France contemplates tax increase for huge organizations
Date
9/30/2024 8:25:02 AM
(MENAFN) The French government is contemplating raising taxes on major corporations as part of its strategy to address significant gaps in public finances, according to a report by Le Monde on Sunday. The proposed 2025 budget may introduce an 8.5 percent increase in corporate tax for companies with annual revenues exceeding EUR1 billion (approximately USD1.1 billion). This so-called “exceptional contribution” on the profits of large firms is expected to be a temporary measure, potentially generating around EUR8 billion in revenue for the upcoming year.
In addition to the corporate tax hike, the government is exploring the implementation of a tax on share buybacks. This practice, where companies repurchase their own shares to decrease market supply and enhance share value, could be subject to this new levy, estimated to raise about EUR200 million. Notable corporations such as financial services company BNP Paribas, luxury goods conglomerate LVMH, and energy giant TotalEnergies may be directly impacted by this tax.
Prime Minister Michel Barnier’s office has not provided comments on these potential measures ahead of his scheduled policy speech in parliament on Tuesday, as reported by Reuters.
The urgency for these financial strategies is underscored by France’s escalating public debt, which reached a record EUR3.228 trillion at the end of June, according to data from the French National Institute of Statistics and Economic Studies. This figure represents 112 percent of the nation’s GDP, significantly exceeding the European Union’s stipulated threshold of 60 percent. Among European Union member states, only Greece and Italy have higher levels of general government debt than France, highlighting the pressing need for fiscal reforms.
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