French parliament approves law to raise taxes on ‘super-dividends’
The tax will apply to companies with €1 billion in sales or more, such as BNP Paribas, Sanofi, LVMH, and Total
The Assemblée Nationale passed the law by a large majority (145 votes in favour, 37 against)
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French parliament the Assemblée Nationale has adopted a law that will increase taxes on so-called ‘super-dividends’ of very large companies.
The tax will apply to companies with sales of €1 billion or more which distribute dividends that exceed 20% of the average dividends distributed over the previous five years. The amount in excess of 20% will additionally be taxed at 5%.
The law was passed by a large majority (145 votes in favour, 37 against), with major cross-party support, including from left-wing MPs and those in the far-right party the Rassemblement Nationale. The vote was also supported by the socialists, communists, and ecologists (green party).
The Parti Socialiste said: “This tax is aimed at very large companies that have benefited from the succession of crises [and continued to] pay record dividends.”
La France Insoumise (left-wing) MP Aurélien Le Coq said during chamber debates that super-dividends “only serve to inflate financial bubbles and make a few rich”.
MPs cited in particular the companies BNP Paribas, Sanofi, Axa, LVMH and Total.
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Criticism
Despite the widespread support, Macron MPs avoided the vote, with Pierre Cazeneuve MP saying that the measure would mean that companies will invest less in France.
“Companies are going to pay out more dividends to ensure the same return for their shareholders and as a result invest less…[producing] the exact opposite” result, he said.
Charles de Courson who presented the budget to the parliament also recalled that a similar measure adopted in 2017 had later been annulled by the European Court of Justice. “These amendments are Euro-incompatible, which is regrettable [but] if you vote for them, the same thing will happen again,” he said.
Other measures
The new super-dividend measure comes after MPs also voted to adopt an LFI amendment that would require a company not to relocate its activities away from France for 10 years after benefiting from the le versement du crédit impôt recherche (CIR, research tax credit).
They also approved a series of tax measures designed to encourage agricultural businesses to adopt more sustainable farming systems.
