The draft Finance Bill for 2016 has been presented in France.

According to the proposals the income tax-exempt threshold will be increased to EUR9,700 (USD10,840). For income above this threshold the income tax rates will be reduced.

The tax rates for various thresholds will be as follows:

From 2011 companies liable for corporate tax with turnover exceeding EUR 250 million are subject to a surtax on the corporate income tax equal to 10.7% of the company’s corporate tax liability which was planned to apply only until fiscal years ended on or before 30 December 2015. By the amended finance law for 2014, the date had been extended to 30 December 2016. In the proposed Finance Bill 2016 the Minister of Finance has confirmed that the surtax will be eliminated at the end of 2016. As a result the maximum effective corporate tax rate will decrease from 38% to 34.43%.

According to the proposed bill the annual simplified disclosure will have to be made electronically.  Large companies are obliged to provide full contemporaneous transfer pricing documentation to the French tax authorities in the first day of a tax audit. Additionally, such companies are also required to submit simplified transfer pricing documentation within six months of filing the tax return for the relevant assessment year.

Taxpayers with income exceeding EUR40,000 will be obliged to file personal income tax returns online. This threshold will reduce to EUR28,000 in 2017 and to EUR15,000 in 2018. From 2019 this procedure will become compulsory for all taxpayers.

Also the Bill proposes to change the definition of the threshold for micro-enterprises. From now on a micro-enterprise will be defined for this purpose as a company with no more than eleven employees and a turnover not exceeding EUR2m.

The VAT registration threshold for distance selling will be lowered from EUR100,000 to EUR35,000, from January 1, 2016.