According to calculations by the NGO Oxfam, the various tax loopholes and inheritance tax exemptions would cost the State more than 160 billion euros over the next 30 years. An unprecedented report published this Tuesday, September 17.
The top 0.1% of heirs pay on average only 10% in inheritance tax, denounces the NGO Oxfam in a report published on Tuesday, September 17. “At present, no study has been able to exhaustively analyze all the inheritance tax loopholes, as they are so numerous and their effects are so considerable,” explains the NGO.
Oxfam points out in particular the Dutreil pact, “a major Source of tax avoidance”. The NGO points out that it allows, under certain conditions, to exempt up to 75% of the tax cost of transferring shares or stocks in companies within a family framework.
The report highlights that the cost of this tax loophole for public finances is underestimated by the State. The latter puts it at 500,000 euros per year while the Economic Analysis Council is counting on 3 billion.
160 billion loss for the State
Oxfam also reports that the “current system favors the wealthiest,” as they manage to pass on more than half a million every 15 years to their heirs without paying any tax. The NGO points out that “7 of the 9 French people who will become billionaires in 2024 are super-heirs.”
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Taking this data and compiling it with the current fortune of the 25 French billionaires over 70, Oxfam calculates that the state coffers could be reduced by more than 160 billion euros due to its numerous tax loopholes and exemptions.
“We have calculated that in the next 30 years, 25 French billionaires will pass on to their heirs more than 460 billion euros in super-inheritances,” says Layla Abdelké Yakoub, Head of Advocacy for Tax Justice and Inequality at Oxfam France.
“Our current inheritance tax system is extremely opaque and, above all, deeply unfair,” she insists. The NGO also points out major disparities depending on family ties.
Targeting the “highest legacies”
Direct lines (parents-children or grandparents-children) benefit from a tax rate of 5% and a tax allowance of 100,000 euros. Conversely, an inheritance from an aunt, for example, is taxed at 55% and the tax allowance falls to less than 8,000 euros.
Taking up the formula of “social justice” used by Michel Barnier, the NGO calls on the new government to carry out a “tax reform targeting the highest inheritances” in order to make it “clearer, more readable and transparent”. Oxfam is calling for the establishment of a more progressive scale” and the end of “useless exemptions and tax loopholes”.
