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What has the French finance minister said?
The French finance minister (ministre de l’Économie, des Finances et de la Souveraineté industrielle et numérique), Bruno Le Maire, has came up with an idea in an interview to the French regional newspaper, the Sud-Ouest. He wants to reduce the difference between gross and net pay for workers in France.
How does he want to do this?
By reducing the French social charges (cotisations sociales) on salaries, paid by the employee and the employer. The part paid by the employer is known as “les charges patronales“. He wants to reduce them by 5 percentage points.
How does he plan to fund this?
By increasing TVA (la taxe sur la valeur ajoutée), which is sales tax in France.
Who will gain from this?
Economically active people, in other words: employed and self-employed people, as long as the tax cuts are also passed onto the self-employed.
Who will lose out?
People without an income as the cost of goods would be likely to become more expensive. It is also unclear whether pensioners, who already pay a lower rate of social charges, would also receive a cut in social charges.
When will these policies be implemented?
There is not yet a draft law on this, it is just at the idea stage but the French draft budget is normally around September each year and must be voted before the 31st of December each year. You can read our summary of the French 2023 budget here (for the tax year 2024).
Wasn’t Bruno Le Maire in the news for another tax idea recently?
Yes, he wants to see a minimum tax on billionaires at the European and world level, in order to discourage French billionaires from leaving the country and because some billionaires are able to pay lower rates of tax than people with a lot less income.
How can Aisa International help you?
We are authorised to give investment advice in France and we can give you information on the taxation of investment products. We can also introduce you to tax advisers for tax advice.
The views expressed in this article are not to be construed as personal advice. Therefore, you should contact a qualified, and ideally, regulated adviser in order to obtain up-to-date personal advice with regard to your own personal circumstances. Consequently, if you do not, then you are acting under your own authority and deemed “execution only”. Additionally, the author does not accept any liability for people acting without personalised advice, who base a decision on views expressed in this generic article. Importantly, this article is dated and is based on legislation as of the date. It should be noted that legislation changes, but articles are rarely updated. Sometimes a new article is written; so, please check for later articles. Additionally, check for changes in legislation on official government websites. Finally, this article should not be relied on in isolation.
