The Finance Act for 2023 is published!

Some parliamentarians contested some of its provisions before the Constitutional Council, but the latter has almost entirely approved it.

You find below the main measures introduced by this law impacted by inflation and the energy crisis.

The income tax scale increase

Due to inflation, the limits of the brackets of the 2022 income tax scale, applicable in 2023, are subject to a significant 5.4% increase.

Maintaining the tariff shield

In 2023, the increase in gas and electricity tariffs is limited to 15% for individuals as well as for VSEs (less than 10 employees, turnover below €2 million) that have an electricity meter with a power of less than 36 kVA.

Namely: a plan called “electricity shock absorber” is set up for VSEs and SMEs (less than 250 employees, turnover below €50 million or balance sheet total below €43 million) not eligible for the tariff shield. Besides, a “gas and electricity” aid can be granted to energy-intensive companies.

Phasing out of CVAE

The Company Value Added Contribution (CVAE(1)), a major relief measure for companies, will disappear within 2 years: it is halved for 2023 before being completely abolished as of 2024.

Note: Correspondingly, the cap rate of the territorial economic is lowered from 2 to 1.625% for 2023 according to the amount of the VAT. Then, this rate, which will only concern the business property assessment (CFE), will fall to 1.25% as of 2024.

Extension of the reduced corporate tax rate

SMEs whose turnover (excluding tax) does not exceed €10 million benefit from a reduced corporate tax rate of 15% (instead of 25%). Until now, this reduced rate concerned taxable profit per 12-month period not exceeding €38,120. For the taxation of the results of the fiscal year ended on or after December 31, 2022, this profit ceiling is increased to €42,500.

(1) Cotisation sur la valeur ajoutée des entreprises