France repeals 75% tax on high income

Published: 29 December, 2012, 15:53

France's Constitutional Council has annulled a 75% tax rate on income above 1mn euros due to be introduced in 2013, which has already forced a number of wealthy residents to leave the country.

­Significant tax hikes including those on capital gains and on income above 1mn euros were a center piece of President Francois Hollande’s budget plan to cut the country’s 33bln euro budget shortfall next year. With tax increases Hollande’s Government expected to bring in up to €20bn extra. The government's 2013 budget was approved by parliament in September.

Facing harsh criticism from the French business community over the tax rises, the Government said it was considering easing the tax burden on small business earlier this year.

Last year 16 executives and wealthy investors signed a petition calling for a higher tax on the rich in a symbolic gesture to help the French economy, but they didn’t expect the tax rate could be as high as 75%. Many of them, including L’Oreal CEO Jean-Paul Agon criticized the rise.

The 75% rate for high earners was seen as largely symbolic since it would have only applied to some 1,500 people for a temporary period of two years.

Meanwhile, many of the wealthiest French have left the country to avoid tax. London, Brussels, and Luxemburg have become a popular destination among the French rich, including famous actor Gerard Depardieu. Depardieu announced his plans to renounce his French citizenship and to move to Belgium. It was also announced that Depardieu is due to sell his historic Paris mansion. Reports say the property is listed at $65 million.

Bernard Arnault, the boss of luxury goods group LVMH which includes Christian Dior and Louis Vuitton confirmed earlier in 2012 he had applied for Belgian citizenship.

FULL STORY: http://rt.com/business/news/france-rich-tax-repeal-060/