Continued reduction in corporate income tax, new hiring incentives, lower production taxes... From January 1, 2021, there will be a number of changes in the rules applicable to businesses. Here's a closer look at the main changes.
Strengthening the equity capital of VSEs/SMEs and ETIs
The PLF (Finance Bill) 2021 has ratified the strengthening of companies' equity capital that was provided for in the stimulus plan. In concrete terms, VSEs/SMEs and ETIs will be able to benefit from solvency aid as part of the continuity of state-guaranteed loans (PGE).
In detail, 150 million euros have been earmarked to guarantee investments bearing the "France Relance" label, and the State will be able to provide a guarantee of up to 2 billion euros to refinancing instruments for equity loans obtained by VSE/SMEs and ETIs from banking networks.
Lower corporate income tax
The French Finance Act confirms the reduction in the corporate income tax rate. The trajectories of the cuts will vary according to sales.
In 2021, the rate will rise to 26.5% for companies with sales of less than €250 million, and to 27.5% for those with sales of €250 million or more.
Exceptional aid for hiring
Two new exceptional grants have been created to boost hiring. The first, worth 4,000 euros over one year for a young employee, is granted to companies hiring an employee under the age of 26 on a permanent or fixed-term contract of 3 months or more, with a salary of up to twice the SMIC.
The second is designed to support recruitment under work-study contracts. It involves the funding of apprenticeship and professionalization grants for the first year of the contract.
Lower production taxes
The reduction in production taxes was announced by the government last summer to boost business competitiveness. Worth 10 billion euros, it will involve the application of the following 4 measures:
- A 50% reduction in the CVAE tax for all companies liable for this tax;
- A reassessment of the property tax calculation method;
- A reduction in the capping rate for the contribution économique territoriale (CET) from 3% to 2%;
- A 3-year extension to the CFE exemption for new or expanded establishments.
Launch of a long-term partial activity scheme
A long-term partial activity scheme (APLD) has been created to offer employers and employees greater visibility in the medium term. Launched in July 2020, this scheme provides compensation of 70% of gross salary, up to a maximum of 4.5 times the SMIC (minimum wage), 85% of which is paid by the State and 15% by the employer.