French Lawmakers Adopt 2018 Finance Bill
French deputies have adopted at first reading the 2018 Finance Bill, which includes several of the Government’s key tax measures.
The bill, adopted by the National Assembly on October 24, will reduce compulsory levies by EUR10.3bn (USD12.1bn) by the end of 2018.
The bill includes the abolition of the wealth tax (ISF) and its replacement with a real estate tax (IFI).
Currently, the ISF is applied to income over EUR800,000 in cases where an individual’s net assets exceed EUR1.3m. The ISF rate varies from 0.5 percent to 1.5 percent, and total accumulated wealth and income tax is capped at 75 percent of the individual’s net global income.
Under the new measures, investment income will be removed from the scope of the wealth tax, so that it effectively becomes a tax on high-value property. Instead, capital gains, dividends, and interest will be taxed at a flat rate of 30 percent.
The finance bill also includes a housing tax tax deduction, to benefit 80 percent of households.
The bill also increases tax on energy by EUR3.7bn, and on tobacco by EUR0.5bn.