It was reported on 11 September 2012 that, determined to ensure that the measure does not lead to a massive exodus of top executives, the French government now plans to soften conditions for its 75% tax on top earners, although the final decisions have not as yet been made.
Reports indicate that the 75% tax will only apply to income from work. Income derived from capital, notably from the sale of shares, property, dividends and interest, would then be exempt from the levy. If this is indeed the case, it would be a huge relief for entrepreneurs in France, as it would mean that capital gains from the sale of a company would not be subject to the tax.
Further softening the blow, and to ensure that the tax is not confiscatory in the eyes of the Constitutional Court, it is said that the 75% tax will not now take the form of an additional income tax rate (IR), but will instead be introduced as surtax.
It is said that the tax will be imposed on individuals with annual income in excess of EUR1m, and on couples or a family with household income in excess of EUR2m a year, although no tax breaks would be accorded for children.
