LEGAL UPDATES
| from 1948 to 1976 |
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History Immigration Through 1945 1945–1973 1974–1980 1980–1985 1986–1988 1989–1992 1993–1994 1996 1997–2001 2002 2003 2004 2005 2006 2007 Social Security Social Welfare in Europe: An Historical Overview Taxation History of Taxation in France First century BC until 756 AD Church tithes Eleventh century until The French Revolution 1790–1914 Republican Tax from 1799 to 1945 from 1948 to 1976 from 1982 to 1999 from 2000 to 2006 Bibliography History of the OECD Model Tax Convention 1948: Exceptional levy, Income tax reform Tax on businesses established New customs duties Withholding at the source abolished 1948 held a particularly large number of events. For the first time, by decree dated 9 December, a specific tax was levied on legal entities, which were recognized as being distinct for tax purposes from the people who held them. The initial tax rate was set at 20%, then progressively increased to reach 50% in 1958 (more than doubled in 10 years!) to fall again to 33.3% in 1994. April 1948: Government Tax Authority created The Government Tax Authority (Direction générale des impôts, DGI) replaced the former divisions (Direct, Indirect and Registration). 1 October 1948: Withholding at source for salaries abolished A period of high inflation and shortages caused purchasing power to stagnate. To reduce social agitation and compensate for the effect of increased indirect taxes, the state was obliged to take measures to ease the withholding on salaries. The 16% tax on salaries withheld at the source was eliminated and replaced by a 5% salary tax paid by employers. This salary tax was later eliminated and today only applies to firms not subject to VAT. 1949–1958: Increasing Tax Pressure Increasing budget, inflation, wars in Indochina, Korea and then Algeria explain this increase. 1953–1957: Poujade Mouvement In July 1953, the Poujade Movement was born, made up of small businesses and trades who considered that the difficulties they were facing came from the heavy taxation they were subject to. Generally speaking, shopkeepers and tradesmen experienced serious difficulties. In 1954, 3,000 shopkeepers closed their doors. To make themselves heard, they acted in “commandos”, directing their activities against the tax authorities and their officers, specifically targeting the service of indirect taxation: threatening letters, intimidation, threats, defamation, and also stronger opposition in cases of audits. The movement was named after Pierre Poujade, who founded it; he ran a bookstore in Saint Céra in the Lot region, where he was a municipal counsellor. He had a strong personality, with a lot of energy and charisma, and was able to quickly rally his colleagues to his cause. For them, the tax system was to sole reason for their difficulties, and they called for a “single base tax” which, in order words, meant the elimination of direct and indirect taxes and the creation of a single tax. This utopia would only have aggravated their situation, according to a report established by the tax study group. However, this movement had the effect of providing taxpayers with a certain number of guarantees, such as being able to have legal counsel in case of a tax audit, and also harmonizing taxation conditions between salaried employees and non-salaried workers. 1954–1955: First VAT tax established 1956: Automobile “license tag” 1957: Administration’s time period for adjustment reduced by Decree dated 29 May Following the Poujade movement, the time period for adjustment was reduced from 5 years to 4 years (then from 4 years to 3 by Valérie Giscard d’Estaing in December 1963). 1959: Ruling of 2 January—Budget law established 1959: Ruling of 7 January—property tax on constructed property, property tax on non-constructed property, local taxes and professional tax They are all based on rental value, just like the four “old” property contributions. 1963: Acts of 15 March and 19 December—taxation on capital gains through withholding at the source At a rate of 15% (then 25% in 1965) and in full discharge of the income tax. A tax innovation that had many consequences. 1963: Administration’s time period for adjustment reduced by Decree dated 29 May Valérie Giscard d’Estaing, new and young finance minister, reduced the period for adjustment from 4 to 3 years. It was 5 years before 1957, then 4 years. 1965: 25% levy at source for dividends paid by French residents abolished Act of 1 July 1965 1965: Tax credit created Tax credit equal to 50% of the value of distributed dividends. 1966: VAT generalized The VAT originally applied essentially to production and wholesale. In 1966 it was extended to construction, commerce, craft trades, distribution of gas products, services (except entertainment and financial activities), liberal professions and agricultural professions (with options). 1967: World profit and consolidated profit taxes established 1967: Ruling of 17 August 1967—participation of salaried employees in business profits 1976: Act of 19 July—Taxation on capital gains in income tax The capital gains earned by individuals and companies became taxable as part of the general income tax. |
| Last Updated on Thursday, 08 October 2009 18:14 |
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