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Fiscalité | Loi de finances 2021 et mesures d'aides aux entreprises et aux particuliers

The finance act for 2021 includes many interesting measures, notably for individuals and companies affected by the economic consequences of the health crisis.

We wished to share some of these measures with you.

1. Measures applicable to businesses

1.1 The incentive to grant rent renunciations

A tax credit has been introduced for the benefit of lessors (individuals French tax resident or legal entities governed by private and public law) who grant, before December 31, 2021, rent renunciations for the month of November 2020 to corporate tenants affected by the consequences of restrictive measures due to the health crisis.

To be eligible for this tax credit, rent renunciations must be granted to companies that :

– Are tenants of premises that have been forbidden from receiving members of the public during November 2020 or whose main activity, in particular, falls within one of the following sectors: the hospitality industry, catering, tourism, events, sport or culture (sectors mentioned in annexe 1 of decree 2020-371);
– Employ less than 5,000 employees;
– Are not subject to collective proceedings on December 31, 2019.

When the tenant company employs fewer than 250 employees, the lessor will receive a tax credit equal to 50 % of the sums abandoned.

When the tenant company employs between 250 and 5,000 employees, the lessor will receive a tax credit equal to 50 % of the the sums abandoned, up to a maximum of 2/3 of the amount due in rent.

The total sum of rent waivers or renunciations, that will be used to determine the amount of the tax credit, is capped at €800,000 per tenant company.

1.2 Free revaluation of assets held by companies

To allow companies to reinforce their equity, an optional measure was put in place as of the financial year ending 31 December 2020 and will continue up to the financial year ending 31 December 2022. This measure will allow for easier revaluation of all tangible and financial assets by deferring the tax impact of these revaluations.

In principle, a revaluation difference, which would have the consequence of increasing the company’s net assets, constitutes an immediately taxable gain.

If a company opts for this measure, the revaluation difference will not be taken into account in the financial year’s profits. This difference can be subject to a staggered or to a deferment of taxation depending on whether the re-evaluated assets are depreciable or not.

If the re-evaluated assets are depreciable then the tax payment will be staggered. The revaluation difference will be the object of non-accounting reintegration in equal instalments over the financial year following the one in which the revaluation was made, over 15 years for construction, plantation, layout and development of depreciable land and over 5 years for other fixed assets.

Depreciations or provisions recorded subsequently will be calculated based on re-evaluated values. In the case of the transfer of a depreciable element, the fraction of the revaluation difference that has not yet been reintegrated at that date will be immediately taxable.

The reintegrated earnings will therefore be, in whole or in part, offset by the depreciation of the fixed asset. In the case of non-depreciable fixed assets, the revaluation difference will benefit from tax deferral until the said assets are transferred, on the condition that the company commits to calculating the gain or loss recognised on the subsequent disposal based on the non-re-evaluated value of the asset disposed of.

Provisions established at a later date on non-depreciable fixed assets that were the object of a re-evaluation would be calculated based on non-re-evaluated values.

1.3 Staggering of capital gains realised during lease-back operations

The staggering measure for capital gains realised during a leaseback operation has been implemented again.

Companies that transfer a building to a leasing company for which they immediately recover the use through a leaseback contract are not immediately taxable based on the capital gains on the transfer.

Effectively, the company could opt to stagger by equal parts over the financial years closed during the leaseback contract’s lifetime, without exceeding 15 years.

This measure applies to buildings whose transfer to a leasing company is carried out between 1st January 2021 and 30 June 2023 and is preceded by a funding agreement accepted by the lessee as of 28 September 2020, and at the latest 31 December 2022.

To benefit from this tax staggering, these buildings must be affected by the lessee to his commercial, industrial, artisanal, liberal or agricultural business.

1.4 A few measures in favour of SMEs

– Corporate Tax Rate

As a reminder, the standard corporate tax rate is now 26.5 % for companies whose turnover is below €250M and 27.5 % for the others.

Furthermore, the scope of application for the reduced 15 % corporate tax rate for SMEs has been extended to those whose turnover does not exceed €10M (compared to €7.63M previously), on the provision that the other conditions are respected.

– Tax credit for energy efficiency works on SME premises

A tax credit has been temporarily established for energy efficiency works carried out on SME premises.

SMEs, whether lessees or owners, can benefit from a temporary tax credit for expenditure on energy efficiency works carried out between 1st October 2020 and 31 December 2021 on buildings or parts of buildings for tertiary use, when such expenditure is recorded during the fiscal year when the works take place.

The tax credit is set at 30 % of the actual cost of the eligible expenditure and is capped at €25,000 per company for the duration of the measure.

1.5 CVAE (charge on the added value of enterprises) and capping rate of CET (territorial economic contribution) reduction depending on added value

A decrease of 50% in the CVAE and the capping rate of the CET depending on added value has been enacted.

Hence, the rate of the CVAE goes from 1.5 to 0.75 % and the CET cap goes from 3 to 2 % of taxes due on 2021 revenues.

2. Measures applicable to individuals

2.1 Conservation of the exemption cap set at €1,000 for donations to organisations that help people in need

Donations made by individuals up to and including 31 December 2021 to non-profit organisations that supply free food or healthcare or housing support to people in need or that fight against domestic violence will confer eligibility for an income tax reduction equal to 75 % of the amount of the donations made, up to a maximum of €1,000 (instead of €554).

Donations above €1,000 confer the right to a reduction in an individual’s personal income tax, at a rate of 66% and up to a maximum of 20 % of the taxable income.

2.2 Extension of the increased rate of 25 % for capital subscriptions in certain SMEs

To bolster the capital of SMEs, the French Finance Act for 2021 provides for the one-year deferral of the termination of the period of application of the increased rate of 25 % (compared to the initial rate of 18 %) of income tax reduction for cash subscriptions in the capital of non-listed SMEs, i.e. until 31 December 2021.

The yearly cap on payments that confer the right to an income tax reduction is €50,000 for taxpayers taxed individually and €100,000 for taxpayers taxed as a couple.

We remind you that as this is tax reduction and not a tax credit, any surplus relative to taxes due will neither be reimbursed nor carried over to the following years. On the other hand, if the amount subscribed is above the yearly cap, the surplus can be carried over to the four following years.

New: A law, which provides support for SMEs, drafted to reinforce the Madelin measure, has just been tabled at the Assemblée Nationale. It proposes to increase the reduction rate by 5 points, from 25 % to 30 %. The text also provides for the increase of the yearly investment cap to €75,000 for single, widowed or divorced taxpayers and €150,000 for taxpayers taxed as a couple. To be followed…

2.3 Gradual withdrawal of the 25 % tax surcharge in the case of non-registration with an approved organisation

Not registering with an approved management centre for taxpayers who are part of the direct tax scheme results in a 25 % tax surcharge. This surcharge will be gradually withdrawn over the coming 3 years according to the following timeline:

• Tax surcharge of 1.20 for 2020 revenues,
• Tax surcharge of 1.15 for 2021 revenues,
• Tax surcharge of 1.10 for 2022 revenues,
• Withdrawal of the tax surcharge as of taxes payable on 2023 revenues.

Many other measures have been implemented. Don’t hesitate to contact us to find out more.

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