Overview

There is no doubt that business tax reform is a major issue in the 2010 finance bill adopted by the President and his cabinet. As expected, the Bill cancels the business tax starting in 2010 and introduces its counterpart, a new regional tax known as the contribution économique territoriale (CET).

This CET should include two taxes applied in combination – a local equipment tax and an additional contribution.

The local equipment tax (Cotisation locale d’équipement or CLA) should be based on the rental value of assets liable to land tax. This taxation should result in maintaining the business tax portion based on such assets. The new development is that business activity based on the rental or subletting of buildings other than unfurnished buildings intended for housing, or for which income does not exceed €100,000, now enters the scope of the CLA.

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