Macron vows to end French 'exit tax'

General image of euro currency notes

President insists tax introduced in 2012 discourages start-up businesses

President Emmanuel Macron has promised to scrap the so-called 'exit tax' which targets entrepreneurs who emigrate to countries with more advantageous capital gains regimes before selling their French businesses. It is based on 'unrealised capital gains' on the day before departure.

Pointing out that the tax did little for government coffers, Mr Macron said that it discouraged startups "because it means that beyond a certain threshold, you are penalised if you leave" in an interview with Forbes magazine.

The exit tax brought in €70million in 2017, much lower than the €200million a year predicted when it was introduced by former president Nicolas Sarkozy in 2012. 

"The exit tax sends a negative message to entrepreneurs in France, more than to investors," Mr Macron said.

“People are free to invest where they want. If you want to get married, you should not explain to your partner, ‘If you marry me, you will not be free to divorce,’” Macron said.

However opponents said that the announcement provided further evidence that Mr Macron was a 'president for the rich'.

Mr Macron and his government are pushing through a range of social and economic reforms to re-shape the French economy and restore France’s image among investors. Since he entered the Elysée, his government has scrapped the wealth tax on everything but property and created a "flat tax" of 30% on all financial income, including dividends.

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