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FINANCE LAW FOR 2008
The
Finance Law for 2008, published in the Official Journal on 27th
December 2007, came into force on 1st January 2008. The
major changes are summarised hereafter:
INHERITANCE AND GIFT TAX
The
major legislative changes that were introduced by the ‘Loi TEPA’ in
August 2007 provided for an annual indexation of the inheritance and
gift tax allowances and sliding scales. The main elements have thus
been revised as follows:
Tax
free allowance for ascendants (parents) and descendants (children):
Increased from 150,000 Euros to 151,950 Euros per beneficiary
Tax
free allowance for a handicapped beneficiary:
Increased from 150,000 Euros to 151,950
Euros per beneficiary
Tax
free allowance for brothers and sisters:
Increased from 15,000 Euros to 15,195
Euros per beneficiary
Tax
free allowance for nieces and nephews:
Increased from 7,500 Euros to 7,598
Euros per beneficiary
Tax
free allowance between spouses or ‘PACS’ partners (gift tax for inter
vivos transfers not covered by the new exoneration from inheritance
tax):
Increased from 76,000 Euros to 76,988
Euros
Tax
free allowance between those who do not benefit from a specific
allowance (including non-relatives):
Increased from 1,500 Euros to 1,520
Euros per beneficiary
Sliding scale between ascendants and descendants:
|
Not exceeding
7,699 Euros |
5% |
|
Included between: |
|
|
7,699 Euros and 11,548 Euros |
10% |
|
11,548 Euros and 15,195 Euros |
15% |
|
15,195 Euros and 526,760 Euros |
20% |
|
526,760 Euros and 861,050 Euros |
30% |
|
861,050 Euros and 1,722,100 Euros |
35% |
|
Above 1,722,100 Euros |
40% |
Sliding scale between spouses and ‘PACS’ partners (gift tax for inter
vivos transfers not covered by the new exoneration from inheritance
tax):
|
Not exceeding 7,699 Euros |
5% |
|
Included between: |
|
|
7,699 Euros and 15,195 Euros |
10% |
|
15,195 Euros and 30,390 Euros |
15% |
|
30,390 Euros and 526,670 Euros |
20% |
|
526,670 Euros and 861,050 Euros |
30% |
|
861,050 Euros and 1,722,100 Euros |
35% |
|
Above 1,722,100 Euros |
40% |
Sliding scale between brothers and sisters:
|
Not exceeding 23,299 Euros |
35% |
|
Above 23,299 Euros |
45% |
INCOME TAX
The new
income tax sliding scale for 2008 (applicable to tax returns relating to
2007) is as follows:
0% not exceeding 5 687 € (previously
5 614 EUR)
5.50 % between 5 687 €
and 11 344 €
(previously 11 198 EUR)
14 % between 11 344 €
and 25 195 €
(previously 24 872 EUR)
30 % between 25 195 €
and 67 546 €
(previously 66 679 EUR)
40 % above 67 546 € (previously
66 679 EUR)
WEALTH TAX
The
ceiling for wealth tax has been raised. For wealth tax due in 2008, the
ceiling above which this tax is payable is now 770,000 Euros. The bands
have been adjusted as follows:
Between 770,000 Euros and 1.240.000
Euros = 0.55% (previously 1,220,000 Euros)
Between 1.240.000
Euros and
2.450.000 Euros = 0.75% (previously
2,420,000 Euros)
Between 2.450.000 Euros
and 3.850.000 Euros
= 1% (previously 3,800,000 Euros)
Between 3.850.000
Euros and
7.360.000 Euros = 1.3% (previously
7,270,000 Euros)
Between 7.360.000 Euros
and 16.020.000 Euros
= 1.65% (previously 15,810,000 Euros)
Above 16.020.000 Euros
= 1.8% (previously 15,810,000 Euros)
Other
measures, including the changes to capital gains tax on the sale of
shares and the deductibility of mortgage interest from income tax, will
be the object of further commentary in due course.
10/01/2008
- Legal
update
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