French proclaim their low corporate tax rate
The French state agency with responsibility for attracting foreign investment is advertising the fact that the French Government’s ambitious tax-cutting policies have made France’s corporate tax regime “just as competitive” as countries such as Ireland.
They are now promoting the fact the France’s effective rate at just 8.2 per cent, which is way lower than Ireland.
The French Agency for International Investment – the French “IDA” has cited the recent study by the World Bank and Price Waterhouse Coopers which has calculated the French effective corporate tax rate to be 8.2%, which is very considerably lower than its nominal rate of 33.3%.
KPMG say that for the past five years, France has been chasing an ambitious policy to reduce corporation tax and they have produced a corporate tax system that has become every bit as competitive as in other European countries.”
The president of France, Nicolas Sarkozy, has been trying to force Ireland to raise its corporate tax rate from 12.5% in return for a reduced interest rate on loans.
As we have been denied the interest rate cut to date, Ireland should reduce the corporation tax rate to below the French rate to show Mr. Sarkozy the truth of the French position.
Minister for Finance Michael Noonan now believes that France’s effective corporate tax rate could be as low as 8.1 per cent due to its generous credits and allowances.
France offers a wide range of tax breaks and incentives to companies, including credits for hiring older workers and setting up in a poor region. By far the most significant incentive is a research and development tax credit of 30 per cent, which, the French say is the most generous in the world!
So if you get want a lower tax rate and higher Research and Development tax credits in France than anywhere else, why is Mr Sarkozy so afraid of Ireland!