Wealth tax reduction for investment in SMEs cut from 75% to 50%

Article 38 of the 2011 Finance Act lowers from 75% to 50% the rate of the wealth tax (ISF) reduction for direct or holding-company subscriptions to SME capital (Article 885-0 V bis of the General Tax Code) and lowers its ceiling from €50,000 to €45,000. The ceiling for investment through funds (FCPI, FIP) falls from €20,000 to €18,000, and Article 40 lowers the ceiling of the ISF reduction for donations to €45,000. The rate cut comes from an amendment by MPs Gilles Carrez and Nicolas Forissier adopted against the Government's opinion; the lower ceilings result from the 10% cut proposed by the Government. The new rules apply to subscriptions to company capital made from 13 October 2010 and to funds set up from 1 January 2011. The ISF was replaced by the real estate wealth tax in 2018.