RFP
Find a firm
Become a member
Member log in
France pledges EUR345bn to support its economy through the pandemic crisis
The French government has detailed the steps it is taking to help deal with coronavirus crisis and support employment
With the French economy predicted to contract by 1% following the outbreak of coronavirus, a series of special measures are being taken by the country’s leaders.
Under the new rules some social contributions and tax payments can be postponed without the need to provide any justification.
For example, companies can postpone for three months, without penalty, payment of corporation income tax, payroll taxes, business tax (Contribution sur la Valeur Ajoutée des Entreprises – CVAE) and property taxes.
In practice, companies need to file a request using specific forms available on the French government’s website (impots.gouv.fr).
It is also possible to request a reimbursement where payments have already been made in March. However, VAT and similar taxes are excluded from the measure.
Specific tax rebates can be granted in case of serious financial difficulties due to the virus outbreak, but only in the event that deferred payment will not help. Any request for direct tax rebates must be supported by proper documentation.
Rebates will be considered on an individual basis after a thorough examination of the taxpayer’s situation and the request must be made using a specific form posted on the government website.
Support for firms in financial difficulties
The French government has announced an ambitious plan to support companies until the end of the year. In practice, businesses facing financial difficulties can request a loan from their bank which will be guaranteed by the French government.
Subject to conditions, BPIfrance, the French public bank, has committed to grant ‘special’ loans, secured by no collaterals, of up to EUR5m to SMEs and up to EUR30m to ETIs (Intermediate-sized companies). These loans would provide that capital reimbursements can be postponed for 12 months.
Accelerated reimbursement of tax credits
Companies can accelerate the reimbursement of tax credits such as those relating to VAT, research tax credit (CIR), innovation tax credit (CII) and tax credit for employment and competitiveness (CICE).
It is also possible to obtain early repayment of excess corporate income tax paid for 2019, without waiting until May 2020.
Partial activity scheme
Companies affected by a reduction in their commercial activities are, under certain conditions, eligible for reduction of working hours.
The government has also announced a new and ambitious Temporary Emergency plan that will cover 100% of the compensation paid to employees, up to 4.5 times the French national minimum wage. Companies have until 15 April to declare their intention to benefit from this scheme.
Other measures
Measures to support the self-employed have been announced. They would be able to modulate the rate and the monthly instalments of the income tax (prélèvement à la source or ‘PAS’). Likewise, the self-employed can defer the payment of the PAS to the following month.
On top of that, all the current tax audits are suspended and no further audits will be initiated. Similarly, forced tax assessments should be adjusted.
The filing of tax returns, initially scheduled on 5th may, would be postponed until 31 May 2020, to be confirmed.
All in all, the French government has announced that it will spend EUR45bn euros to support the economy, and EUR300bn euros to provide financial guarantees to prevent companies filing for bankruptcy.
However, it is uncertain how this support will actually be financed, other than through quantitative easing.
For more information, contact:
Benoît Dambre
Sefico Nexia Avocats, France
E: b.dambre@sefico-nexia.com
T: +33 (0) 1 76 52 20 31
W: https://www.sefico-nexia.com/
For details of the announcements in French click here.
,