Finance Act of 2021 – A focus on four key points

Pierre-Olivier Cointe, Partner at Caderas Martin, discusses the four main items to be considered for the 2021 fiscal year.

  1. Reduction in the corporate tax rate

The corporate tax rate is reduced by 1.5 % down to 26.5 % for companies posting revenue of less than €250 million.
For companies with revenue in excess of €250 million, the tax rate drops from 31 % to 27.5 %.

  1. A 50 % tax credit for rent waivers and cancellations

These business support initiatives are part of the relief measures introduced within the context of the health crisis. However, they do come with certain conditions tied to the number of employees of the lessee company.

  1. Reduction of the Company value-added contribution (CVAE) and Corporate property tax (CFE)

CFE: the tax bases are cut in half for industrial companies;

CVAE: The rate of this production tax, whose proceeds are allocated to local authorities, is halved;

  1. Unrestricted revaluation of fixed assets

These measures are also in connection with the health crisis. They are designed to enable companies to improve their equity capital:

  • Unrestricted revaluation of all tangible and financial fixed assets with deferred taxation of unrealised capital gains;
  • Lease-back facilities on property: spreading of capital gains tax over the duration of the leasing contract.

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