Millionaires' 75% tax rate approved

24 other measures in finance bill are rejected - including proposed cap on wealth tax

30 December 2013

FRANCE'S constitutional watchdog has given approval to President Hollande's signature policy introducing a 75% income tax rate for France's highest earners.

The measure, which applies to salaries over €1million and has proved particularly controversial among French football clubs, features in the 2014 finance law which parliament approved before the Christmas break.

In its revised form, the 75% levy will be paid by employers - after the first draft of the law was struck down because it applied to individuals' tax returns and was considered unfair.

Out of the 236 clauses included in this year's finance bill, 24 have been thrown out by the conseil constitutionnel, which checks that French laws comply with the constitution.

Other measures not making the final law include planned changes to capital gains tax on the sale of land for building (which was to have had reductions for length of ownership removed this year) and a proposed 75% levy on profits made from shares in tax havens.

A 50% exemption on inheritance tax on properties in Corsica was also thrown out for being against French constitutional principles.

The conseil constitutionnel did, however, approve a measure reducing the amount of money that can be saved in income tax through the quotient familial system, which allocates a number of "parts" to families depending on their size.

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