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NEW DEVELOPMENTS REGARDING THE FRENCH WEALTH TAX

Jan 29 2011
 The Budget Ministry put an end to the tax shield (Bouclier Fiscal) which purpose was to cap the direct tax to 50% of income. Therefore, French residents will now be under the same tax system as non residents since no one will benefit any longer from such shield. 

Further, the conditions under which the wealth tax reform will take place have been disclosed. The tax rate will decrease, but will not be entirely suppressed. The tax threshold will now be of €1,300,000 instead of €800,000 and there will be two tax brackets: 0.25% between €1,300,000 and €3,000,000 and 0.5% above €3,000,000. The tax rate has therefore largely diminished while, in the mean time, its threshold has considerably increased. However, its tax basis is much wider as the tax will be applicable from the first Euro, and not from the threshold as it was the case until now.

François Baroin has announced that he wishes this tax reform to be applicable as of 2011. For this reason, the Budget Ministry wants to shift the dates of submission of the tax returns to September 30th, 2011, instead of the usual June 15th deadline in order to pay such tax.

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