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News > Archived News > CIAT News > France - Economic Modernization Act regulated.
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Home | Use and Privacy Terms and Conditions | Site map | Contact Us | Frequently Asked Questions France - Economic Modernization Act regulated.
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October 28, 2008 - The French Parliament passed the final text of the Economic
Object 1
Modernization Act last July. The regulatory measures for this act, which came into force on August 6, 2008, will be adopted by the end of the year, with full effectiveness of the act early in Q1 2009. The Economic Modernization Act is part of the general reform movement adopted by the Government, and sets forth structural reforms to deeply modernize the economy. The rule has two main objectives: "more companies and more competition", and four main development cores: -
mobilizing mobilizing mobilizing
competition the
businesspeople; as
attraction
a ability
driver to
of promote
growth; growth;
- mobilizing growth financing. Tax-relevant measures include: - the creation of the "self-businessperson" Statute. Applicable to companies with annual revenues lower than 32,000 euros in services and 80,000 euros in trade. It provides the option for a single payment for income taxation and corporate tax (23% of revenues from services and 13% from trade). They will also benefit from a permanent VAT exemption and a temporary three-year exemption as from its creation on the local professional tax. - Measures to facilitate business transfers. Transfer rights of goodwill and holdings in limited companies are reduced from 5% to 3%. In some cases, a total exemption is set forth, in the event of acquisition by the seller’s employees or family members, for a value lower than or equal to 300,000 euros, provided certain requirements related to holdings in the capital stock are fulfilled. Deductibility of interest on acquisition-related loans is enlarged, duplicating the maximum interest limit (up to 20,000 for individual taxation, and up to 40,000 for joint taxation) chosen to determine income tax reduction. The website http://www.modernisationeconomie.fr/ presents specific cases to illustrate the main measures in the Act and describes the regulatory and practical development thereof (current applicable decrees of the State Council; practical information,…) Mrs. Josiane Lanteri Correspondent
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