A LAW that aims to save businesses almost €12bn a year in tax is one step closer to being passed after it was completely rewritten in parliament.
The part of the 2010 finance bill that would scrap the taxe professionnelle in the New Year was approved by the Senate’s finance committee yesterday.
It is proposed that the levy will be replaced by a new system of local taxation for businesses, raising money for departmental councils and local communes.
The new tax, called the cotisation locale d’activité, will be calculated based on a combination of property rental values, similar to the way in which residential taxes are currently fixed, and turnover.
Nicolas Sarkozy first announced plans to scrap the taxe professionnelle in February and replace it with a different system.
The move is designed to help businesses struggling in the economic crisis and could save them in the region of €11.7bn next year.
The taxe professionnelle is currently paid by most businesses as a percentage of turnover and capital investments and is a major source of funds for local government.
There are exemptions for farms, the press, family-run artisan businesses and some teaching, artistic, intellectual or sporting activities.