The French Senate has recently adopted during a first reading the country’s 2011 supplementary finance bill, providing for the reform of the taxation of wealth in France.
The main aim of the bill is to reform the existing solidarity tax currently imposed on wealth (l’impôt de solidarité sur la fortune - ISF) in France and to abolish the tax shield mechanism (bouclier fiscal), limiting direct taxation to 50% of income. Both aspects of the reform have now been adopted by the Senate and the National Assembly.
In accordance with the new provisions contained in the bill, taxpayers in France will in future be subject to the solidarity wealth tax on wealth in excess of EUR 1.3m.
The text also provides for changes to the ISF tax scale.
This currently ranges from 0.55% to 1.80%. From 2012, the ISF tax on wealth will comprise of only two tax brackets : a 0.25% tax rate imposed on individuals with net taxable wealth in excess of EUR 1.3m and a 0.5% tax rate levied on individuals with net taxable assets above EUR 3m.
A joint committee (une commission mixte paritaire - CMP), tasked with examining the provisions in the text still under discussion, will bring together senators and deputies on June 29.
The definitive adoption of the government’s bill is expected at the beginning of July.