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Immigration and Social Security in France
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online-helpdesk
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from 1982 to 1999 PDF Print E-mail
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
1982: Annual wealth tax (Impôt sur les Grandes Fortunes—IGF)
The 1982 Budget established a wealth tax. It applied to estates worth more than 3 million francs, with individual’s wealth being evaluated on 1 January. The rate is progressive by bracket from 0.5% to 1.5%.


1986 Business Tax rate decreased to 45%
Edouard Balladur, once he joined the Finance Ministry, introduced the act of 8 July, which lowered the business tax from 50% to 45%, then to 42% in 1988. Later, successive governments reduced it to 39%, 37% and 34%.


1 January 1987: Annual wealth tax abolished

1987: Upper limit placed on the effect of the dependents allowance, which was too favourable to upper income brackets

1987: Telecommunication services become subject to VAT, in an attempt to harmonize VAT application with European standards.


1988: Business Tax rate decreased to 42%
In the same vein, Balladur reduced the business tax rate from 45% to 42%.


1 January 1989: Another wealth tax (Impôt de solidarity sur la fortune—ISF) created
After having disappeared for two years, the wealth tax returned, with the same characteristics, but another name: Impôt de Solidarité sur la Fortune (ISF). And it ends up having perverse economic effects.

1989: Business Tax rate decreased to 39%
Pierre Bergovoy continued this policy of regular reduction of the business tax.


1990: Business Tax rate decreased to 37%


1991: Business Tax rate decreased to 34%

1991: The Contribution sociale generalisée – CSG (general social contribution)
The 1991 budget established the CSG contribution in order to have all income participate in financing the social security system. Its initial rate was 1.1%, and it was progressively increased in 1993, 1997, and 1998 to 2.4%, 3.4% and 7.4%, respectively. It was reduced to 6.2% for replacement income and increased to 8.2% for estate income.


1996: The Contribution pour le remboursement de la dette sociale – CRDS (contribution to reimburse the social debt)
A ruling dated 24 January 1996 established the CRDS at a rate of 0.5% for five different contributions:
  • work and replacement income,
  • estate income,
  • proceeds from set investments subject to levy at source at on savings exempt from income tax.
  • sale of precious metals, jewels, art, collectables and antiques.
  • amounts spent or proceeds of games of chance.
When created, it was meant to last for 13 years, but even before its expiration date, it was prolonged another 5 years, and then the act of 13 August 2004 put an end to any hope of seeing the CRDS disappear. Indeed, this 2004 purely and simply abolished a final date, specifying that the CRDS will be levied until the social security debt and its interests have been paid off, which in other words means until kingdom come!

Both the CRDS and the CSG are only owed by people who reside physically in France.

1996: VAT rate increased to 20.6%

Dependents allowance for common law spouses
Half-part (rather than a whole part) is granted for the first dependent person.

Partial abolition of tax deduction for life insurance bonuses.


1997
Abolition of tax deduction for interest on loans contracted for purchasing one’s main residence as of 1 January 1997, for new homes.
Creation of urban franc areas (ZFU) and a Corsica franc area.
Set deduction for property tax raised to 14%.
Time period for charging property deficits extended to 10 years.
Beginning of taxation on maternity daily allowances.
Progressive abolition of supplementary deductions for business expenses.
Tax deductions for investment in high-tech mutual funds (FCPI).
Article 62 of the CGI targets taxation based the rules for wages and salaries for managers and associates.


1998
Abolition of tax deduction for interest on loans contracted for purchasing one’s main residence as of 1 January 1998, for old homes.

Establishment of a new, partial tax relief for taxpayers with modest income.


1999
Prolongation of the “Perissol” provision.
Rental investment—Besson scheme.
Increase of the tax advantage sum for maintenance costs for main residence.
Upper limit placed on the effects of dependents allowance by lowering the tax advantages attached to half-parts for the family.
Abolition of VAT on purchases of constructible land by individuals.
Last Updated on Thursday, 08 October 2009 18:16