The text notably reduces the taxation of estate owning in favour of a heavier taxation on transfer of property, proceeds with the reform of the Wealth Tax and the removal of the tax shield. As originally planned by the Ministry of Budget, the law should yield nearly 200 million in additional revenue per year.
Furthermore, in order to take into account the situation of taxpayers who own their principal residence for which the property tax on developed property may represent an excessive burden in terms of their ability to pay, Article 31 of the law limits the fee for the main house to 50% of revenues.
Article 6 of the Act increases the rate by 5 percentage points the last two installments of the tax schedule applicable to estates and donations granted in direct line, as well as gifts between spouses or between partners bound by a PACS. In addition, the legislature abolished the reduction of human-related donations and the donor’s age increased from 6 to 10 years recall time donations.
Finally, the draft gives a precise definition of the taxation of gratuitous transfers made through a trust(Article 6), and secondly, the definition of business assets exempt from Wealth Tax (Article 39).
The maximum authorized spending and the fiscal balance remains unchanged from the initial budget act.
The text was finally adopted by Parliament in early July 2011.
The main features of the bill are:
- removal of the tax shield;
- reform of the scale of the ISF (Wealth Tax) , which will include more than two average tax rates depending on the importance of the taxable net wealth;
- introduction of a device discount ISF for smaller estates;
- 5 points increase in rates for the last two installments of the tax schedule applicable toestates and donations granted in a direct line as well as gifts between spouses or between partners bound by a civil solidarity pact (PACS);
- elimination of discounts granted to gift tax depending on the age of the donor;
- increase of 6 to 10 years of the period of recall of donations ;
- an exit tax on gains from the sale of significant stakes for taxpayers move their tax residence outside France;
- implementation plan to support employment and the alternation ;
- redefinition of the exemption from property professionals to entrepreneurs who run more than one business or dilute their participation in the course of a capital increase;
- relaxation of covenants Dutreil ;
- repeal of the tax on the purchase of online advertising services (” Google tax “)
- establishment of an outstanding contribution to the burden on businesses of oil ;
- establishment of a compensation scheme for victims of Mediator ;
- creation of a contribution for the legal aid of 35 euros will be due to any proceedings before the judicial or administrative judge.