News
30 Dec 2013 10:26am

French "millionaire's tax" upheld

France’s highest court has deemed legal the controversial 75% tax on earnings over €1m

The constitutional council has given the go-ahead to the "millionaire's tax" to be levied on companies that pay salaries of more than £830,000 a year.

President Francois Hollande's initial proposal was ruled unconstitutional last year.

Under the new proposal, companies will have to pay a 50% duty on wages above €1m. However, in combination with other taxes and social charges, the rate will amount to 75% of salaries above the threshold.

"The firms which pay salaries of more than €1m a year are called to show more solidarity in 2013 and 2014," the council said.

The tax is expected to affect about 470 companies and a dozen football clubs during 2013 and 2014, and is forecast to raise approximately €210m a year.

French football clubs went on strike earlier this year because of the large number of players earning above the new tax threshold. Clubs said the plan could spark an exodus of top players in the country.

France fell back into its second recession in four years on the first anniversary of Hollande’s presidency earlier this year.

Raymond Doherty

 

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