The current government's 2019 Finance Act continues to make headlines
And for good reason: the new law, which has been under review by the French National Assembly since October 9, will bring a number of changes to the way in which both private individuals and companies manage their finances.
To help you better dissect this new piece of legislation, focus today on several key measures for businesses in the 2019 Finance Bill!
In order to simplify the development of companies, they will now be able to opt for Income Tax (Impôt sur le Revenu - IR) instead of Corporation Tax (Impôt sur les Sociétés - IS).
It should be noted that this choice is by no means irreversible, and that a company can always decide later to opt for corporate income tax.
In a bid to harmonize with the rules established by the European Union, the 2019 Finance Bill aims to progressively lower corporate income tax, bringing its rate down to 28% for profits below €500,000 and 31% for profits above that.
As a second step, the 2019 Finance Bill also aims to significantly expand ACRE(Aide aux Créateurs et Repreneurs d'Entreprise).
From now on, it will be available to all business start-ups and takeovers!
Since 2018, the Régime Social des Indépendants or RSI has changed its name to Sécurité Sociale des Indépendants or SSI and been reintegrated into the Régime Général.
From January 1, 2019, new self-employed workers will be directly affiliated to the Caisse Primaire d'Assurance Maladie or CPAM.
It should be noted that this transfer of management will have absolutely no impact on the actual content of benefits or other social contributions.
Secondly, the 2019 Finance Bill also aims to tackle so-called group taxation.
As such, all transactions relating to the transfer of capital goods between legal entities or individuals within the same group will have no tax impact.
This also applies to transactions involving the transfer of real estate from the private assets of certain legal entities or individuals to the fixed assets of a company.
As far as corporate income tax is concerned, the new rules on group taxation should enable any company belonging to a group in which the parent company holds at least 80% of the capital of the subsidiaries, to transfer investments between subsidiaries without affecting their taxable income.
Finally, the 2019 Finance Bill, will also have an impact on patent taxation.
This measure is designed to encourage companies to locate all their R&D operations in France.
The aim of the bill is therefore to retain the possibility for companies to benefit from a two-for-one corporate income tax rate for any income generated by a patent registered in France, but to grant it in future only to companies registering patents based on innovations developed entirely in France.
In conclusion, all these measures are designed to boost entrepreneurship in France.
Written by our expert Quentin Moyon
October 29, 2018
