Tax Incentives by France to Help Investments: France is known as one of the greatest industrial power in the old days, but right now; it has felt its own share of industrial decline. It wishes to put an end to this stagnation and the current tax incentives it has implemented.
France To Give Investors Tax Incentives
Labor cost has been one of the major problems experienced by business establishments in France. In the past decade, almost 750,000 industrial jobs were lost by the country.
Apparently, businesses cannot cope up with the tax burden and the employer-employee contract rules that bind the company and the workers. As a result, France was seen as an uncompetitive and unattractive place for foreign investors.
In response to this concern, the Government has announced a cut on labor costs while raising the taxes on consumption. This meant a 6 percent reduction with the social security charges for workers, which often amounts to 2.5 times of the minimum wage or 9.40 Euros an hour.
Prime Minister Jean-Marc Ayrault believes that with this move, more business owners would focus on hiring more workers and investing more in the country because of the savings they will gain.
It has also announced that three tax rates would be introduced offering rates of the 15% for TPEs or the very small companies, 30% for SME’s, and 35% for large companies. This is believed to help re-establish balance between the taxation experienced by small and large companies while helping those in crisis hold on to their investment with hope.
Additional features created was the extended tax credit provisions for audio visual productions and filming, as a strategy for many film makers and producers to consider France as a great location for their films. However, the cap on taxes for international films would be increased from EUR 4m to EUR 10m for every film in the year 2014.
On the other side, taxes on sales would have to be increased from 19.6 to 20 percent for the main VAT rate and 10 percent from 7 percent of restaurant bills and property repairs. This would then generate close to 10 billion Euros for France, a boost to its economy equivalent to 0.5%, and an additional 300,000 jobs when the year 2017 arrives.
This message has already attracted a handful of companies to go and look at what France has to offer their business. If it goes according to plan, then the country expects 300 new foreign investments each year to be set-up in France, which is a great push up to the economic ladder at the start of the year 2013.