The contrast is striking. Donald Trump wants to promote Made in America by lowering taxes on companies producing in the United States from 21% to 15% and raising customs duties on imports. Beijing supports Made in China by subsidizing some of its champions. Berlin promotes the quality of Made in Germany… Everyone defends the interests of their companies… except France.
To complete its 2025 budget, the government is seeking to surcharge companies for two years, targeting those with the most activities, factories, employees and therefore profits in France. The objective is to obtain 8 billion euros in revenue next year and another 4 billion the following year.
451 actors concerned
Concretely, the finance bill plans in 2025 to increase the corporate tax rate from 25% to 30.15% for companies with a turnover in France of between 1 and 3 billion euros. This rate rises to 35.3% for companies generating more than 3 billion euros of activities in France. Intended to be temporary, this surcharge will still apply in 2026 with a rate reduced to 27.65% in the first case and to 30.15% in the second. The newspaper “Les Échos” has identified the companies that will be hardest hit and estimated the impact of such a measure in 2025.
This additional tax will affect, among the 451 players concerned, particularly the luxury sectors (up to 750 million euros for LVMH and 300 million for Hermès), aeronautics (330 million for Safran and 300 million for Airbus), energy (500 million for EDF, 150 million for Engie), construction (400 million for Vinci, 158 million for Eiffage, 110 million for Bouygues) or even the bank (400 million for Crédit Mutuel, 200 million for Crédit Agricole). On the contrary, the large French groups which achieve little turnover and therefore few profits in France, such as TotalEnergies, are less affected by this surcharge.
An alarming finding
It is obvious that such a political choice raises questions. Firstly because, if the government is talking about a temporary surcharge for two years, it has already happened that a temporary tax lasts. Created in 1996, the contribution for the repayment of the social debt (CRDS) was planned for thirteen years. But it will last at least thirty-seven years! This tax at a rate of 0.5%, levied on most personal income, was intended, as its name suggests, to absorb the Social Security debt. It is now used to cover our Covid debt, at least until 2033, or even 2042, assure the public authorities.
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Then, this decision does not encourage companies to invest in France and develop there. The finding is, however, alarming. Between 1995 and 2015, nearly half of factories and a third of industrial jobs disappeared across the country. Over a longer period, same analysis. The share of the manufacturing sector in French GDP fell from 23% in 1970 to 10% in 2021. A national revival had since given rise to hope. Reindustrialization was underway. It will not take place.
The Cac 40 fell 9% while Wall Street jumped 10%
Tomorrow, stricter taxation on companies present in France will encourage relocations. It will encourage managers to look for more profitable growth sources internationally. Financial investors did not wait. They started to leave France. following the election of Donald Trump on November 5 and the prospect of lower taxes in the United States, Wall Street gained 2% and the Cac 40 lost 2%.
Since the announcement of the dissolution of the National Assembly on June 9, and the strong fiscal uncertainty that followed in France, the gap is more severe. The Cac 40 fell 9% while Wall Street jumped 10%. The Paris market is even doing less well than the German, English or Italian Stock Exchange.
This government measure creates a glaring injustice by penalizing the most responsible French companies. It will leave traces. There is an urgent need to save Made in France.
France
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