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France's Tax Increase Plan Faces Opposition
The French government's plan to increase taxes on high-income households and large companies is facing resistance and challenges. The impact on major corporations and the potential consequences are being debated.
French
France
PoliticsEconomyLabour MarketFranceInternational TradeBusinessTaxes
National AssemblyLvmhHermèsSafranAirbus
Michel BarnierLayla RahhouThomas ZlowodzkiAndrzej KawalecEmmanuel Cau
- How much will LVMH pay in additional taxes, and what about other major French companies?
- LVMH, the world's leading luxury group, has disclosed that it will pay an extra \u20ac700-800 million in taxes in 2024 due to the new measures. Other major French companies like Hermès, Safran, Airbus, and Vinci are also expected to pay significant additional taxes. The total estimated revenue for the government from these taxes is \u20ac8 billion in 2025 and \u20ac4 billion in 2026.
- How has the new tax plan been received by various economic sectors, and what are the concerns being raised?
- The new taxes have been met with resistance from various sectors, particularly distributors who argue that the tax is disproportionate and based solely on turnover, ignoring profit margins. Concerns are raised about the potential negative impact on competitiveness, investment, employment, and purchasing power. Some are even worried about the potential for tax optimization strategies and the uncertainty of the expected revenues.
- What is the projected impact of the increased corporate tax on the earnings per share of affected companies?
- Analysts at Oddo BHF have assessed the impact of the increased corporate tax on the earnings per share (EPS) of 88 listed companies. They found that while the impact is generally low, around twenty companies will experience a 4-8% decrease in EPS over the next two years. This affects not only CAC 40 companies but also those in sectors such as poultry, temporary work, and services.
- What is the current attitude of large French companies towards the new tax measures, and what are their concerns?
- Despite initial cooperation, large companies' discourse is becoming more critical as the tax burden increases. Concerns about competitiveness, investment, employment, and potential cascading effects on subcontractors are voiced. The uncertainty surrounding the tax revenues and the potential for tax optimization strategies add to the existing concerns.
- What is the status of the French government's plan to temporarily tax high-income households and large companies?
- The French government's plan to temporarily tax high-income households and large corporations has faced challenges in the National Assembly. Deputies removed the temporary nature of the tax on high-income households, making it permanent. The tax on large corporations remains temporary, at least for now.