Bruno Le Maire recently announced a further reduction in production taxes from 2023. CVAE can be terminated permanently.
Reduction in taxes already introduced in the last five year period
During the last five-year tenure, several measures were taken to reduce corporate taxes. Thus the corporate tax rate has been gradually reduced from 33.33 per cent in 2016 to 25 per cent in 2022.
Production taxes have also been reduced as part of the Finance Act for 2021. Wealth tax on commercial property contribution (CFE) and manufactured properties for industrial establishments has thus been halved. In addition, the rate of Business Value Added Contribution (CVAE) has also been halved for all businesses.
For companies whose turnover exceeds €50 million, the maximum CVAE rate, formerly 1.5%, has thus been reduced to 0.75%. Taken together, these measures have reduced production taxes in France by €10 billion.
further decline expected from 2023
Prior to this cut, a study by the Institut Montaigne had projected production taxes at 4.4% of GDP in France in 2020, compared to only 0.7% in Germany and 1.1% in the United Kingdom.
In an interview with Le Figaro published on Tuesday, the Minister of Economy, Finance and Relaunch announced that a new reduction in production taxes would be planned for 2023 as part of the next finance bill, the contents of which disclosed Should be the end of September. Buono Le Maire recalls that this is a campaign promise of Emmanuel Macron.
The renewed minister in his post for this second mandate specified that he would be more amenable to the immediate abolition of CVAE, which would represent a tax reduction of €7 billion for French companies.
Given the budgetary constraints, the government may also opt for gradual elimination.
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