The Court has said that that article 12 of the 2013 budget, which institutes an exception solidarity contribution of 18% on income from activity in excess of EUR1 million (taking the marginal rate of tax to 75%), is based on individual income.
Additionally, the Court pointed out that the two fiscal households, benefiting from the same level of income from professional activity, could either be subject to the exceptional solidarity contribution or exempt from the levy, depending on the particular income distribution among taxpayers in the household.
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The move of the Court is after an appeal was submitted on 20 December 2012 by over 60 deputies and 60 senators, challenging the constitutionality of the government’s 2013 finance bill.
The Court states that the government had not taken into consideration the ability to pay, and therefore censured article 12 for breaching the principle of equality before public charges.
Also, though the Court has deemed that the government’s new marginal income tax rate of 45% is in accordance with the country’s constitution, it said that the new tax rate would serve to increase the marginal taxation of enhanced pensions in France, increasing taxation to 75.04% for those pensions collected in 2012, and to 75.34% for those collected from 2013.
Citing the fact that this new level of taxation and excessive charge is confiscatory, the Court said that the provisions are contrary to the constitution.
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By GlobalDataMeanwhile, the Court also censured plans to integrate latent profits or income, which the taxpayer has not yet collected, when calculating the cap on wealth tax (ISF), and has annulled the provision increasing the taxation of stock options and free shares.
