The Wealth Tax, (“ISF” in French), is an applied tax on the wealth of “rich” people. The political philosophy behind this taxation is to increase the contribution of people who are at the end of their professional career and thus no longer generate any taxable income sufficient for the needs of the state budget. The ISF is applicable in Latin countries such as Italy, Spain and Greece.
It has always been a symbolic political issue in terms of prioritizing social justice over the result of individual merits. It is the subject of endless debate and successive governments have added various amendments to the calculation formula to reflect the current political trend.
Let’s have a little look at French history: In 1981, under François Mitterrand’s presidency, a simple calculation was established: the value of the estate x a certain % (based on the value of the estate) = Wealth Tax rate. Since then, many amendments have been made:
- A list of exempt goods was introduced to preserve certain special interests (antiques of French works of art, large landowners in the name of protecting historical monuments, etc.)
- All goods with a professional purpose are exempt, in order to encourage entrepreneurship
- A limit of 50% of income subject to income tax has been set up: it is the theory of the “fiscal shield” voted during the term of a Republican President (N. Sarkozy)
- His successor (F. Hollande) increased this limit to 75%.
- Today, you can decrease the ISF payable if you invest in French start-ups.
We have partners who can help you to invest in French start-ups and thereby reduce your Wealth Tax. You will become an entrepreneur in France! Welcome to the club! Please be aware of the following:
• The deadline for all formalities is 30th June 2018 and the tax reduction is only possible if the investment in the start-up is recognised in advance.
• Realistically it takes 1 month to complete this capital infusion
Our advisory role: At Maupard, we can link our clients with our financial partners (approved by the French State) to reduce your Wealth Tax.
These financial partners are responsible for searching quality startups and invest on your behalf in new French companies. At the end of the operation, those partners will issue a certificate to support your tax reduction.