Taxe professionnelle

Taxe professionnelle
Name	Taxe professionnelle
Country	France
Introduced	1975
Abolished	2010
Type	Local business tax
Administered by	Ministry of Economy and Finance, Direction générale des collectivités locales

Taxe professionnelle The Taxe professionnelle was a local French business tax introduced in 1975 and levied on the production factors of enterprises. It affected a wide range of entities including sociétés anonymes, SARLs, entrepreneurs individuels, and associations with taxable installations. Prominent debates over the tax involved figures such as Valéry Giscard d'Estaing, François Mitterrand, Jacques Chirac, and Nicolas Sarkozy and institutions like the Conseil d'État and Conseil constitutionnel.

History

The Taxe professionnelle was created under the administration of Valéry Giscard d'Estaing as part of fiscal reforms debated in the Assemblée nationale and the Sénat. Early reforms involved ministers such as Raymond Barre and were contested by trade unions including CGT and CFDT. During the 1981 election and subsequent Mitterrand era, amendments touched on industrial policy favored by Michel Rocard and Édith Cresson. Jurisprudence from the Conseil d'État shaped interpretation, while local authorities like Île-de-France and Provence-Alpes-Côte d'Azur lobbied for autonomy. The tax became central in debates involving OECD comparisons and European Union state aid rules. Ultimately, the tax was abolished in a reform initiated by Nicolas Sarkozy and implemented under François Fillon as part of broader fiscal decentralization.

Scope and Tax Base

The tax base encompassed tangible and intangible production factors located in municipalities including Paris, Lyon, Marseille, Lille, and Bordeaux. It applied to movable assets, real property, and equipment owned by entities such as Air France, Renault, TotalEnergies, and small firms registered as micro-entrepreneur. The taxable base considered rental value of premises recognized by Direction générale des Finances publiques rules and valuations used in impôt foncier assessments in municipalities like Toulouse and Strasbourg. Public institutions including Hôpitaux de Paris and Université Paris-Sorbonne encountered special treatments, while foreign multinationals such as Siemens and IBM were assessed on French installations.

Calculation and Rates

Rates were set by local authorities like Conseil municipal de Paris and Conseil général de la Gironde and involved formulas debated in the Cour des comptes. Calculation combined a share based on the rental value of property and a share linked to payroll and equipment, with computations relying on accounting figures used by Ernest-Antoine Seillière-era employers' organizations and tax advisers from firms like PricewaterhouseCoopers and Deloitte. Legislative instruments such as laws passed by the Assemblée nationale and finance acts under Lionel Jospin adjusted caps and coefficients. The interplay with Taxe sur la Valeur Ajoutée and Impôt sur les sociétés prompted modeling by INSEE and studies by OECD and International Monetary Fund.

Exemptions and Reliefs

Exemptions targeted start-ups, small businesses, and cultural institutions including beneficiaries of schemes promoted by Ministry of Culture programs linked to Centre Pompidou and regional cultural centers. Reliefs were granted to export-oriented firms such as Lafarge, to high-unemployment areas like parts of Nord-Pas-de-Calais, and under regional aid consistent with European Commission state aid guidelines. Specific reliefs for research-intensive companies referenced incentives used by Institut Pasteur collaborators, while agricultural enterprises registered with Chambre d'agriculture enjoyed differentiated treatment.

Administration and Collection

Administration was handled by local tax services coordinated with national agencies including the Direction générale des Finances publiques and audited by the Cour des comptes. Collection interacted with municipal budgets of Marseille, Nantes, Nice, and intercommunal structures like Métropole Européenne de Lille. Disputes reached tribunals such as the Tribunal administratif de Paris and appealed to the Conseil d'État, with influential cases cited by commentators from Revue Fiduciaire and legal scholars at Université Panthéon-Assas.

Economic and Fiscal Impact

Debate over incentives cited effects on investment decisions by conglomerates like Bouygues and Saint-Gobain, regional location choices involving Toulon and Rouen, and impacts on employment measured by INSEE and think tanks including Institut Montaigne and Terra Nova. Critics argued the tax discouraged capital-intensive industries such as manufacturing exemplified by Peugeot plants, while proponents contended it funded local services in departments like Bouches-du-Rhône. Analyses by OECD and International Monetary Fund informed policy, and labor market implications were studied by academics at École Polytechnique and Sciences Po.

Reforms and Replacement (cession de la taxe professionnelle)

Reform efforts culminated in the 2010 abolition, part of a package sponsored by Nicolas Sarkozy and implemented under François Fillon with instruments designed by the Ministry of Economy and Finance and debated in the Assemblée nationale. The replacement introduced components such as the Contribution économique territoriale and other levies affecting municipalities like Lille and Bordeaux, with transitional compensation mechanisms negotiated with associations of mayors including Association des Maires de France. Litigation and policy evaluation continued in courts including the Conseil constitutionnel and studies by Cour des comptes and INSEE.

Category:Taxation in France