Taxation in France

Despite a downward trend registered since 1999, the tax burden in 2022 (46,1% of GDP) remains at a high level, both historically and in comparison with other countries.

Some other taxes, based on personal income, are allocated to social agencies and do not give taxpayers the right to benefit from them.

These taxes, collected by public administrations or by the institutions of the EU, apply to the production and the consumption of goods and of services.

In 2022, taxes on production paid by companies represented 3.3% of GDP in France, compared with an average of 1.5% for the eurozone and 1.7% for the European Union.

It is a proportional tax on output collected by the companies and ultimately completely supported by the final buyer, i.e. the consumer, since it is included in the price of goods or services.

[1] The taxe intérieure de consommation sur les produits énergétiques (TICPE) applies to petroleum products and biofuels according to fixed rates provided by the legislation.

It applies only in metropolitan France – in the overseas territories, there is a special consumption tax (TSC) on premium unleaded and diesel.

In the face of the rise in oil prices, a reduction in the rate of the TIPP for fuel sold to consumers was adopted by the Parliament in 2006.

They mainly apply to the sale of buildings (in addition to local taxes), inheritance and gifts, assignment of businesses and registration of vehicles.

The tax base includes all property, rights and values that constitute the wealth of taxpayers at 1 January of the relevant tax year (buildings built or not, individual businesses, farms, movable furniture, financial investments, debts owed to you, automobiles, aircraft, pleasure boats, ...).

Individuals resident in France are entitled to a deduction of 30% against the value of their main home for wealth tax purposes.

Many people on the political left consider it a symbol of solidarity, while many on the right argue that it encourages entrepreneurs to leave France.

In France, unmarried couples (regardless of gender) can enter into a PACS (Pacte Civil de Solidarite) agreement.

The tax is calculated for each "fiscal household", i.e. the family unit composed of either a single person, or two partners and their children or other dependents.

The 2023 budget law introduces a number of personal tax measures and measures to help households meet rising energy spending such as a support schemes to cope with rising energy prices (limitation of the rate increases of gas an electricity and a fuel allowance of € 100 will be paid to the 10 million most modest workers who use their vehicle to go to work) and an aid for the ecological transition (an aid for the purchase of bicycles is renewed and increased in 2023, MaPrimeRénov' Serenity is strengthened and the One noNew social leasing scheme) The contribution exceptionnelle sur les hauts revenus is a temporary tax introduced in 2012 by François Fillon as a measure to curb the budget deficit.

The proposed tax was subsequently modified after being rejected by the Council of State[6] and was implemented in 2014 in its current form and will be discontinued as of January 2015.

The social security system in France is based on a principle of solidarity, where some pay more in contributions than they receive in benefits, to support those who are less well-off.

Established by the Finance Act 1991, the general social contribution (CSG) is payable by individuals living in France and who benefit from the compulsory health insurance.

Revenues from the CSG are allocated to social security budget, specifically to the National Family Allowance, the Solidarity Fund pension schemes and insurance.

Indeed, unlike the social contributions that give those who pay a right to benefit from them, the CSG, is levied without direct compensation (like any other tax).

Various exemptions are provided (activities performed by the State, local authorities and public institutions, business and agricultural organizations, etc.).

The amount of business tax is calculated by multiplying the taxable net by the rates approved by each local beneficiaries.

The deficit of local administrations is still limited, but amounted to €10bn in 2023, as a result of a spending growth significantly higher than that of the revenue in the recent years.

Although deficits have been commonplace, efforts have been made in recent years to cut back the growth of taxes and government spending.

As for the growth of the revenues for the benefit of local administrations, it is only due to the devolution, begun with the 1992 laws, and continued with the reforms in 2003.

Whereas taxation aimed at assuring "the maintenance of the public force" and "the expenditures of the administrations"(Déclaration des droits de l'homme et du citoyen de 1789), taxation is now aiming at assuring efficient public services and a fair distribution of the wealth and the income.

[citation needed] Historically, most taxes have been paid either or in shares of harvest (dime and champart) or work (corvée, military service).

The system was convenient for both the state (the revenue was anticipated and it was disposed of the unpopularity of tax collectors) and for big farmers (the bargain was very profitable).

The dixième, created in 1710, applied to all the income from any ownership (land, real estate, annuities), at a rate of 10% (dixieme meaning tenth).

planned to establish a fair proportional contribution and made these changes official in the Declaration of Human Rights and the Citizen of 1789.