France to abol­ish ‘Exit Tax’

New Straits Times - - BUSINESS -

PARIS: France will abol­ish a tax im­posed on the cap­i­tal gains of top earn­ers and en­trepreneurs who leave France and sell their as­sets with a more-tar­geted levy de­signed to de­ter tax op­ti­mi­sa­tion, said a fi­nance min­istry spokesman on Satur­day.

France im­posed the so-called “Exit Tax” in 2011 dur­ing the pres­i­dency of Ni­co­las Sarkozy.

It re­quired in­di­vid­u­als who held as­sets in stocks and bonds of more than €800,000 (RM3.8 mil­lion), or at least 50 per cent of the cap­i­tal of a com­pany, to pay cap­i­tal gains on as­sets sold up to 15 years af­ter they left France.

Its aim was to stop in­di­vid­u­als tem­po­rar­ily chang­ing their tax domi­cile to skirt French taxes but pro-busi­ness Pres­i­dent Em­manuel Macron says it dam­ages France’s at­trac­tive­ness as an in­vest­ment des­ti­na­tion.

A fi­nance min­istry spokesman said the new “anti-abuse mech­a­nism” would con­cern as­set sales made up to two years af­ter an in­di­vid­ual leaves France.

“The Exit Tax as it is to­day will be scrapped,” said the min­istry spokesman.

“The new scheme will tar­get as­set sales made shortly af­ter leav­ing France — two years — to stop peo­ple mov­ing back and forth over a short pe­riod to op­ti­mise tax ef­fi­cien­cies on cap­i­tal gains.”

The new rules will come into ef­fect on Jan­uary 1 next year.

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