The French far-left party, La France Insoumise (LFI), along with their allies on the left, have successfully pushed for the approval of a tax on the “superprofits” of large corporations in the finance committee. They believe that this tax could generate 15 billion euros and is aimed at making those who have benefitted disproportionately from the crises, such as the Covid and energy crises, contribute to national solidarity. The tax would apply to companies with over 750 million euros in revenue and would target profits exceeding 1.25 times the average annual profits from 2017-2019.
The amendment introducing this tax on superprofits will be subject to a new vote next week when the revenue part of the 2025 State budget is examined in the parliamentary chamber. The additional taxation on excess profits will be calculated in three tiers, with rates of 20%, 25%, and 33%. The aim is to ensure that large companies making substantial profits, such as gas companies earning over 10 billion euros in the first semester, contribute to the collective effort. The opposition party, Républicains (LR), expressed concerns about the potential negative impact on businesses and the risk of companies leaving the country.
In addition to the tax on superprofits, the finance committee also approved measures to reduce the research tax credit (CIR), a tax incentive for businesses introduced during François Hollande’s presidency. Some on the left criticize the cost of the CIR compared to its effectiveness in supporting growth and employment. Proposed amendments seek to transform the CIR into a tax reduction for large companies, with eligibility tied to profitability. Another amendment aims to exclude financial and insurance companies from the CIR, potentially saving 1.5 billion euros.
The committee also approved increases in local taxes, including raising the tax on second homes by allowing all municipalities to apply a surcharge of up to 60%. Local governments will also be able to raise the tax on development permits and extend the tax on commercial surfaces to large warehouses, specifically targeting the online e-commerce sector. However, an exemption from property tax on agricultural land beyond what the government had proposed was supported by the committee.
With over 400 amendments still to be reviewed, debates in the parliamentary chamber are set to begin on Monday. The focus remains on ensuring that the tax measures, including the tax on superprofits and changes to the CIR, strike a balance between generating revenue for the government and ensuring that businesses, particularly those in the productive sectors, are not unduly burdened. The outcome of these debates will determine the future fiscal landscape in France and the extent to which large corporations are required to contribute to national solidarity and economic recovery efforts.
