The constitutional Council has validated the core part of the law of finance in 2017, while expressing reservations on the forecasts of the budget deficit.
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François Hollande and the government of Bernard Cazeneuve, may push a “phew” of relief. The collection at the source, which is one of the most important reforms of the last five years, has not been censored by the constitutional Council. Called to vote on the budget by 2017 – which introduces the new method of calculation and collection of income tax, the high court has dismissed the complaints made by opposition parliamentarians against the device. So far, its decision, rendered Thursday, December 29th, does not mean that this “big bang” tax is posted in its entirety as the Council only examined on the few paragraphs which are disputed by the elected officials of the right. The other provisions, “saved,” by their actions, may very well be harmed later – through, for example, of priority issues of constitutionality (QPC).
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regarding the withholding at the source, which should enter into force at the beginning of 2018, a number of criticisms had been expressed by the deputies and senators of the opposition. They considered the extent unintelligible, given the complexity of the different sampling rate. An Argument swept by the Council : there is ” a common-law rate “, corresponding to the puncture on the overall income of the household, and ” rate default “, applicable, at the request of the taxpayer, only on his income. Thus, an employee who desires that his tax rate is not known to the employer can ” choose [the] default rate “, argues the Board.
2017, the year of transition
Another accuses the elected officials of the right : the breach of privacy, related to the fact that the administration communicates to the business rates levy. This principle is actually scratched, admits the Council, but such ” the infringement is justified by the general interest “ : in the present case, it is to prevent taxpayers undergo ” a one year lag between the collection of revenues and the payment of the tax “, as is the case at the present time. Moreover, adds the court, an individual may choose ” the default rate, which does not reveal the tax rate of his home, “.
The Board also rejects the idea, supported by the parliamentary opposition, according to which the device would violate the principle of equality. The point is criminalized for 2017 : for this ” year of transition “, the taxpayer will pay a tax on its income in 2016 and in 2018, the puncture will be on its resources of 2018. Consequently emerged the fear that some taxpayers, executives of companies, in particular, derive part of the reform to increase by 2017 their cash flow, which would exempt these taxes. Not at all, argues the Council : the finance bill contains clauses that anti-abuse ” tend to avoid “ that some taxpayers are able to ” to arbitrate in favour of a higher compensation in respect of the year 2017 “.
outside of the withholding at the source, the elected Republicans have challenged the Council on the deceptions that recèlerait, in their eyes, the budget for 2017 : growth assumptions are overstated, expenses, deferred inflows of anticipated revenues… so Many subterfuges in order to improve artificially the financial statements. The Board does not subscribe to such an analysis but, rather unusually, he expresses reservations supported, which abound in the sense of the observations of the Court of accounts. And does he consider, with a nice sense of understatement, that ” the assumptions for 2016 and 2017 may be regarded as optimistic, especially in regards to the deficit to 2017 “. It also notes that the finance bill ahead of actually a year-some tax revenue “, and that the risk of a skid of the ” public spending are more important in 2017 than in previous years “. In addition, there are expenses that ” wi ll only produce their effects on the fiscal balance that from 2018 “, that is to say, after the departure of Mr Hollande on the Elysee… To the extent, counterbalances, you can’t accuse the government of having had ” the intention to distort the broad outlines of the balance of the law “. Similarly, he adds, ” it is not clear from the elements [available] as the resources and expenses of the State for 2017 would be presented in a manner so sincere “.
” historic Reform “
The government is doing so rather well. What have not failed to emphasize, Thursday night, the minister of finance, Michel Sapin, and the secretary of State for the budget Christian Eckert. With a small hint of complacency, they welcome, in a press release, that the budget for 2017 and ” the historic reform of tax at source ” are validated.
But there is a caveat to bring in as several articles of the law have been invalidated by the constitutional Council. Especially the one who introduced the ” Google tax “. The measure in question bore this name because she was trying to fight against the practices of tax optimization used by the american firm, and by other giants of the new technologies sector (Apple, Amazon…), which are designed to exfiltrate the profits, achieved in a country, to another where compulsory levies are low. MESSRS Eckert and Fir, at first, were not in favour of this provision, advocated, in particular, by the deputy Yann Galut (PS, Dear). But an agreement had finally been reached between the executive and its majority.
The Council has censored the “Google tax” because it provided to the tax authorities ” the power to choose the taxpayers who should or should not fall within the scope of application of the tax on companies “. the ” This is a decision that is incomprehensible, said Mr. Galut to Libération.fr. in once more, the constitutional Council chooses to censor a text against tax evasion. “
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