Will the “superprofits” reaped in recent months by certain large French companies end up being taxed, as is the case in several European countries? Prime Minister Elisabeth Borne said at the end of August that she did not want ” close the door “ to this option, but was quickly contradicted by the Minister of the Economy, Bruno Le Maire.
Since the summer, the idea has made its way among parliamentarians of all persuasions, including those of the majority. During the review of the amending finance bill in July, around fifteen amendments were tabled, but all were rejected. The Socialist Party intends to revive the subject in the coming days in the form of a popular initiative referendum, with the support of its partners in the New People’s Ecological and Social Union (Nupes).
- Which companies would be affected by an exceptional tax on superprofits?
The concept of superprofits has no clear definition or proven tax calculation method. It designates exceptional profits, made by windfall effect, linked to external factors which have inflated the profits of certain companies. The astronomical results announced in the first half of the year for large companies in the energy sector in the context of the crisis linked to the war in Ukraine, or those of large firms in the maritime freight sector taking advantage of supply chain tensions, are the perfect illustrations.
In the various amendments proposed in July, parliamentarians envisaged involving oil and gas companies and shipping companies. Motorway management companies were also affected by the socialist amendment, while the one deposited by the deputies of the Rassemblement national targeted all companies, without sectoral distinction. The size of the companies targeted also varied according to the proposals: from 100 million turnover for RN amendments and LIOT (Freedoms, independents, overseas and territories), against a billion euros in turnover for those of the socialists, environmentalists or “rebellious”.
If they had received a positive vote from parliamentarians, could these amendments have been applied? According to Martin Collet, professor of public law at Panthéon-Assas University (Paris-II):
“The Constitution does not say that you cannot tax profits twice. On paper, this kind of bill is not at all impossible and could pass the Constitutional Council. »
- What to tax and at what rate?
The method of calculating these exceptional profits, the level of taxation and the scope of the companies concerned presented substantial differences, according to the authors of the amendment.
Some proposals aimed to tax all profits, but most planned to apply the contribution only to the surplus realized in 2022, compared to one or two reference years. Almost all of the amendments envisaged a tax of up to 25%, with the exception of the RN which started with a rate of 50%. On the contrary, ” fallback amendment » filed by Eric Coquerel (LFI-Nupes) was content with 15%.
The amendment of the socialist deputy Christine Pirès-Beaune specified that such a tax would bail out the coffers of the State to the tune of 10 billion euros, by estimating the amounts at “about 4 billion euros for Total, 925 million euros for Engie, 4.4 billion euros for CMA CGM, and 875 million euros for motorway concessionaires”.
- What examples abroad?
Italy has introduced in the spring an extraordinary solidarity contribution for companies in the energy sector. This tax concerns companies that have experienced a sharp increase in the balance of purchases and sales, perceptible from VAT declarations. If this balance exceeds a certain threshold compared to the previous year, a 25% tax applies to this “exceptional profit” for companies producing, distributing and importing electricity, gas (natural or methane), or of petroleum products. It should bring in 10 billion euros to the Italian tax authorities for the year 2022.
Germany announced on Sunday September 4 want to introduce a compulsory contribution companies in the energy sector, while an aid plan of 65 billion euros has been drawn up to mitigate the effects of inflation. The German government has said it is in favor of the introduction of such a contribution at European level and wishes to bring the measure to Brussels on Friday during a meeting of the Twenty-Seven on energy prices. In tune, the President of the Republic, Emmanuel Macron, defended during a press conferenceMonday 5 September, the principle of a “European contribution mechanism that would be requested from energy operators. This contribution could then be transferred to the States to finance their targeted national measures”.
- Is a referendum possible on these tax issues?
After the failures suffered in Parliament in July, the national secretary of the Socialist Party, Olivier Faure, launched August 28 the idea of submitting the idea to a referendum of shared initiative (RIP). For this, the bill must be tabled by a fifth of the members of Parliament and then submitted to the Constitutional Council. According to Guillaume Tusseau, professor of public law at Sciences Po, “if this law does not present any incompatibility with the Constitution, which would be the case, for example, if it established a tax deemed confiscatory, there is no objection to the referendum taking place”.
Then, the proposal must be supported by 10% of voters, or about 4.8 million signatories to be gathered in nine months. It is only then, if Parliament has not considered it in the meantime, that the President of the Republic submits its adoption to a referendum.
“If we manage to pass the bar of the Constitutional Council, we will have, I think, the 4.8 million signatures necessaryhopes the socialist deputy Mme Pires-Beaune. It’s a way for us to put the pressure on, we’ll see what happens. We hope to have a validated text this week. »
- What other initiatives are underway?
As the RIP is a long and risky procedure (the last initiative, against the privatization of Aéroports de Paris, ended in failurefor lack of having collected enough signatures in the allotted time), the Nupes intends to multiply the initiatives to initiate a process of taxation of the superprofits before the end of the year 2022. “ The Italians were quick, I don’t see why we couldn’t do itinsists Eric Coquerel, MP “ insoumis” and chairman of the finance committee of the National Assembly. It is more a political decision than a technical decision. This is a campaign that we are going to mount during the fall. Our goal is to pass an amendment at the time of the finance bill. »
A “flash mission” on the taxation of superprofits, requested by the Assembly’s finance committee, led by two co-rapporteurs, Manuel Bompard, deputy for La France insoumise and David Amiel, deputy for Renaissance, must submit its conclusions at the beginning of October. A fact-finding mission on business taxation will then begin in the fall and should be completed after six months.
The question is mentioned even in the majority. Stella Dupont, member of the Renaissance group had also filed in July an appeal amendment (withdrawn before discussion) in order to open the debate within the Macronist deputies. “ The political subject is simple but the tax subject is complexanalyzes the MP for Maine-et-Loire. I am open to any solution. What matters to us is the sharing of the rent generated. »
The impossible taxation of the profits of multinationals made outside France
TotalEnergies said it generated 18 billion euros in profits during the 1er half of 2022. As in previous years, almost all of these come from its activities abroad (the company does not declare any in France). Thus, the profit made is subject to taxation in the country in which the activity was carried out. Impossible then for the French State to impose a second taxation, because the multinational would have legal recourse. ” It is the bilateral tax treaties which would be invoked by the companies concerned and which would block any possibility of taxation “, slice Martin Collet.
Bilateral tax treaties are “ international treaties aimed at preventing taxpayers – companies or individuals – from being taxed twice on the same income by two different countries, but also at combating fraud and tax evasion “, according the definition given by the Court of Auditors. Their application takes precedence over national and European law. France counts 126 bilateral tax treaties in force.
For instance, that signed with Nigeria in 1990where Total conducts part of its business, aims to “to avoid double taxation”. If Total pays taxes on its profits in Nigeria, then the multinational does not have to pay any in France.
” What could be taxed is another aggregate, such as turnover [chiffre d’affaires]“, emphasizes Martin Collet. Clearly, directly taxing the superprofits of multinationals is a measure that is difficult to apply; other means must be found to involve companies that generate superprofits.
Vincent Vicard, assistant to the director of the Center for Prospective Studies and International Information (CEPI) and working on the organization and taxation of multinational companies, recalls that a country today can only tax the share of profits of a multinational declared on its soil.
The reform of the taxation of multinationals which will come into force in 2023 will give the right to the country of origin of a multinational to tax the profits of all its subsidiaries up to 15%, in compensation for countries in which taxation is lower. For a rapid implementation of the taxation of surplus profits, he adds that“there is a technical fiscal dimension: what is put in place is often dictated by what is possible in the legal and legal system of each country, which significantly constrains a certain number of possibilities”.