Income tax cuts for businesses and individuals are being lined up by the French Government ahead of next year’s elections.
The Government has confirmed a previous announcement that small- and medium-sized companies would soon benefit from a 28 percent intermediate rate of corporate tax, easing the jump from the 15 percent lower rate of income tax to the headline rate of 33.33 percent. Under plans unveiled by the Government on September 9, the corporate tax rate would then be lowered to 28 percent for all companies by 2020.
The Government has also proposed income tax cuts for individuals worth approximately EUR1bn (USD1.12bn) in 2017. The tax cuts are aimed at single taxpayers earning less that EUR1,900 per month, and couples with monthly income of less than EUR3,800.
The personal income tax cuts are expected to benefit around 5m households, with the average tax saving in 2017 estimated at EUR200.
However, presidential elections are due to take place in April and May next year, and with President Hollande trailing his rivals significantly in the polls, it remains to be seen whether the Socialist Government remains in power to steer the tax cut plan through in its entirety.
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