeds providing for dissolution are subject to a fixed duty of FF 1 500 if they establish no transfer of assets between partners or other persons. The transfer of corporate assets to third parties is liable to the sales duty corresponding to the type of asset. Transfers to partners and sharing between partners follow complex rules and may give rise to additional duties in case of sale. D/ INHERITANCE AND GIFT DUTIES Transfers without valuable consideration include, on one hand, transfers following death, i.e. inheritances, and, on the other hand, transfers without return inter vivos, i.e. gifts. With regard to inheritance, it is necessary to make the following distinction to determine the assessment basis (system in force in 1998). -The deceased person had his or her domicile in France for tax purposes. Duties on transfers are payable on all movable and immovable property located in or outside France. - The deceased person did not have his or her domicile in France for tax purposes. Duties on transfers are payable only on movable and immovable property located in France. Moreover, rules for determining the assessment basis differ for certain assets according to whether inheritance or gifts are involved (in particular the standard estimate of movables and valuation of jewelry and art works or collection items). For example, liabilities may not be deducted in respect of gifts. Duties on transfers without valuable consideration are computed according to a progressive or proportional rate, applied to the net amount received by each beneficiary, normally less a basic relief (abattement). The relief varies according to the degree of relationship between the parties to the transfer. In case of transfer between spouses or between direct ascendants and descendants, general relieves (FF 330 000 or FF 300 000 in 1998) or special relieves apply. The progressive or proportional rate does not only vary according to the value of the transferred property but also to the degree of relationship between the deceased person or the donor and the beneficiary on one hand, the beneficiary and the donor on the other hand. There are several rates: * rate applicable to transfers between parents and children: a rate of 5 % on the fraction of the taxable net share below FF 50 000 ; 10 % on the fraction between FF 50 000 and FF 75 000; 15 % on the fraction between FF 75 000 and FF 100 000; 20 % when the fraction ranges from FF 100 000 to FF3 400 000 ; 30 % on the fraction between FF 3 400 000 and FF 5 600 000; 35 % on the fraction between FF 5 600 000 and FF 11 200 000 and 40 % in excess of FF 11 200 000 ; * rate applicable to transfers between spouses: a rate of 5 % on the fraction of the taxable net share below FF 50 000; 10 % on the fraction between FF 50 000 and FF 100 000; 15 % on the fraction from FF 100 000 to FF 200 000 ; 20 % on the fraction from FF 200 000 to FF 3 400 000 ; 30 % on the fraction between FF 3 400 000 and FF 5 600 000; 35 % on the fraction between FF 5 600 000 and FF 11 200 000 and 40 % in excess of FF 11 200 000; * rate applicable to transfers between brothers and sisters: a rate of 35 % on the fraction up to FF 150 000 and 45 % on the fraction exceeding this amount; * rate applicable to transfers between relatives up to the fourth degree inclusive: the rate is 55 %; * rate applicable in all other cases: the rate is 60 %. Mere gifts from parents to their sole child as well as partition-gifts qualify for a 35 % reduction of the duties in 1998 if the donor is less than 75 years old, then, from 1999 on, a 35 % or 25 % reduction according to the donor's age. Mere gifts qualify, irrespective of the relationship between the donor and the beneficiary, for a 25 % reduction in 1998, then from 1999 on, a 25 % or 15 % reduction according to the donor's age. CHAPTER 2 Stamp duties are collected when certain formalities or the drafting of certain documents, etc are carried on. Generally, they are paid by affixing a sticking stamp on the written document. They are also a method of payment for the delivery of certain documents or the performance of certain formalities. The revenue of stamp duties collected for appropriation to the State should amount to FF 13 billion in 1998. The main stamp duties are as follows : I - DIMENSION STAMPS This duty is chargeable on the drafting of deeds listed exhaustively (deeds by law officials, deeds subject to registration, etc.). Its rate varies according to the paper size (from FF 38 to FF 152 per sheet). II - OTHER STAMP DUTIES Stamp duties are also chargeable on receipts for gambling (quittances pour les jeux) such as lotto, tote and one-off lotteries, transport contracts, the issuance of administrative documents (identity cards, passports, car registration books, etc). CHAPTER 3 Wealth tax (impôt de solidarité sur la fortune, ISF) is an annual tax chargeable to individuals with respect to the holding of their property when the net value of their property exceeds a certain amount. I - TAXABLE PERSONS Individuals domiciled in France or who own therein property, and whose property's net value exceeds FF 4 700 000 (the limit applicable in 1998) on 1st January of the year of taxation are subject to wealth tax. Persons domiciled in France are taxable on property owned in and outside France. Persons domiciled outside France within the meaning of French domestic law are only taxed on property owned in France. The tax is assessed by household which consists of spouses or persons living under a common-law marriage and any minors for which they have custody.. II - ASSESSMENT BASIS - The assessment basis includes all property, rights and securities forming the property of taxable persons on 1st January of the year of taxation (developed or undeveloped land (immeubles bâtis ou non bâtis), sole proprietorships, farming businesses, furniture, financial investments, cars, aircraft, yachts, etc.). However, certain assets are fully or partly exempt, i.e. mainly business assets (sole proprietorships effectively managed by the taxpayer and interest equal to, or higher than, 25 % held by the managers, literary and artistic copyrights, certain rural assets, antiques, artworks and collection items. Moreover, the financial investments of persons not domiciled in France for tax purposes are expressly tax exempt. The following categories are not considered as financial investments (and are therefore taxable) :
- As a general rule, taxable assets are valued according to the rules applicable to inheritance (normally, at market value). III - TAX RATE The amount of tax is determined by applying a rate (updated every year) to the assessment basis. On 1st January 1998, this table is as follows : fraction of taxable net value applicable rate Up to FF 4 700 000 0 From FF 4 700 001 to FF 7 640 000 0.5 From FF 7 640 001 to FF 15 160 000 0.7 From FF 15 160 001 to FF 23 540 000 0.9 From FF 23 540 001 to FF 45 580 000 1.2 Over FF 45 580 000 1.5 For taxpayers residents of France for tax purposes, a system of upper limit aims at capping the aggregation of wealth tax and income tax of the previous year to 85 % of the aggregate income. If this percentage is exceeded, the wealth tax is reduced by the excess. This decrease is capped for taxpayers whose wealth exceeds FF 15 100 000 in 1998. The contributions payable since 1 January 1995 are increased by 10 %. Wealth tax is collected in view of a tax return, accompanied by the corresponding payment, submitted to the tax collecting office. Revenue from wealth tax should amount to FF 11 billion in 1998. CHAPTER 4 French and foreign legal entities which, directly or indirectly, own one or more real property assets (immeubles) located in France or hold real rights connected with such property are liable to an annual tax equal to 3 % of the market value of such real property or rights. This tax is due by legal entities, regardless of their form, on real property assets and real rights owned on 1st January of the year of taxation. However, it is not due on property held in inventory by legal entities carrying on business as real estate brokers or developers. Similarly, French law provides that six categories of legal entities and organizations may be exempt from this tax under certain conditions, i.e.: - a legal entity not considered as having assets which consist substantially of real property assets; - a legal entity whose head office is located in a country or territory having signed a tax convention with France which provides for administrative assistance designed to fight against tax evasion and avoidance; - a legal entity whose place of effective management is located in France or which, under a convention, must be treated the same way as a legal entity having its head office in France; - a company listed on the stock exchange; - an international organization, sovereign State or public institution; - a pension fund and other non-profit organization carrying on a no-for-profit activity with a social, philanthropic, educational or cultural purpose. Each year, legal entities liable to the 3 % tax must file a special return before 15th May, recording the location, the representation and the market value of taxable real property and property rights held on 1st January of the year of taxation. The return filed by the legal entity liable to the 3 % tax must be accompanied by the payment of such tax. Moreover, any legal entities interposed between the party or parties liable to this tax and the taxable real property or property rights are jointly liable for its payment. PART FOUR Local direct taxes are the oldest taxes of the French tax system. They succeed the direct taxes created in 1790 and 1791 as State taxes and were transferred to the local authorities during the tax reform of 1914-1917. The characteristic of local taxes is that their assessment basis consists primarily of land registry rental value (valeur locative cadastrale), except for business tax. Land registry rental value does not represent rent derived in ordinary market conditions but the theoretical yield of an estate as determined by the authorities. The State collects local taxes for appropriation to local authorities (regions, départements, communes, groups of communes). Local taxation includes four main taxes (real property tax on developed land, real property tax on undeveloped land, residence tax, business tax). There are also additional or similar taxes. Local tax rates are set by local assemblies (conseil régional, conseil général, town council, etc.) when voting for the annual budget, according to the revenue which the various local authorities expect from taxes collected for their appropriation. However, the tax rates may not exceed certain limits set by the State. Such rates apply to bases determined by the State, too. There are many permanent or temporary exemptions. CHAPTER 1 Real property tax on developed land is levied annually on developed land located in France except where it is entitled to permanent exemption (public estate (propriétés publiques), rural real property for farming, etc.) or temporary exemption (intended to promote construction). Taxable property include all constructions fixed to the ground, designed to last and showing the characteristics of true constructions, such as premises intended to shelter either people (housing buildings, houses) or assets (workshops, sheds), certain structures and certain ways, land immediately and necessarily connected with such constructions, etc. The assessment basis is the land registry income (revenu cadastral), equal to 50 % of the land registry rental value as regularly updated by the authorities. The amount of tax is obtained by multiplying the assessment basis by the tax rate voted for by the relevant local authority for the year concerned. The tax is chargeable to the owner of the property as on 1st January of the year of taxation. Taxable persons of over 75 whose income does not exceed certain amounts, persons entitled to a supplementary allowance from the Fonds Spécial viellesse and Fonds spécial invalidité or an allowance for handicapped adults are exempt from property tax on land and buildings for their main home. Temporary exemptions of varying duration may be granted on new constructions and to start-ups. CHAPTER 2 This tax is levied annually with respect to the holding of any undeveloped land located in France, except for that entitled to permanent exemption (public estate) or temporary exemption (various incentives to promote agriculture or reforestation). As with tax on developed land, the person liable is normally the owner of the property on 1st January of the year of taxation. The assessment basis is the land register income, equal to 80 % of the land register rental value as regularly updated by the authorities. As with other taxes, the amount of real property tax on undeveloped land is obtained by multiplying the land register income from each property by the tax rate voted for by each relevant local authority for the year concerned. CHAPTER 3 Sufficiently furnished housing premises and their outbuildings (gardens, garages, private parking space) are subject to residence tax (i.e. dwelling tax). This tax is chargeable to anyone who, on 1st January of the year of taxation, has available to him or her taxable premises in the commune, irrespective of his or her status (owner, tenant, free occupier). The tax is based on the land register rental value of housing premises determined by surveys of developed land, updated by the authorities. For housing premises used as the taxable persons' main home, this rental value is subject to compulsory relieves for dependants or to optional relieves. The amount of the tax is obtained by multiplying the assessment basis by the rate voted for by each relevant local authority for the year concerned. Modest persons, as defined by law, may qualify for an exemption or an automatic relief, wholly or partly, from residence tax on their main home. CHAPTER 4 BUSINESS TAX Business tax is chargeable annually to individuals or legal entities regularly carrying on business in France as self-employed. Various exemptions are available. Such exemptions may be permanent (activities carried on by the State, local authorities and public establishments, agricultural activities and organizations, private schools, certain small traders, certain industrial, commercial or non-commercial activities, etc.) or temporary (exemptions granted as part of town and country planning or to promote start-ups). The assessment basis of the business tax is equal to the sum of the following two components, determined by reference to the situation in the calendar year before the year preceding the year of taxation. The first component consists of the rental value of tangible fixed assets available for professional requirements to the person liable to business tax. This includes both fixed assets liable to real property tax (whether on developed or undeveloped land) and other fixed assets (machinery, movables, etc.). However, for small entities liable to business tax, the only value used in computing this tax is the rental value of property liable to real property tax. For other persons liable, the rental value of property not liable to real property tax is entitled either to a fixed relief of FF 25 000 or a digressive relief where the taxpayer's annual earnings do not exceed certain limits. The second component consists of a percentage of wages paid by the person liable or of earnings (for most persons liable: 18 % of wages paid; for those who receive professional profits, business agents and trade intermediaries employing fewer than five employees: 10 % of annual earnings). Thus established, the assessment basis is further reduced. Such reductions may be limited to certain persons liable (reductions for hiring labor or for investments, reductions for to enterprises carrying on part of their business outside France) or may apply to all persons liable (general relief of 16 %). In every town where the person liable has premises or land, the tax is assessed with respect to such premises or land. Rates vary within the limits standard by national law according to the decisions of the various local authorities or organizations. The amount of the business tax is obtained by multiplying the assessment basis by the tax rates voted for by each relevant local authority. There are various provisions to reduce taxes charged as from 1991, such as relieves in case of declining business activities or a maximum tax liability representing 3.5 % of value-added generated by the enterprise. Nevertheless, the maximum rate for 1995 to 1998 was raised to 3.8 % for enterprises whose turnover during the taxable year ranges from FF 140 million to FF 500 million and to 4 % for enterprises with higher turnover. CHAPTER 5 I - ADDITIONAL TAXES Communes operating a household refuse collection service may introduce a household refuse collection tax. This tax is assessed on the land register income used as an assessment basis for real property tax on developed land (exempted or not). There are also taxes relating to the charges and costs of chambers of agriculture, chambers of commerce and industry, and guild chambers which are collected for appropriation to these bodies. II - SPECIAL COUNTRY PLANNING TAXES Special country planning taxes are collected for appropriation to a region or town-and-country planning public agency. They are chargeable to all persons subject to local taxes within a given area and computed on the same assessment basis. Embassy of France in the US - October 31, 2001
|
