Cap on the territorial economic contribution lowered from 3% to 2% of value added
Article 8 of the 2021 Finance Act lowers from 3% to 2% of value added the cap on the territorial economic contribution (CET, the sum of the business property contribution and the CVAE) provided for in Article 1647 B sexies of the General Tax Code. Businesses whose CET exceeds this cap obtain, on request, relief for the excess, borne by the State. The measure applies to the CET due for 2021 and subsequent years. It accompanies the halving of the CVAE and of the property tax bases of industrial establishments. The 2% rate applied to the CET due for 2021 and 2022; it was then lowered to 1.625% for 2023 by the 2023 Finance Act, and to 1.531% for 2024.
Measure originators
No official estimate found for this measure.
Measure impact
Businesses whose combined CFE and CVAE exceed 2% of their value added (instead of 3%) can claim relief for the excess from the CET due for 2021. The Senate finance committee report mentions an effect of €400m for the State, presented as lower spending compared with the increase in relief that the CVAE and CFE cuts alone would have caused; the measure's own effect is not isolated.
Official references
Sources
Procedure timeline
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Administrative implementation
Entrée en vigueur de la mesure et mise en œuvre par l'administration
President of the Republic signature
Publication au Journal officiel
Possible referral to Constitutional Council
Décision de conformité / censure partielle
National Assembly has the final say
Si échec CMP
Council of Ministers
Validation interne