Projet de loi de finances (PLF) pour 2023 - À retenir pour les particuliers et les entreprises

On Monday, 26 September, Bruno Le Maire, Minister of the Economy, Finance, and Industrial and Digital Sovereignty, and Gabriel Attal, Minister of Public Accounts, presented the 2023 Finance Bill. Our Tax team reviews the measures individuals and corporations should bear in mind.

The measures provided for in the 2023 Finance Bill aim primarily to limit the impact of inflation on households and encourage the use of renewable energies.

The income tax scale for 2022 revenues to be indexed on inflation (article 2 of the PLF)

As every year, but more specifically for 2022, in order to limit the impact of inflation on household tax levels, it is intended that income tax brackets should be indexed on the consumer price index, representing an increase of 5.4%:

– 11% bracket: €10,777 instead of €10,225;

– 30% bracket: €27,478 instead of €26,070;

– 41% bracket: €78,570 instead of €74,545; and

– 45% bracket: €168,994 instead of €160,336.

This indexation should represent a loss for the State of around 6.2 billion euros.

Suppression of the CVAE (Company Value-Added Contribution) (article 5 of the PLF)

Despite the 2021 Finance Act, which cut the CVAE rate in half, production taxes in France remain among the highest in Europe and harm its attractiveness. Furthermore, this tax penalises companies that need to renew their production tools regularly.

The Finance Bill therefore provides for the two-step termination of the CVAE:

– Reduction by half in 2023; and

– Final elimination in 2024.

What is more, the cap on the CET (territorial economic contribution), based on company added value, becomes exclusively the CFE (corporate property tax) cap and will be cut to 1.625% in 2023 and 1.25% in 2024.

Regional and local authorities, whose resources will diminish as a result, will be allocated a fraction of the VAT collected.

Prolongation of the reduction of excise duties on electricity (article 6 of the PLF)

In order to extend the tax component of the price shield, the government wishes to maintain excise rights at the minimum levels allowed under European law, i.e. €1/MWh for households and €0.5/MWh for companies.

The price shield’s effects should be amplified as of 1 February 2023, with the integration of the municipal tax on end-user electricity consumption into excise duties, allowing a reduction in electricity tax by €6.76/MWh for households and €2.25/MWh for SMEs.

Adaptation of the tax system to energy transition requirements (article 7 of the PLF)

This article provides for several measures:

– the extension of the mechanism for tax deferment on financial support provided for in article 42 septies of the French CGI (general tax code) to amounts paid by companies relative to energy efficiency certificates;

– the updating and rationalisation of the scope of application of the reduced VAT rate of 5.5 % to energy retrofit works in homes as well as to fitting, installation and maintenance works on recharging infrastructure for electric vehicles in housing;

– the updating of energy performance and environmental quality criteria required for the extension from 15 to 20 years of the duration of exemption from TFPB (real estate tax on developed property) for social housing construction, as well as the prorogation, until 31 December 2026, of a ten-year extension of the exemption from TFPB for social housing construction and acquisition that has benefitted from subsidies or an assisted loan;

– the adaptation of the development tax to the struggle against soil artificialisation and urban spread;

– the increase of reduced excise prices on carbon-related energies by €3.2 /MWh over a two-year period, as of 2024;

– the adjustment of the tax credit that lending institutions and finance companies benefit from in return for granting a zero-interest loan to individuals and companies for the acquisition of a low emission light-duty vehicle, providing such individuals or companies meet resource and domiciliation conditions (“PTZ mobilités” – zero interest mobility loan).

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