Urban free zones (ZFU-TE): profit tax exemption extended to 2020 with tighter conditions
The second 2014 amending finance act extended until 31 December 2020 the profit tax exemption for businesses starting or moving an activity into an urban free zone, renamed urban free zone-entrepreneurial territory (ZFU-TE). For new establishments from 2015, exempt profit is capped at €50,000 a year (instead of €100,000) and the exemption requires that at least half of employees live in a ZFU-TE or priority neighbourhood of the urban unit. From 2016, a city contract must also exist.
Measure originators
A positive amount is revenue or savings for public finances; a negative amount is a cost or lost revenue.
Measure impact
Businesses with fewer than 50 employees setting up in a ZFU-TE between 2015 and 2020, with a 50% local hiring clause. The revenue loss for the State was estimated at €8m in 2016 and €29m in 2017, with a total cost of €690m over the full exemption period. The scheme was later extended again (2021 and 2025 entries).
Official references
Sources
Procedure timeline
Follow the progress of this fiscal measure through the different stages of the parliamentary procedure.
Administrative implementation
Entrée en vigueur de la mesure et mise en œuvre par l'administration
Administrative implementation
Entrée en vigueur de la mesure et mise en œuvre par l'administration
Possible referral to Constitutional Council
Décision de conformité / censure partielle
President of the Republic signature
Publication au Journal officiel
National Assembly has the final say
Si échec CMP
Joint committee
Désaccord éventuel
Debate and vote
Debate and vote
Débat et vote en séance publique à l'Assemblée nationale, ou engagement de la responsabilité du Gouvernement (article 49.3)
Council of Ministers
Validation interne