France in ‘embarrassing tax climb down’

The French Socialist government has been forced to withdraw a controversial new profits tax less than two weeks after proposing it in its 2014 Finance Bill. It comes as French manufacturers claimed that it would unfairly penalise them in the global marketplace.

On Sunday the finance minister Pierre Moscovici confirmed that the government would instead seek to raise the existing corporation tax rate. The new 1% operating profits levy (based on earnings before interest tax depreciation and amortisation) was proposed on 25 September. It was designed to help bring down France’s deficit currently 95.1% of GDP – one of the highest within the...