Urban free zones: three-year tapered exit from exemptions and social security exemption for self-employed workers in urban regeneration zones

The 2002 Finance Act organises a gradual exit from the urban free zone (ZFU) regime created in 1997. Article 17 provides that after the five-year exemption, profits are taxed on 40%, 60% then 80% of their amount over three years, along with the annual flat-rate tax, and that the business tax base receives a 60%, 40% then 20% allowance; the property tax exemption is reserved for establishments set up before 31 December 2001 and the business tax exemption for those set up until 31 December 2004. Article 145 keeps the employer contribution exemption on a tapered basis for three years (60%, 40%, 20%) after the five years. Article 146 grants craftsmen and shopkeepers in urban regeneration zones an exemption from health insurance contributions for up to five years from 2002 and makes the exit from the exemption for the self-employed in ZFUs tapered.