French president elect Macron aims for 25% corporation tax

Newly-elected French president Emmanuel Macron has committed to reducing the rate of corporation tax from its current level of 33.3% to 25%, with the aim of bringing it in line with the EU average within five years

Reductions in the rate of corporate tax will begin in stages from 2018 and form part of Macron’s aim of cutting taxes, with the reductions divided equally between businesses and individuals.

The president, who served briefly as an economics adviser under his precedessor,Francois Hollande, has also said he supports harmonisation of corporate tax rates across the EU to prevent what he calls ‘deadly tax competition’.

During his campaign, the former Rothschild investment banker said he was planning for a €60bn (£50bn) drop in public spending, €20bn(£16.7bn) of which would be the result of tax cuts. Macron has also committed to a rise in environmental taxes, forecast to bring in more than €12bn (£10bn).

Macron’s website states: ‘In total, the reduction in levies will amount to €32bn and the distribution will be equitable: half enterprises (including corporate tax reduction), half households (targeting the middle and popular classes, rewarding better work).’

On personal tax, Macron wants to change the way in which income tax is calculated. Currently a married couple’s incomes are added together, with the result that some couples with two wages pay more taxes than if the two members of the couple lived alone.

This particularly affects the spouse with the lowest income – often a woman – for whom an increase in working income (wages or self-employment) results in a higher tax surcharge than if she were alone. Macron has said he wants to offer individual tax treatment for those who opt for this approach at a cost of €1.5bn.

In addition, Macron wants to remove investment income from the scope of the French wealth tax, with plans for a single flat-rate levy on savings income of 30%.