France needs to bring its level of corporation tax than the european average, a measure that could be financed especially by the removal of the reduced rate which was of benefit to SMES, considers the Council of compulsory levies (CPO). In a report published Thursday, the organization placed with the Court of auditors recommends to the public authorities to adapt this sample to a more open economy that differs greatly from the conditions prevailing at its inception in 1948.
“It is for France to develop a medium term strategy to build a more harmonized framework with its european partners, to fight effectively against the erosion of the bases and the evasion of taxes, and more attractive for companies,” says the CPO. Corporate tax is only 5% of compulsory levies in France and 15.4% of those weighing on business. Its net return is 33 billion euros, after deduction of $ 17.5 billion of rebates and refunds (excluding tax credit competitiveness employment).
nominal rate, unchanged since the mid-1980s, is 33.3%. France stands in the first rank in the european Union on the subject, while the rate was one of the lowest in the EU, thirty years ago, a trend that is not without consequence on the economic attractiveness. In this context, the CPO stressed that reducing the cit rate to the european average of 25% “could be a target,” especially as the intensity of tax competition between countries is not declining, evidenced by the projects that have been announced in Great Britain, or by the future american administration.
For the moment, the government has planned to lower it gradually to 28% by the year 2020 focusing on SMES in a first time, a move that meps have strengthened during the debates on the draft budget by 2017. On this point, the Board echoes recent work showing that the level of profitability of small businesses has nothing to envy to that of the large and that the rate IS reduced to 15% enjoyed by the SMES (less than 250 employees) within the limit of € 75,000 of profits is no longer justified.
The removal of this device a cost of 2.6 billion euros would finance the 28% decrease to a 25% tax rate, that it would cost $ 4.2 billion. Other advanced solutions, a reform of the tax integration in the context of european harmonisation, or the reduced rate applied to patents. The CPO also grows in France to support the proposed common tax base of the EU to fight against tax competition.
It could be accompanied by the establishment of a “tunnel rates”, similar to that in force for VAT in the EU.