The effect of wealth tax in France has exceeded all the expectations

26.01.2012 According to recent reports of French specialists the effect of introduced in summer 2011 on the state territory wealth tax - l'impôt de solidarité sur la fortune - has brought unexpected result. The total amount of the budget revenue, which was "provided" by this tax was in 2011 4.3 bln. euro. This is in 60 mln. euro more than previously predicted by experts.

Now the French government plans to change the existing rate of tax on wealth: to set the 0.25% rate for individuals whose income exceeds 1.3 mln. euro per year and 0.5% for those whose annual income exceeds 3 mln. Euro. Let’s recall that in 2011 these rates were respectively 0.55% and 1.8%.

In spite of reduction of tax rates on wealth, experts say that there will be no negative impact on the state budget.

Expert’s opinion

“The positive legislative experience of France in tax reform can be a good example for all the countries experiencing negative effects of the crisis. The replenishment of the national budget for 60 mln. euro more than expected only with a tax on wealth - is a very good indicator.

In light of the fact that Russia is also considering the introduction of this mandatory payment on its territory, legislators should carefully analyze a similar successful tax mechanism in France”.

On the basis: www.tax-news.com

Andrianova Irina ( the leading lawyer of legal support and banking consulting department of Honest&Bright)