France: Proposed tax reforms of President-elect Macron | KPMG Global
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France: Proposed tax reforms of President-elect Macron

France: Proposed tax reforms of President-elect Macron

Emmanuel Macron, having been elected president of the French Republic on Sunday, 7 May 2017, will enter office on Sunday, 15 May. He then will immediately have to appoint a new government.


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The tax measures in President-elect Macron’s campaign platform were not very detailed—especially tax measures that would affect enterprises and businesses. The following brief discussion focuses on measures announced during the campaign.

Tax reform measures for companies

During the presidential campaign, Macron proposed the following tax reform measures for companies:

  • Continuation of a progressive reduction (decrease) to the corporate income tax rate until the rate eventually reaches 25% (no date of implementation has been indicated)—note that the Finance Law for 2017 already provides for a phased-in reduction of the corporate income tax rate to 28%, until 2020 when the rate will be generalized.
  • Repeal of the 3% tax applicable to distributions of dividends (except in certain instances).

Tax reform measures for companies and individuals

During the presidential campaign, Macron proposed the following tax reform measures for companies and individuals:

  • Reduction or repeal (cancellation) of certain social contributions, with a slight increase in a social levy imposed on employees and retirees.
  • Implementation and imposition of a withholding system on salaries and revenues (similar to “pay as you earn” or PAYE systems) would be delayed by one year, and would apply beginning from 1 January 2019, and not beginning from 1 January 2018.

Tax reform measures for individuals

During the presidential campaign, Macron proposed the following tax reform measures for individuals:

  • Married couples could elect to be subject to income tax on an individual and separate basis (currently not available except in limited instances).
  • Passive income would be subject to a flat rate of 30% instead of being now subject to social levies (15.5%) and income tax at progressive rates up to 45% (which currently can result in a maximum rate of taxation/levies of approximately 60%).
  • “Wealth tax” would apply only to real estate (whereas currently, it applies to all assets, whatever their nature, but with certain exceptions, in particular for so-called “professional assets”) for individuals domiciled in France.
  • An exemption from the “dwelling tax” on owned or leased residences would be available to approximately 80% of taxpayers (note that substantial exemptions already exist for taxpayers with “low revenues”).
  • Pension regimes would be modified, in the future.

KPMG observation

Tax professionals with Fidal* have observed that the schedule for officially proposing these reforms has not yet been specified. In general, a “rectified budget” for the current year (which includes, in most situations, tax measures) is submitted to the French Parliament in June or at the beginning of the summer. Alternatively, the measures mentioned above could be included in a “rectified budget” during the fall or directly in the Finance Law for 2018.

This year, the schedule is uncertain given that parliamentary elections will take place on 11 and 18 June. The possibility for the new president to implement tax reforms will, in part, depend on the outcome of those elections. 


For more information, contact a tax professional with Fidal* in Paris or KPMG in New York:

Gilles Galinier-Warrain | +33 1 55681654 |

Patrick Seroin | +1 (212) 954-2523 |

Olivier Ferrari | +33 1 55681476 |

Nathalie Cordier-Deltour | +33 1 55681454 |

Laurent Leclercq | +33 1 55681642 |

Bruno Bacrot | 

* Fidal is a French law firm that is independent from KPMG and its member firms.

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