The national assembly of France adopted the Amended Finance Law and the Amended Finance Law on Social Security for 2014 on 23 July 2014.The Constitutional Court will now review the law and after signing by the president the law will enter into force.
In France the standard corporate income tax rate is 33.33% with an additional social surcharge of 3.3% which is applicable to the amount of corporate income tax liability exceeding EUR 763,000.
A surtax of 5% was initiated in 2011 for taxpayers with turnover exceeding EUR 250 million which was increased to 10.7 for fiscal years ending on or after 31 December 2013. The surtax considering as temporary was primarily designed to apply only to fiscal years ending on or before 30 December 2015.
But the amended Finance Law has extended the period of the exceptional surtax to fiscal years ending on or before 30 December 2016. After that date the overall corporate tax rate would become 34.4% with a social surcharge of 3.3%. The surtax applicable on dividend distributions would be excluded.
The amended Finance Law also provides a penalty for failure to comply with each reporting obligation. According to the new law a fine of EUR 5,000 or, if higher, a penalty amounting to 10% of the additional tax liability reassessed and borne by the taxpayer for failure to furnish the required e- file and EUR 20,000 would be applied for failure to provide the analytical accounting or consolidated accounts to the tax authorities. These new measures will apply only to future tax audits after the Amended Finance Law becomes effective.
