Budget 2023: Taxes, private jets, food stamps… What’s in the adopted text after 49.3

The faux-spense is over. 49.3 Finance Bill 2023 passed on Monday 24 October 2022.

Despite the two criticism proposals put forward by Nupes and RN – they had no chance of success – the text amended by the government was therefore adopted in the first reading in accordance with the procedure in case of triggering and rejection of Article 49.3. from censure motions.

However, the government has agreed to retain a hundred parliamentary amendments, enough to increase the bill by around 700 million euros, even if it uses the tool to avoid blocking the 2023 budget.

These are the main measures that can be remembered from the first part (revenues) and the second part (expenditure) of the 2023 budget discussed in the Milli Majlis from October 27, 2022.

New income tax scales for 2023

The indexation of the income tax scale, included in the first version of the text, to the level of inflation (ie 5.4%), excluding the tobacco product, will indeed be carried out. The result: the scales will be slightly higher than in 2021, which should prevent a tax increase for some households.

• This measure will cost the state 6.2 billion euros.

There is no control over property tax increases

Although it will already go up in 2022, in 2023 we will have to expect an explosion in the amount of property taxes around 7%. The amendment (not adopted by the government) proposed to limit the increase of the base for calculating the property tax to 3.5% in 2023. This year, this increase has already reached 3.4%.

Because rental prices, which serve as the basis for calculating property tax, are updated every year, and from November to November INSEE monitors the evolution of the adjusted consumer price index.

“If there is nothing in this financial law, growth may be 6-7% in 2023. This increase leads directly to an overall increase in property tax,” centrist MP Charles de Courson (LIOT) warned, predicting it would be “an additional tax burden that will be difficult for taxpayers”. [qui] vary greatly from area to area due to tax rates voted on by communities”.

Increasing the tax on vacant houses

In order to send a strong “price signal” to “owners who do not own or rent out” the amendment proposes to increase tax rates on vacant apartments by a third, “to 17%”. in the first tax year, and up to 34% from the second tax year.

A push for childcare

Cross-partisan amendments to help households pay for child care have been retained. As such, the upper limit of the tax credit for childcare costs for children under the age of six is ​​revised. This will increase to 3,500 euros for each dependent child, up from 2,300 euros so far. “In case of joint custody, the tax credit is shared between his parents,” the amendment states.

• The cost of the event is estimated at 200 million euros.

Meal coupons

Another amendment was retained, proposing to increase the “nominal value of meal vouchers” to €13 to “support the purchasing power of the 4.8 million workers who benefit from it”.

Today, for a company to be entitled to the maximum exemption from the employer’s contribution of €5.92, it must offer a meal voucher between €9.87 (if it pays 60% of the amount) and a maximum of €11.84 (if it does). between 50% of the amount). After that, it can be up to a maximum of 13 euros per working day.

• Estimated cost: 140 million euros.

Support for widows of veterans

The majority also retained a “social justice” amendment that would have extended tax relief to widows of veterans. Thus, widows of all veterans “regardless of their husband’s age at death” would be given an additional one-half tax share.

• Estimated cost: 133 million euros.

There is no tax relief for nursing home residents

On the other hand, the government did not keep a proposal for tax relief for the remaining amount to be paid by all residents of nursing homes, voting against an amendment that would have allowed the government to reduce the bill by 200 euros per month. But the chief executive considered it too expensive and therefore rejected it.

5.5% VAT on masks

“Recent rise in pollution shows we need to stay vigilant against virus,” the bill includes a proposal to extend the 5.5% VAT by an additional year, to December 31, 2023. It applies to masks, protective clothing and hygiene products intended to combat the spread of Covid-19.

Taxation of SMEs

The government wants to provide financial support to SMEs. So he kept the amendment aimed at raising the profit ceiling with a reduced corporate tax rate of 15%. Instead of 38,120 euros, this ceiling will increase to 42,500 euros.

• Estimated cost: 170 million euros.

In addition, another amendment restores the tax exemption for energy renovation of high-end buildings of VSEs and SMEs. It will apply to expenses incurred between 1 January 2023 and 31 December 2024.

Private jet tax

The government backed an amendment aimed at aligning the favorable tax on kerosene for private jets with other fuels. Until now, private jets have enjoyed a tax advantage and lower excise duty compared to other types of fuel. By 2024, the “excise rates applied to aviation gasoline and jet fuel” will be adjusted to the “excise rate applied to road gasoline.”

Harmonization aiming to “end an unjustified and dubious environmental difference in treatment between different fuels or different uses of the same fuel”.

• A measure that should bring 11 million euros to the state from 2023.

Frying oil was used as fuel

Another fuel-related proposal passed was legalizing used oil as a fuel. “This practice is widespread in the country, but is still prohibited while Europe promotes the use of this type of biofuel,” the amendment says, reminding that “this fuel rejects up to 90% less greenhouse gases than conventional diesel and emits much less emissions. fine particles and much cheaper than fossil fuels.”

In France, “170 million liters of cooking oil are used in catering every year and less than 25% are recycled and recovered”.

No super profits tax, but…

The opposition has pushed for a tax on the extraordinary profits of the biggest companies that are making super profits in the current crisis. The government strongly opposed this, but eventually backed down somewhat.

However, there is no new tax, but two government amendments aimed at transposing European regulations into national laws:

• The first one envisages “creating a temporary solidarity contribution applicable to companies operating in the oil, coal, refining and gas sectors”. This contribution is defined as 33% of the exceptional profit of these groups above a certain threshold. It should bring 200 million euros of income to the state.
• The second one envisages capping the income from electricity production “at €180/MW across Europe”.

There is no increase in taxation on super dividends

On the other hand, the executive did not retain the amendment that would have taxed “superdividends” from large French companies. The proposal would have imposed a “flat tax” of 35% (vs. 30% currently, editor’s note) on superdividends paid more than 20% of average distributed income within a company between 2017 and 2021.

The proposal accepted at the base is contrary to the government’s recommendation to not restore the “exit tax” and to prevent the tax exile of entrepreneurs.

Zero interest loan for reconstruction

A zero-interest loan was introduced by way of amendment to encourage upgrading, i.e. conversion of thermal cars to electric cars. For now, it will only apply to a few cars, “around 500 retrofitted cars for an estimated upgrade of €14,000 per car”.

Last year, from January 1, 2023, a zero-interest loan was already granted for the purchase of an electric car on an experimental basis for a period of 2 years.

A scratch game about biodiversity

Finally, a special event to remember is the launch of a new biodiversity scratch game by Française des Jeux in 2023. The adopted amendment proposed that part of the proceeds be donated to the French Biodiversity Office “to support projects in favor of biodiversity conservation and restoration, uniting players through a platform that highlights their regional roots and contributions”. Terms have not yet been determined.

Increased funding for communities

Faced with community discontent, Elisabethe Borne promised them to increase the general operating grant (DGF) to 320 million euros instead of the originally announced 210 million. It is in the text.

It’s not over yet

After that, the text adopted in the first reading must be adopted in the Senate, and then returned to the Milli Majlis in the second reading. To bypass it, the Prime Minister may still decide to use 49.3 as we explain in this article.

The same applies to expenditure, the second part of the budget, which will be reviewed from October 27. Among the measures to be discussed is a 15% tariff shield from the beginning of 2023, in particular.

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