Cap on real property wealth tax

Cap on real property wealth tax 

Real property wealth tax may subject to a cap such that the total of Income Tax (IT), social security charges, levies by way of discharge and other contributions and taxes due on income and proceeds from the previous year, plus wealth tax, does not exceed 75% of income for the year N-1. 

The 2017 finance bill has introduced an anti-abuse clause targeting taxpayers who artificially reduce their taxable income by capitalizing cash in a financial holding entity (so-called “cash-box”) in order to fully benefit from the wealth tax capping mechanism.

The French Tax Authorities, FTA, are entitled to take into account such artificially capitalized income for the computation of the wealth tax capping.

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