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French recent tax reform: the survival kit | Practical Law - multi-jurisdictional guide 2012/13


France is in the process of changing its tax landscape and now faces the tax reforms promised by President Hollande in his 2012 presidential election campaign. There is an increasing atmosphere of tax insecurity and on 28 September 2012 the new draft of the 2013 Finance Bill was released to practitioners and tax payers. The Finance Bill was finally adopted on 20 December 2012. It gave rise to a decision of the Constitutional Council (Conseil Constitutionnel) (CC) dated 29 December 2012 (n° 2012-662) which struck down numerous of its provisions including the 75% millionaire tax. The third amended Finance Bill for 2012 was adopted on 19 December 2012 and was also reviewed by the CC (decision n° 2012-661 of 29 December 2012).

While seeking to reduce the state deficit to 3% (the level required for Eurozone members), the Government must find approximately EUR30 billion of savings or additional income. Two thirds of this targeted amount will come from tax increases, of which EUR10 billion will be aimed at individual taxpayers (and, according to the Government, more specifically the wealthiest of those). Only a third of this amount will be derived from spending cuts. At the time of writing, reactions to the decisions of the CC have yet to be proposed by the Government and voted by the Parliament. Against this background, this article describes the main tax changes from 2012 on and methods on how to prepare and to respond to the tax increases. Notably, for foreign persons and non-residents, the Bill will apply retrospectively as from 1 January 2012 (subject to highlighted exceptions).


  • Increases to taxation aimed at individuals
  • Methods to reduce tax liability
  • Summary of french tax reforms to individual income
French recent tax reform: the survival kit


Picture of Michel Collet
Michel Collet
Picture of Pierre-Jean Douvier
Pierre-Jean Douvier