Impact of Hollande's election on relocation yet to be determined, say EXPAT US
mardi, mai 15, 2012 at 1:41PM As François Hollande faces his first weeks in office as France’s new President, many international relocation professionals are asking themselves how his future policies may affect their sector.
Mr. Hollande has stated that if elected he will introduce major changes in various areas such as pensions and schooling.
As far as education is concerned, Mr. Hollande promised to create 60,000 and to reform higher education by strengthening the connections between different tertiary programs.
However, the big question of this Presidential election revolved around France’s deficit problem and the measures to take in order to reduce it. Amongst his many proposals on the matter, Mr. Hollande’s most ambitious proposal seems to be in the area of taxes.
As far as corporation taxes are concerned, the new President aims to introduce 35% tax on large enterprises, a 30% tax on medium enterprises and a 15% tax on small enterprise
He also promised to reform the income tax regime by imposing a 75% rate on individuals earning more than €1m a year and a 45% rate for those earning more than €150,000.
Caroline Scemama, Managing Director of Expat US, a relocation firm helping French people settle into the New York region, claims that these tax reforms could have a great impact on the French relocation industry.
According to Mrs. Scemama, “tax reform may scare away some citizens abroad. If this turns into a mass phenomenon, the themes of expatriation and expatriate management will more than ever be at centre-stage.
In case this occurs, relocation companies will therefore certainly be affected, as they will see their demand increase"
Mrs. Scemama continues by asserting that if confirmed, this scenario could probably overshoot the initial forecasts predicteding a 50% increase in the number of French expatriates by 2020.
Nonetheless, continues Mrs. Scemama, this scenario is only “very hypothetical” as there is no certainty on whether the new President will be able to deliver his ambitious promises.
Julie Lamoure, tax specialist for French law firm Dixit Causa, shares the same opinion. According to Mrs Lamoure, “there is a difference between the announcements made during the campaign and what could actually happen after the candidate is appointed.
The national assembly and the Senate must approve each law aimed at modifying France’s fiscal system under a rigid framework of checks and balances. Even though the President may have specific proposals, it is difficult to know how exactly will these be translated into specific legislation".
Therefore, it appears that whatever Mr. Hollande’s proposals may be, both of these mobility experts would advise to use caution when trying to assess how France’s relocation sector may change as a result of this appointment.
