Bird & Bird - France Tax and assets newsletter August 2012

20 August 2012

Laurence Clot

Main provisions of the second Amended Finance Bill for 2012

Taxation of individuals 

  • Exceptional Wealth Tax surcharge


Individuals within the scope of the Wealth Tax in 2012 (taxable net assets on 1st January 2012 at least equal to €1.3m) will be subject to an exceptional surcharge to be paid on 15th November 2012.

This surcharge will be computed by applying the 2011 progressive scale (rates from 0.55% to 1.8%) to the amount of the net asset value used for the computation of 2012 Wealth Tax.

The 2012 Wealth Tax already paid will be offset on this exceptional surcharge by application of terms which have to be specified.

It has to be noted that no ceiling based on the income applies for the calculation of this exceptional surcharge.


  • Inheritance and gift tax


Tax exemption in direct line for inheritance and gift tax has changed from 159,325 euros to 100,000 euros.

Additionally, the period for which prior gifts are accounted for has moved from 10 to 15 years.

The time period has also changed from 10 to 15 years in regards to the exemption of family gifts in cash.

These new measures apply to granted gifts and inheritance occurred since 18th August 2012.


  • Social contributions apply on French sourced real estate income and gains of non-residents


French sourced real estate income and capital gains, earned by a non-resident, will be subject to social contributions in France, the current rate of which amounts to 15.5%.

This measure applies to real estate income received as from January 1st 2012 and to real estate capital gains realized since 18th August 2012.

These social contributions come in addition to the income tax and capital gains tax on immovable property to which non-residents were already subject for their income and capital gains generated by real property located in France.


Social Measures

  • Increase in social contribution (“forfeit social”)


The rate of social contribution (“forfait social”) is carried from 8% to 20% on income paid by an employer, the amount of which is not subject to social security contributions.

Are notably concerned :

  • The contribution of the employers in employee savings plans (employee profit sharing)

  • Voluntary profit sharing bonuses …


These new rates apply to income or earnings paid since 1st August 2012.


  • Increase in the rate of employers and employees specific wage contributions on stock-options and free grant of shares


The wage rates of employers and employees contributions on stock-options increases respectively from 14% to 30% and from 8% to 10%.

These new 30% and 10% rates are also applicable to the free grant of shares.

The increase to 30% of the rate of the employers' contribution applies to options granted and to the grants made since 11th July 2012.

The new rate of the wage contribution for employees should apply to the shares sold as from the coming into force of the law i.e. as from August 18th, 2012.


Contacts :

Should you have any additional questions please contact:

Laurence ClotAttorney at law Partner, Tax
laurence.clot@twobirds.com

Rébecca Feliman Attorney at law, Tax
rebecca.feliman@twobirds.com

Vaea Pery, Attorney at law, Tax
vaea.pery@twobirds.com

Anton Chyrkov,  Attorney at law, Tax
anton.chyrkov@twobirds.com

Authors