Posted Oct 19, 2022, 7:18 PMUpdated on Oct 19, 2022 at 7:45 PM
The amendments that survived 49-3
In total, 117 amendments were retained by the government for the first part of the finance bill adopted this Wednesday without a vote, through article 49.3 of the Constitution. In this total, an overwhelming share comes from the presidential camp, even if the executive finally accepted some proposals from the opposition during the parliamentary debate. This is particularly the case of the increase in the tax-free ceiling for restaurant tickets, which will go from 11.84 euros to 13 euros. The measure, proposed by Marc Le Fur (LR) “will allow a rapid gain in purchasing power” according to Bercy, and should cost 140 million.
The oppositions had also done a lot of forcing to impose an increase in the ceiling of the tax credit for childcare. The majority finally supported this request, which will result in increasing the spending ceiling for this tax credit to 3,500 euros, against 2,300 euros currently. Cost to public finances: 200 million, one of the most expensive amendments of the lot.
Pressure from the opposition had also pushed the presidential camp to concede the establishment of a tax system for veterans, with the establishment of a half tax share for widows. A measure taken, with the key to a substantial bill of 130 million. Among the other measures taken from the oppositions, that of Valérie Rabault (PS) extending the reduced rate of VAT to 5.5% for products linked to Covid (masks, etc.).
The executive also made some gestures for the most turbulent members of the majority. After having revoked his tax on superdividends, he nevertheless supported the tax gesture desired by the Modem for SMEs, with the revaluation of the profit ceiling below which a company pays IS at the reduced rate of 15%, raised from 38,120 euros at 42,000 euros. A first amendment had mentioned 47,000 euros, but that would have increased the measure by 200 million. In the end, it will still cost 170 million. At the instigation of Horizons, a shield protecting communities from soaring energy prices was added in extremis this Wednesday, for a bill of 1.5 billion for the State.
Finally, vis-à-vis Renaissance, the government has given pledges to the left wing of Macronie by targeting private jets: after the back-to-school controversy, the kerosene tax applied to them will be doubled, to align with that of gasoline used by cars.
The European mechanisms that the government has imposed
The new version of the PLF incorporates the amendment tabled by the government to transpose into French law the European mechanism for the contribution of energy companies. It is in a way the alternative to the tax on “superprofits”, which ignited the debates of the start of the school year. This contribution, which completes the French system already in place, will bring in around 7 billion additional euros, according to the latest estimates from Bercy.
Concretely, the State will recover the rent of electricity producers from nuclear, coal or renewables: the profits generated when electricity is sold at more than 180 euros per megawatt hour between 1er December and June 30 will be forfeited. These sums will be used to finance the support measures for businesses and SMEs which are in preparation on the Bercy side and which should be unveiled in the coming days.
With the amendment on the contribution of electricity producers, comes the amendment on the “temporary solidarity contribution”, also tabled by the government to transcribe the European agreement. This involves taxing the income from fossil fuels, ie refining activities in France. The Minister of the Economy estimated that this contribution, which will affect TotalEnergies, will not bring in more than 200 million euros per year.
These proposals of the opposition or the majority put in the trash
The amendment that caused the most noise was the one brought by the Modem, an ally of the majority, aimed at increasing to 35% the taxation (“flat tax”) of French taxpayers receiving dividends that exceed 20% the average of the last five years. This proposal by Jean-Paul Mattei received no fewer than 227 favorable votes, including those of 4 elected LRs and 19 Macronist deputies from Renaissance – some of them also having supported the idea of charging companies that have generated “superprofits “. Bercy strongly opposed it, judging that this measure would go against its policy of lowering taxes and that the surcharge could penalize groups which did not pay dividends during the Covid crisis.
The other amendment snatched by Jean-Paul Mattei against the government’s opinion did not survive the sorting allowed by 49.3 either: it was to apply the “flat tax” of 30% on the income of the owners properties that comply with rent controls and a certain level of environmental quality. The measure would have cost no less than 5 billion euros to the State, according to Bercy.
Same fate for another amendment calling into question the policy pursued since 2017: that tabled by LR deputies, which aimed to repeal the Macron reform of the expatriation tax (exit tax). This tax on latent capital gains paid by residents leaving France had been greatly relaxed in the name of attractiveness and efficiency. The time limit for holding shares imposed after departure (to be exempt) was reduced from fifteen years to two years. The Assembly had wanted to restore the initial duration, but the executive finally did away with this initiative.
The LRs were also very keen on the adopted proposal aimed at creating a tax credit for global energy renovation, replacing the current MaPrimeRénov ‘system, which they considered poorly calibrated and insufficiently accessible to the middle and upper middle classes. Again, no government.
On the left, the proposal by PS MP Christine Pirès-Beaune to transform the tax reduction for accommodation costs linked to dependency (Ehpad) into a tax credit ultimately did not survive. Adopted against the advice of the government, the measure would have cost 700 million euros, indicates Bercy. The Ministry of the Economy also vetoed an amendment initially carried by an elected Renaissance, withdrawn and then taken up by Boris Vallaud (PS). It aimed to transform the tax reduction for mileage incurred in the context of a voluntary activity into a tax credit. This would also have helped French volunteers who do not pay income tax.