2018, a year rich in reforms for corporate taxation!
The 2018 Finance Bill is the first of Emmanuel Macron's five-year term. It incorporates the main measures contained in his campaign program and aims to be ambitious in accelerating economic growth.
Businesses are the key lever on which the President of the Republic wishes to boost economic growth.
Validated by Parliament on November 22, it contains several major changes to their taxation, with more to come in future years.
Lower employee contributions
The 2018 Finance Bill aims to restore purchasing power to the French by abolishing several employee contributions.
This relief will take place in two stages
On the one hand, the health contribution will be abolished on January 1, 2018, as will the unemployment contribution on October 1. In return, the CSG will increase by 1.7 points from January 1.
Private-sector employees will therefore be the first to benefit from this measure, and pensioners will be even more concerned.
Lower corporate taxes
Emmanuel Macron wants to reduce corporate income tax (IS), currently set at 33.33%. The aim is to gradually reduce the rate to 25% by 2022.
In 2018, the first 500,000 euros of profits will be taxed at 28% for all companies. Tax rates will remain unchanged thereafter.
In 2019, the first 28% bracket will be combined with a 31% rate on the remainder of profits. In 2020, the government intends to tax all profits at 28%, followed by 26.5% in 2021 and 25% in 2022.
The reduced rate of 15% for SMEs continues to apply
Repeal of the marginal rate on salaries
The higher payroll tax rate of 20% will be abolished in favor of a return to the 2013 tax regime, with taxation at a rate of 13.60%.
A blank year for social security contributions for business start-ups and takeovers
One of the government's key measures is the creation of a blank year for social security contributions for business start-ups and takeovers from January 1, 2019.
The aim of this measure is to encourage business start-ups and takeovers. All individuals concerned will be fully exempt from social security contributions for the first year of business, up to a limit of €40,000 in sales.
The long-awaited abolition of the RSI
The abolition of the RSI (Régime Social des Indépendants - self-employed workers' social security scheme) , called for by many unions and self-employed workers, will gradually come into force until 2020, when the status of self-employed workers will be aligned with that of salaried workers.
A two-year period will be needed to include the self-employed in the general scheme and to organize the takeover of RSI missions by the CPAM or URSSAF, for example.
Lower social security contributions for the self-employed
The self-employed will benefit from several measures to reduce social security contributions, including a 2.15-point reduction in family contributions.
Health insurance contributions will also be reduced by 1.5 points for self-employed workers earning up to €43,000 a year. This means that 75% of the self-employed will benefit from this tax reduction.
In concrete terms, the government anticipates that a self-employed person earning the equivalent of one minimum wage will save 270 euros a year, compared with 550 euros a year for a self-employed person earning 2,400 euros a month.
Micro-entrepreneurs will benefit from lower contributions in 2018. Family contributions will be reduced by 2.15 points and health contributions by 5 points on a sliding scale, up to 43,000 euros in annual sales.
A doubling of ceilings for micro-businesses
The advantages offered by the micro-entrepreneur scheme apply to all self-employed people whose activity does not exceed sales of €33,200 for services and the liberal professions, and €82,800 for commercial activities.
The 2018 Finance Bill plans to double the current ceilings, i.e. 70,000 euros for services, liberal professions; and 170,000 euros for commercial activities.
No increase in VAT exemption for micro-entrepreneurs
CFE exemption for very small businesses
All businesses with sales of less than €5,000 will be fully exempt from paying the CFE (Cotisation Foncière des Entreprises) starting in 2019.
Written by our expert Paul LASBARRERES-CANDAU
December 8, 2017
