Tuesday, December 30, 2014

Constitutional Council: most of validation of the FAA in 2014 – LégiFiscal

Constitutional Council: most of validation of the FAA in 2014 – LégiFiscal

Last updated 31/12/2014

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The Constitutional Council has validated what most Monday, December 29 the provisions of the Amended Finance Act for 2014 (LFR 2014) and the Finance Act 2015.


Most validated provisions


The Constitutional Council voted Monday on the amended Finance Act for 2014 which had been seized by more than 60 deputies and 60 senators. The main provisions were validated by the Council of “wise men”.


Article 31 which allowed some municipal councils in tense areas to establish a residential surcharge (20% increase) for unassigned furnished apartments in a main residence has been validated. The city of Paris, especially in the short term could use this new provision to fight against the housing shortage.


Article 46 amendment is adopted by the second provision made the most debate in this LFR 2014. It provides for a 50% increase in the tax on commercial surfaces (TASCOM) for institutions whose surface sales exceeding 2 500 m². This provision, which affected mainly supermarkets was declared constitutional by the Council.


be found among the other measures of the FAA in 2014 unchallenged by the Council of “wise men”, the following:


  • suppression of the premium for employment from 2016 in favor of a new aid package for modest workers

  • instaurations new measures to fight against tax fraud (in particular VAT)

  • more taxes of the banking and insurance and tax offices in Ile de France will now not deductible from taxable income at the corporate tax.



The provisions censored


The Constitutional Council nevertheless censored the following:


  • Section 60: it were to create a tax of 75% real estate capital gains persons or bodies established in a non-cooperative State. The Council considered this rate as excessive and contrary to the principle of equality before public burdens .

  • Section 80: he foresaw the submission of a report to Parliament on the financial consequences of a unilateral breach of motorway concession contracts privatized in 2006. The report to be submitted by 30 December this year The Constitutional Council considered that this provision was contrary to the principle of accessibility and intelligibility of the law.



From the press release of the Constitutional Council – 2014-708 DC



The Council, in addition to the censorship of section 109 that had no place in the supplementary budget, also censored:

– the fifth paragraph Article 72 on the arrangements of the parent companies which did not allow to assess the activities subject to tax under this provision, including the activities of subsidiaries and sub-subsidiaries of a parent company.

– the provisions of Article 60, which instituted a tax rate of 75% real estate capital gains of individuals or organizations based outside France in a non-cooperative State or territory within the meaning of Article 238-0 A of the General Tax Code. With social contributions on investment income, the tax rate of 90.5% posed to taxpayers an excessive burden in terms of their ability to pay and violated the principle of equality before public burdens;

– Article 80 provided for the submission of a report to Parliament with the consequences for the state budget of a unilateral breach at the initiative of the State, contracts of six motorway concession companies privatized in 2006. This break as the report was tabled in Parliament were to occur no later than 30 December 2014. Such a provision contrary to the principle of accessibility and intelligibility of the law was declared unconstitutional with the Constitution.


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