The Council levies compulsory (Court of auditors) considers the tax on corporations is too complex and too high (photo illustration). ( AFP / PHILIPPE HUGUEN )
Seventy years after its creation, the IS must evolve to adapt to the new situation in the global economy, writes the Council, which recommends in its report a greater tax harmonisation at european level. The IS was created in 1948. This is the first direct tax for French companies, with a net annual proceeds of 33.5 billion euros. Some 1.5 million businesses are subject.
To the Board, it “has been created in an economy much less open than it is today.” The development of this tax iconic appears, therefore, “desirable”, the report judging the consistency of the initial IS jeopardized by the “mobility increased international capital, businesses and talent”.
The TAX ON THE COMPANIES of THE HIGHEST IN The EU
At issue in particular : the tax rate for French companies, considered to be too high in comparison with that applied in other european countries. This affects the attractiveness of France and promotes, according to his detractors – the evasion of profits and tax avoidance strategies. France has, in effect, the corporate tax is the highest of the 28 members of the european Union, with a nominal rate of 33.3%, or 38% if we add the social contribution on profits and the exceptional contribution on cit. And this, despite the existence of a reduced rate of 15% for small businesses.
however, the performance of the SI is relatively low, due mainly, according to the report, the low profits of French companies. “To have the tax rate the higher does not guarantee to have the highest yield,” says Didier Migaud, president of the Court of Accounts. Who warns against tax competition is increasing, while the United Kingdom has planned to lower its cit rate from 20 to 17 per cent by 2020.
Faced with this situation, the government is committed to reducing the cit rate to 28% from 2017 for a part of SMES, and then to all businesses by 2020, with intermediate level in 2018 and 2019. With in line of sight to a possible harmonisation at the european level. “It is a movement that must be continued”, even if”it is not necessary to engage in a race to the bottom tax”, says Didier Migaud. In its report, the Council of compulsory levies proposes to reduce the rate IS a short-term “towards the european average in the major economies”, or 25%. “This effort could be in part secured by the developments of the basis and methods of calculation of the tax,” judge the institution.
WHAT is the FUTURE FOR THE REDUCED RATE OF SMES ?
The reduced rate of IS, which have benefited 670.000 small and medium-sized enterprises in 2014, and that the government has decided to maintain a portion of the profits of the companies whose turnover is below 50 million euros, on the other hand has more place to be, according to the CPO, who advocates its removal. But this reduced rate is being defended by the representatives of the undertakings concerned, as well as by many meps, who consider it as necessary to support activity and employment in SMES, considered to be more fragile financially than large companies. “It’s part of the preconceived ideas that do not correspond to reality”, ensures his side Didier Migaud, for which the financial profitability net of SMES is today superior to that of the enterprises of intermediary size (ETI) and large companies.
in conclusion, the Council asserts that the proposed guidelines “are intended to be effective and pragmatic”. It calls, beyond these reforms, the short-term, to strengthen the cooperation between european States in the fight against the tax optimization aggressive”… and make sure that the companies really contribute “to the financing of public services from which they benefit”.