A range of fiscal measures to stabilize public finances of France


On 24 August, François Fillon announced a range of fiscal measures to stabilize public finances of France. Some of these provisions have now been made official by publication in the Official Gazette of the second supplementary budget in 2011, others should follow. Changing the taxation of real estate gains, rising social security contributions and the tax on mutual health …no taxpayer will be spared by the new tax increases. But specifically for you, it changes what?

After reviewing the bill, introduced by the government, parliamentarians have not brought significant changes. However, some measures have been slightly retouched – the taxation of real estate capital gains – or abandoned – the application of VAT at the standard rate (19.6%) on the theme parks. Other high-profile as the tax on high incomes for their part appear in the draft budget law for 2012 introduced in the fall. All these changes lead to an increase in the tax burden for many taxpayers. Specifically, what are the tax consequences to you of the new rules?

Gains in real estate: big losers of the reform
If you sell land or a house or apartment that is not your principal residence, the imposition of capital gain property released at that time is changed, if not increased. Very controversial, especially by the professionals ‘ estate , the reform of the real estate gains ultimately unsuccessful not the complete removal of the abatement, which currently allows to be exempt from tax when the property sold has been held for over 15 years. Escalation of the reduction is, however, revised and corrected. For bills of sale signed on 1 February 2012, the property sold after 15 years of detention will be exempt only up to 20% against 100% before that date. The full tax exemption on capital gains can only take place after 30 years in prison. However, if you make a contribution of property or rights to SCI family, the new device and specifically applies retroactively from August 25. However, the gain realized on the sale of your principal residence is exempt from taxes . Another measure will also have the effect of increasing your base of taxation . The fixed allowance of 1,000 euros on the applicable capital gains tax is repealed as of September 21. As expected the real estate capital gains not exempt will be taxed at a rate of 32.5% (19% plus 13.5% of samples social) on 1 October 2011, instead of 31.3% due to higher payroll taxes of 1.2%.

Social security contributions further increase of 1.2%!
This increase in payroll taxes from 12.3% to 13.5% is not that real estate gains, but all investment products and wealth. It applies to unearned income received from 1 January 2011 that is to say, property income, life annuities in return for payment, income and capital gains on securities (stocks, bonds, treasury bills … ), the income of the employee savings. However, income investment products will be affected as of 1 October 2011, this is especially the real estate gains, the product subject to the placement of discharge the income tax, goods contracts and funding insurance (life, gains or annuities paid in case of withdrawal of a PEA or PEP and interest and premium paid savings holders of CEL (home savings plan) and PEL (home savings plan).

New tax on luxury hôtels
All these investments have not had the chance to be defended, as were the theme parks, a former prime minister. Indeed, at the insistence Jean-Pierre Raffarin, Nicolas Sarkozy has abandoned the idea of ​​taxing the theme parks of VAT at standard rate. To compensate for the shortfall, a 2% tax is imposed on the provision of accommodation including hotels nightly rate is less than 200 euros.

Further increase in the tax on mutual health
If individuals are not directly liable for the tax, it is likely that the amount is passed on to the end user. Which should also occur for the health insurance contracts caring and responsible as the TSCA owed by insurers will increase from 3.5% to 7%. This increase should result in increased insurance premiums paid by the additional health workers.

Companies also put to use
If individuals are not spared, companies will also get their hands in their pockets. Pell-mell are changed, the mode of application of carry-forward and backward deficits companies subject to the ISF , the regime consolidated worldwide will disappear and the taxation of capital gains on disposals of long-term securities participation increases. Other provisions were announced by the government but will be reviewed as part of the review of the Finance Act 2012 or the law of financing Social Security. These measures include the new movement of the plane 10% of tax loopholes ( Scellier top), lowering the global cap on tax benefits, taxes on soft drinks, tobacco, alcohol and even the new tax on high income.