- Category: Taxes
Tax reforms for French companies
At the end of 2017, several tax reforms were voted in France; and companies can be grateful for quite a few of them.
CICE stands for “Tax credit for Employment and competitiveness”. Basically, this is a tax credit calculated based on a company’s remuneration of its employees, though it doesn’t take into account salaries lower than 2.5 times the minimum wage.
For salaries distributes in 2018, the rate of the CICE goes from 7% of the salaries of your employees to 6%. That is, unless your activity is based on the Overseas French Departments, in which case it remains at 9%.
As for salaries distributed in 2019, instead of the CICE, employers will benefit from a tax credit on their contributions to healthcare. Basically, this reduction will be up to 6% of the salaries lower than 2.5 times the minimum wage.
This stands for “Real Estate Contributions”. What’s new? If your company has a turnover lower than 5000€ (before taxes), you won’t have to pay it at all!
Though, do be careful: the turnover that is used here isn’t the turnover of the current year, but the turnover of two years prior.
Basically, since 2017, the way tax on property is calculated has been a bit different. Instead of using the outdated rules defined in the 1970s, the value of your property will be based on the evolution of rent: this makes for an overall more fair system that’s easier to calculate.
This concerns companies who don’t have to pay the VAT. If this concerns you, however, then you’re in for some good news: the highest tax bracket of 20% has been completely removed. As such, before, you’d have to pay a tax of 20% on the part of your salary that was higher 12 690€. Now though, no part of your salary will be taxed at a rate higher than 13.60%. As such, here are the new taxation rates:
|Tax brackets||Tax rates|
|≤ 7 799 €||4,25 %|
|Between 7 799 € and 15 572 €||8,50 %|
|> 15 572 €||13,60 %|