2 National tax systems: Structure and recent developments

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1 France Structure and development of tax revenues Table FR.1: Tax Revenue (% of GDP) Ranking Revenue (billion euros) A. Structure by type of tax Indirect taxes VAT Taxes and duties on imports excluding VAT Taxes on products, except VAT and import duties Other taxes on production Direct taxes Personal income taxes Corporate income taxes Other Social contributions Employers Households Less: capital transfers ( 2 ) Total Memo item: Total payable tax credits B. Structure by level of government as % of total taxation Central government State government ( 1 ) n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Local government Social security funds EU institutions C. Structure by economic function as % of GDP Consumption Labour of which on income from employment Paid by employers Paid by employees Paid by non-employed Taxation trends in the European Union DG Taxation and Customs Union

2 National tax systems: Structure and recent developments 2 Table FR.1: Tax Revenue (continued) (% of GDP) Ranking Revenue (billion euros) Capital Income of corporations Income of households Income of self-employed Stock of capital D. Environmental taxes as % of GDP Environmental taxes Energy of which transport fuel taxes : : : Transport Pollution and resources E. Property taxes as % of GDP Taxes on property Recurrent taxes on immovable property Other taxes on property F. Implicit tax rates % Consumption Labour ( 1 ) This level refers to the Länder in Austria and Germany, the gewesten and gemeenschappen / régions et communautés in Belgium, and the comunidades autónomas in Spain. ( 2 ) Representing taxes assessed but unlikely to be collected. Source: DG Taxation and Customs Union, based on Eurostat data. Figure FR.1: Tax revenues by main taxes, compared to EU-28, (in % of GDP) Consumption 15 Social contributions Indirect taxes 10 Capital 5 by employers 0 Direct taxes by non-employed by employees FR EU-28 Source: DG Taxation and Customs Union, based on Eurostat data. DG Taxation and Customs Union Taxation trends in the European Union 93

3 Latest tax reforms Table FR.2: Latest tax reforms Description of measure Change Date Personal income tax 0.1% increase in the thresholds of the five tax brackets and further Base decrease broadening of the rebate (décote) (increase of the ceiling below which the rebate apply and differentiation according to the family situation) Corporate income tax Phasing out of the solidarity surcharge on companies (C3S) with the further Phase-out (decrease) In force from: 01/01/2016 increase in the tax base allowance - step 2 Property taxes Maintaining of some tax allowances for certain tax payers with low revenues Base neutral and implementation of a system smoothing/mitigating the impact of the removal of the exonerations for tax payers who are longer eligible Employers social contributions Promulgation of the of the second phase of the Responsibility and Solidarity Rate decrease In force from: 01/04/2016 Pact: reduction of employer social security contributions by 1.8 point for wages up to 3.5 times the minimum wage. Administrative, compliance related measures Online income tax declaration to become progressively compulsory for tax payers with internet access (between 2016 and 2019 depending on the tax amount) Strengthening of the obligation to pay taxes via direct bank debit or online transfer Obligation for online platforms to inform their users of their tax obligations (including the taxable amount for the fiscal year) Source: DG Taxation and Customs Union. 94 Taxation trends in the European Union DG Taxation and Customs Union

4 National tax systems: Structure and recent developments 2 Main features of the tax system Table FR.3: Individual taxation (PIT) General Base and jurisdiction Taxation of couples and families System and Applicable rates Global / Labour income scheme Basic allowance Rate schedule Surtaxes ( 1 ) Resident: worldwide income (subject to double-tax relief)) n-resident: domestic income Joint taxation (tax unit is the household) Quotient familial (1 share per parent, 1/2 share for the first two children or dependents, 1 additional share for each additional child or dependent) PIT includes the general income tax ( Impôt sur le revenu ), the social levy (Prélèvements sociaux sur les revenus du capital), the general social welfare contribution (CSG) and the welfare debt repayment levy (CRDS) Up to EUR tax free Progressive - 5 brackets: 0%, 14%, 30%, 41%, 45% Top marginal rate on earnings: 45% (> EUR ) Exceptional contribution on incomes: 3% ( > EUR /individual) or 4% ( > EUR /individual) CSG (partially deductible): 7.5% (earnings) CRDS: 0.5% Regional and local surcharges Top statutory PIT rate (including surcharges) (1, 2) 50.23% Owner occupied dwelling t included Income tax, plus social contributions (15.5% = social levy: 6.8% + CSG: 8.2% (capital Capital income income) + CRDS: 0.5%) Income from renting movable property Included Income from renting immovable property Included Capital gains (immovable property) 19% flat rate (exemptions apply) % social contributions Capital gains on securities subject to progressive income tax, with reduction Capital gains (movable property) regime depending on length of time securities held, and whether SME; gains on business assets held < 2 years taxed as business income, >2 years 16% flat rate Subject to progressive income tax for 60% of amount % social contributions; Dividends 21% withholding tax creditable against final tax liability (possible exemption < EUR /individual) Subject to progressive income tax % social contributions; 24% Interests on deposits and special savings accounts withholding tax creditable against final tax liability (possible exemption <EUR /individual); certain special savings accounts are exempted Subject to progressive income tax % social contributions; 24% Interests on corporate and government bonds withholding tax creditable against final tax liability (possible exemption <EUR /individual) Other specific features and alternative regimes Other tax provisions Main tax credits & deductions Income tax: yes, in percentage (10%) OR based on real expenses; capped Professional expenses (EUR ) CSG/CRDS:yes, 1,75 %, capped (EUR 2 663) Pension savings yes Mortgage Tax credit for (pre-sep.2011) purchase of main home Refundable tax credits:earned income tax credit (prime pour l emploi), childcare for young children;tax credit or reduction for home employees Others (not exhaustive) Tax reductions:low income households, certain type of investment, charitable or other donations Treatment of losses (business/self-employed income) 6 year carry forward (can be transferred to spouse or partner) te: These rules are the ones in force on , and therefore applicable in 2016 for the assessment of 2015 revenues. ( 1 ) The CSG rate varies depending on income source. Values given are rates applicable to earnings. ( 2 ) At top marginal rate, the base is reduced to 93.9 % of total earnings, following the deduction of SC (1 %) and partial CSG (5.1 %) payments. The calculation is as follows: 45 % (100 %-5.1 %-1.05 %) % % DG Taxation and Customs Union Taxation trends in the European Union 95

5 Table FR.4: VAT Tax rates Standard 20% Reduced rate(s) 2.1% (super-reduced rate), 5.5% and 10% Table FR.5: Corporate Taxation (CIT) Tax rates minal corporate income tax rate 33.33% (standard rate) ( 1 ) Central government surcharge Regional government surcharge Local government surcharge Top statutory CIT rate (including surcharges) 33.33% (standard rate) ( 1 ) Special tax rate for SMEs (all-in rate) 15% Tax base Domestic income Anti-avoidance (75% of net interest charges for companies generating more than Limits to interest deductions 3 million of net interest expenses; thin cap rules, ratio and arm s length test) Transfer pricing rules, arm s length principle Controlled foreign company (CFC) Controlled foreign company (CFC) for passive income only Allowance for Corporate Equity ( 1 ) The rate is 34,4% if the 3.3% additional social surcharge for large companies is included. Table FR.6: Social contributions Employment income, income from business and self-employed activities, Base income from sports/entertainment, benefits in kind, income from occasional activities Employers contributions Total rate 21.22% of which: Pensions 18%, Healthcare 2.12%, Unemployment 1% (3.9 above EUR ), Accident insurance 0.1% (up to 7%) Capped contributions Employees contributions Total rate 8.97% of which: Pensions 5.7% (plus 1.5% for over 53), Healthcare 2.12%, Unemployment 1.15% Capped contributions ( 1 ) Capital income is subject to 15.5% social contributions (social welfare levy: 6.8% + CSG: 8.2% + CRDS: 0.5%) - see above Table FR.7: Wealth and transaction taxes Inheritance and gift tax Real estate taxation Recurrent real estate tax Regional differentiation Tax discount for primary dwelling Real estate transfer tax Net wealth tax Source: DG Taxation and Customs Union, on the basis of information provided by the national finance ministries. For more detail the TEDB database contains an extensive inventory of the main taxes in force in EU Member States. 96 Taxation trends in the European Union DG Taxation and Customs Union