A new business tax French President Nicolas Sarkozy announced yesterday will affect about 100 businesses and not just the companies in the benchmark CAC 40 index he initially implied, his spokeswoman said.
Sarkozy, who faces re-election in April, announced on a television talk show that he’ll create a new levy to ensure large French companies pay a minimum amount of tax.
His spokeswoman, Nathalie Kosciusko-Morizet said at a press conference in Paris today that the tax would apply to any company headquartered in France with a capitalization of more than 1 billion euros ($1.3 billion).
She said only about half the members of the CAC 40 pay any income tax in France because of various loopholes and foreign tax treaties, and that those that do pay contribute a total of between 3 billion euros and 4 billion euros a year to the country’s tax revenue. She didn’t have those statistics for all 100 companies that could be affected.
The goal of the new tax is to raise an additional 2 billion euros to 3 billion euros a year.
“Working on the tax rate doesn’t do any good; it’s working on the tax base that matters,” Kosciusko-Morizet said.
The tax will initially be levied on worldwide revenue. Once the necessary treaties with other countries are in place, it will be levied on worldwide profit, she said.