NAME: GURPREET SINGH MT NO: 7310016

Government Tax Authority Taxes On Income Taxes On Expenditure Taxes On Assests Local Direct Taxes List Of Some Double Tax Treaty Countries The Tax Structure

 In France, taxes are levied by the government, and collected by the public administrations. French "public administrations" are made up of three different institutions. The central government local governments, which include agencies with limited territorial jurisdiction. Social security association (ASSO) private organizations endowed with a mission of public service.

Structure of the taxation in France by sources in 2008

Structure of the taxation by administration.

There are four categories of income tax in France:

CORPORATION TAX. PERSONAL INCOME TAX. SOCIAL LEVIES. PAYROLL TAXES.

Corporation tax is a tax, in principle payable annually, on all profits generated in France by companies and other legal entities The Standard Rate Of 33% For All Their Activities joint-stock and simplified joint-stock corporations (SA and SAS), limited liability companies (SARL), partnerships limited by shares and, in certain cases, cooperative companies. A 3.3% social surcharge also applies when the global corporate income tax charge exceeds EUR 763,000, yielding an overall effective corporate tax rate of 34.43% At The Reduced Rates: Public bodies like public establishments and corporations under local authority control and private bodies like associations and foundations pay taxes on reduce rates . Such bodies are liable to corporation tax under special rules on certain income they derive from their assets (income from real property, agricultural profits, certain investment income). The applicable rate is 24%, or 10% for certain investment income, such as income from bonds. A body that does not carry on an activity for profit but receives income from its assets is liable to corporation tax at the reduced rates

General Rules For Determining Profits companies liable to corporation tax must include all existing receivables and liabilities at the end of a period in the calculation of their taxable profit. Profit liable to corporation tax is determined according to the results of operations of all types carried out by the enterprise, including disposals of assets .The tax base therefore broadly corresponds to the difference between net balance sheet assets at the start and end of the period, minus contributions, plus withdrawals made by members or shareholders during the period. Calculating The Taxable Profit The taxable profit is equal to the difference between the gross operating profit and incidental income, on the one hand, and deductible costs and expenses, on the other hand.

 Business Profits; Professional Profits; Agricultural Profits; Income From Real Property; Wages, Salaries, Pensions And Annuities; Income From Capital Assets; Capital Gains. A. TAXABLE PERSONS Under Article 4 A CGI, individuals domiciled in France are taxable on all their income of French or foreign origin. Persons not domiciled in France are taxable only on their income from French sources. 1 Domicile for tax purposes Tax household rule Under Article 4 B CGI, persons are deemed to be domiciled for tax purposes in France if: Their Home Is In France Their Main Place Of Abode Is In France They Carry On A Professional Activity In France, Salaried Or Not, Unless They Can Prove That It Is A Secondary Activity They Have The Centre Of Their Economic Interests In France. They Live regular More Than 183 Days In France

2 Tax treatment of persons domiciled in France Regardless of their nationality, persons domiciled for tax purposes in France are taxable on their worldwide income 3 Tax treatment of persons not domiciled in France Regardless of their nationality, persons not domiciled in France are taxable in France on their income from French sources only if. Pensions And Annuities
Band of Value Less than 5,963 11,896 26,420 70,830 to to to 2011 5,963 11,896 26,420 70,830 Above all Rate of Tax % 0.0 5.50 14.00 30.00 40.00

Income From Real Property Situated In France Or From Rights Relating To Such Property. Income From Business Concerns Situated In France Including Salaries, In Consideration Of Artistic Or Sporting Performances Given Or Used In France All Income Derived From Industrial Or Commercial Property And Similar Rights
France has higher income tax not attractive for companies and individual

Before applying the above scale rates the total household's taxable income is divided by the number of family shares exp marital status, number of children or dependent.

 GENERAL SOCIAL SECURITY CONTRIBUTION (CSG) The general social security contribution,
which came into force on 1 February 1991, is a levy with a social purpose. The CSG tax base is very wide, since it is levied in principle on earned income, substitution income, income from personal assets and income from investments in fixed-income securities subject to withholding tax or exempt from income tax.

II SOCIAL SECURITY DEBT REPAYMENT CONTRIBUTION (CRDS) The CRDS, which came
into force on 1 February 1996, is intended to clear the deficits of the social security system. Like the CSG, it is payable by individuals who are domiciled in France for tax purposes and, where earned or substitution income is concerned, who contribute in any capacity whatsoever to a French compulsory health insurance scheme.

III - SOCIAL LEVY AND OTHER ADDITIONAL LEVIES Individuals domiciled in France for tax
purposes are liable to a 2% social levy, introduced in 1998, on income from personal assets and investment income. The proceeds are allocated to the old-age solidarity fund, the national retirement pension fund and the pension reserve fund. Act 2008-1249 of 1 December 2008 generalizing the earned-income supplement and reforming integration policies introduced a new 1.1% additional contribution to the 2% social levy on income from personal assets and investment income, intended to fund the earned-income supplement (revenue de solidarities active, RSA)

Base

Social levy on foreign earnings*

CSG(1)

CRDS

PS & extra charges

Total

Investment and rental income property and investment gains (4) (on the net taxable income declared for income tax)

8.20%

0.50%

3.60% (2.2%+ 1.4%)

12.30%

Salaries and unemployment benefits (on 97% of the gross amounts received)

7.50%

0.50%

0.00%

8.00%

Retirement or Disability Pensions taxable in France (2) Foreign salaries Foreign professional earnings (3) 5.50%

6.60%

0.50%

0.00%

7.10%

5.50%

2.40% up to (est.) 34,8229.60% from 34,822 to 174,113

Variable

 The main payroll taxes are the wage tax, the apprenticeship tax and employers' contributions to the development of continuous vocational training and to construction. The wage tax is payable by employers established in France who are not liable to VAT or were not liable to VAT on at least 90% of their previous year's turnover. The taxpayers are mainly banks and insurance companies, the medical and paramedical sector, associations and other nonprofit bodies.

 Taxes on expenditure are levied on household and business consumption and investment. Taxes on expenditure traditionally took the form of indirect consumption duties and customs duties. There are two types of expenditure taxes . Value added tax In order to create a single market between EU Member States, a number of VAT directives have been issued since 1967 which Member States have had to transpose into their domestic law. FRENCH VAT RATES : The standard VAT rate in France is 19.6%. There is a reduced rate of 5.5% for: food & drink; books; passenger transport; and other. There is also a 2.1% VAT rate for goods from chemists and some newspapers. FRENCH VAT REGISTRATION Foreign companies may register in France for VAT without the need to form a local company know as non-resident VAT trading. There is no VAT threshold in France for the registration of non-resident traders a VAT number must be in place before the commencement of taxable supplies. Common scenarios which require a French VAT registration include: Importing goods into France; Organizing live events, conferences etc in France; Holding goods in a warehouse in France as stock for resale longer than 3 months; 'Supply and install' services over 12 months; Selling goods from France to other EU countries; and Distance selling to private individuals, e.g. internet retailing.

 EXCISE DUTY The harmonization relates to energy products, alcoholic products and tobacco products. The new system was transposed into French law as of 1 January 1993 . The alcoholic beverages Beer :Minimum excise duty in EU is 1.87 EUR per hl/degree of alcohol of finished product (Article 6 of Directive 92/84EEC). Wine: The rate in France is 3.40 EUR per hectoliter still wine and 8.40 EUR per hectoliter sparkling wine. Tobacco Cigarettes: The tax rate is 15.97 EUR per 1000 pieces Gasoline Leaded petrol: Minimum excise duty in EU is 421 EUR per 1000 liter. In France is the rate 639.60 EUR per 1000 liter. Unleaded petrol: Minimum excise duty in EU is 359 EUR per 1000 liter. In France is the rate 606.90 EUR per 1000 liter.

There are four kinds of taxes on assets. REGISTRATION DUTIES. Sale Of Real Property: A proportional duty is levied on sales of real property, in principle subject to the combined formality ,it may not be less than 1% or more than 3.6%; Acquisitions made by the State or by its scientific, educational, assistance or charitable establishments or by local authorities are exempt from all transfer duty. Transfers Of Businesses And Similar Transfers Registration Duties To Companies : Companies are liable to registration duties on incorporation, on the occurrence of certain events during their lifetime and on dissolution, and when shareholders sell their shares. Inheritance And Gift Duties Transfers without valuable consideration include transfers following death (inheritance) and transfers without consideration inter vivos (gifts).

Band of Value For gifts made in 2010

Rate of Tax

Band of Value

Rate of Tax

Less than

8,072

%
5.00

Less than 8,072 12,109 15,932 552,324 902,838 1,805,677 to to to to to

8,072 12,109 15,932 552,324 902,838 1,805,677 Upwards

% 5.00 10.00 15.00 20.00 30.00 35.00 40.00

8,072 15,932 31,865 552,324 902,838

to to to to to

15,932 31,865 552,324 902,838 1,805,677

10.00 15.00 20.00 30.00 35.00

1,805,677

Upwards

40.00

Donations between spouses and partners transfers (inheritance or gift) between parents and children

 STAMP DUTY AND SIMILAR DUTIES Stamp duty has to be paid in order to obtain many administrative documents, such as residence permits and passports, hunting permits and licenses to drive motor pleasure boats. VEHICLE STAMP DUTY : The level of polluting vehicle emissions has become a criterion for setting the amount of duty payable on documents relating to motor vehicles. TAX ON VEHICLE REGISTRATION CERTIFICATES SURTAX ON THE MOST POLLUTING PRIVATE VEHICLES TAX ON COMPANY CARS : This tax is payable on private cars owned or used by companies, wherever they are registered, including, under certain conditions, cars used by employees or senior managers for which the company pays mileage.

Taxable Wealth

Rate %

WEALTH TAX: is an annual tax payable by individuals on account of their ownership of personal assets, the net value of which, assessed on 1 January of the year of taxation, exceeds a certain amount. It was introduced in 1989. PROPERTY TAX PAYABLE BY LEGAL ENTITIES: Legal entities liable to the 3% tax must file a return at the latest by 15 May of each year stating the place, composition and market value of taxable real properties and real property rights owned at 1 January of the year of taxation. The return must be accompanied by payment of the tax.

Less than 800,000 Between 800,000 and 1,310,000 Between 1,310,000 and 2,570,000 Between 2,570,000 and 4,040,000 Between 4,040,000 and 7,710,000 Between 7,710,000 and 16,790,000 Above 16,790,000

0.00 0.55 0.75 1.00 1.30 1.65 1.80

This applies to non-residents if the net value of their French assets (excluding investments in France) exceeds the limit of 800,000 (as at 1 January 2011).

Local direct taxes are the oldest taxes in the French tax system. They succeed the direct taxes that had been created in 1790 and 1791 as State taxes and were transferred to local authorities in the 1914-1917 tax reform. PROPERTY TAX ON DEVELOPED LAND : levied annually on developed land situated in France except where there is entitlement to permanent exemption (public property, farm buildings, etc.) or temporary exemption (new or innovative enterprises, incentives for development as part of urban or regional development policy. PROPERTY TAX ON UNDEVELOPED LAND: is levied annually on owners of any undeveloped land situated in France except where there is entitlement to permanent exemption (public property) or temporary exemption (e.g. incentives for organic farming, reforestation and the conservation of environmental interest zones). RESIDENCE TAX : is payable by any person who, on 1 January of the year of taxation, has taxable premises at their disposal, whatever their status (owner, tenant, free occupier). LOCAL BUSINESS TAX : is payable annually by legal entities or individuals carrying on a regular non-salaried business activity in France. local business tax is assessed on the rental value of fixed assets liable to property tax (developed and undeveloped) available to the taxpayer for the requirements of his business during a reference period which is generally the last but one calendar year before the year of taxation.

France has double taxation agreements with the following countries EU members Australia Canada China India Israel France has a Japan broad tax treaty Malaysia New Zealand network covering Pakistan more than 100 Philippines countries Singapore Sri Lanka Switzerland USA
Abbreviations: EL : exchange of letters G : gifts IN : inheritance tax IT : income tax R : rider RD : registration duty SA : special agreement T : treaty WT : wealth tax

Country

Treaty date

Treaty concenred

Austria

T 26 March 1993 T 26 March 1993

T 12 August 1843 T 10 March 1964 R 15 February 1971 ,R 8 February 1999 ,T 20 January 1959 T 10 September 1971 RR 5 February and 4 March 1974 T 2 May 1975 R 16 January 1987 R 30 November 1995 T 30 May 1984

IT, WT IN, G

Begium

Exchange of information IT IN, RD

Brazil

IT

CANADA

IT, WT, IN, G

CHINA

IT

Germany

T and EL 21 July 1959 R 9 June 1969 R 28 September 1989 R 20 December 2001 RR 16 February 2006 T 12 October 2006 T 29 September 1992

IT, WT IT Frontier workers and temporary assignments IN, G IT, WT

India

TAX REVENUE MILLION 138,331 52,805 52,009 15,594 17,122

Value Added tax Income Tax Corporation Tax Domestic Tax On Minereal Oil Product Other Taxes Total Net Tax Revenues

275,861 22,669 298,530

NON TAX REVENUE Total non tax revenue TOTAL REVENUE BEFORE DEDUCTION

DEDUCTION FROM STATE REVENUE For local government For the european communities
Total deduction from state revenue TOTAL NET STATE REVENUE

52,393 18,900 71,293 227,237

France is not attractive for invesstor but for R&D process France give lot of benefits and tax relaxation.

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