The approval of the super profits tax reflects a growing sentiment among left-wing parties to hold large corporations accountable for their pandemic-era profits.
The debate surrounding the surtax highlights the divisions within French politics, particularly between leftist parties advocating for higher taxes on corporations and right-leaning parties concerned about the impact on business competitiveness.
The temporary nature of the surtax, set for two years, indicates a compromise aimed at balancing fiscal responsibility with the need for corporate contributions during economic recovery.
If the surtax is implemented, it may lead to increased scrutiny of corporate profits in France and potentially influence similar measures in other European countries.
The ongoing debates about taxation may result in further modifications to the tax code as the government seeks to balance economic recovery with public sentiment regarding corporate responsibility.
The outcome of the upcoming vote could set a precedent for future fiscal policies in France, particularly regarding the taxation of large corporations.
The Finance Committee of the French Parliament has approved a new tax on the 'super profits' of large companies, a move aimed at generating an estimated 15 billion euros for the national budget. This tax, which targets companies with a turnover exceeding 750 million euros, is designed to ensure that those who have profited excessively during recent crises contribute to national solidarity. The tax will be calculated on profits that exceed 1.25 times the average annual profits from 2017 to 2019, with rates set at 20%, 25%, and 33% for different profit brackets. The proposal will undergo another vote next week as part of the 2025 State budget discussions.
In addition to the super profits tax, the Finance Committee has also approved increases in local taxes, including a rise in the housing tax on second homes and an increase in the development tax on building permits. The committee has also proposed reducing the research tax credit, a measure introduced during François Hollande's presidency, reflecting ongoing debates about its effectiveness in stimulating growth and employment.
