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22 may 2015

The tax burden penalises the funding of economy

 

In France, corporate financing is being hurt by the increased tax burden on the banking industry. The removal of the deduction for the Systemic Risk Tax and contributions paid by banks to the Single Resolution Fund (SRF) from corporate tax imposed by the amended finance law for 2014 will lead to an extra cost of €900 million for the next three years.


This amount is on top of the numerous contributions made by the banks to the State budget, whether it relates to fiscal and social charges paid by all companies or specific taxes for the banking sector such as payroll tax, the systemic risk tax, the contributions for the running of the French Prudential Supervision and Resolution Authority (ACPR) and the French Securities Regulator (AMF) or the European supervisory authorities. As this does not exist overseas, the payroll tax represents a significant burden which penalizes the competitiveness of the banking sector and employment. In 2013 the payroll tax amounted to almost 2 billion euros, with the total contribution of banks to the State budget coming in at 14 billion euros.


The effective take rate of net income before tax for the banking sector (excluding social charges) stood at 54% for the period 2011-2013.



Overall rate of tax for the finance sector

* Total amount of tax (including employers social security contributions) / added value

Source : PwC, 2013 (average rates 2006-2010)

 
 
 
FBF |  Tax
 
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