France Intends To Quit Its 30% Exit Tax In 2019

President Macron of France indicated in an interview for Forbes the planning to attract foreign investment and boost business by abolishing the French exit tax. The policy is expected to be landed in 2019.

Suppress the Exit Tax

Exit tax acts as a road-block for investors moving out of the territory if a certain threshold is past. Macron called it “a negative message to entrepreneurs in France” for investors. He pointed out that the tax created a big road-block for French startups, because a lot of them in the past decided to launch their projects abroad in order to avoid the exit tax, as they considered France to be less attractive. Thus, the tax will be reduced next year. But the President did not refer to the compliance with the Union law, in particular, the Anti-Tax Avoidance Directive, which explicitly embeds the exit tax.

Message Sent by France

Apart from scrapping the exit tax, there are three levels proposed by Macron to ease the burden for taxpayers: i) to decrease corporate tax rate by seven points to 25%; ii) suppressing the employee tax to pay before recruitment and cutting a lot of small taxes; iii) simplifying the tax system. The president wanted to send to foreign investors the message that France is “decreasing the corporate tax, simplifying everything, bringing more flexibility to the labour market and that it is accelerating the transformation of the French economy.”

Sources: Forbes, Reuters

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