The deputy Emmanuelle Ménard submitted to the National Assembly on January 19, 2021, a bill aimed at strengthening the “Madelin” tax exemption system. Let us hope that this will be examined by the Finance Committee and that it be adopted by the deputies.
It is recalled that a tax reduction is granted to individuals who make payments for the cash subscription to the initial capital or to capital increases of certain small and medium-sized enterprises (SMEs). In the context of the current difficulties of French companies, which are facing the slowdown in economic activity linked to the health crisis, this bill is particularly welcome.
Currently, the taxpayer can benefit from an income tax reduction of 18% – this rate having been increased to 25% for payments made until December 31, 2021 – sums invested each year in the capital of an SME . Payments are withheld within the limit of 50,000 euros for single people and 100,000 euros for a couple married or linked by a PACS and subject to joint taxation. The maximum tax reduction is therefore theoretically 18,000 euros – or 25,000 euros -, but it is in reality reduced annually to 10,000 euros because of the scope of the cap on tax benefits.
Emmanuelle Ménard therefore wishes to improve the system in order to encourage taxpayers to invest in the French real economy. For this, it proposes that the rate of the tax reduction be increased from 25% to 30%, that the limits of 50,000 euros and 100,000 euros be respectively raised to 75,000 euros and 150,000 euros and above all, to bring out the reduction of tax capping tax benefits.
If his bill is accepted, the tax benefit, for taxpayers taking the risk of investing in SMEs, could reach 22,500 euros for a single person and 50,000 euros for a married or civil partnership.
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