This is not likely to reassure the leaders who were preparing for two years of drain – and no more. In the Finance Committee of the National Assembly on Wednesday October 16, deputies deleted from the text presented by the government the temporary nature of the taxation of high-income households. The executive had wanted to introduce a “sunset clause” or sunset clause, with a horizon considered reasonable of three years which should encourage large taxpayers to turn their backs rather than flee to Brussels or elsewhere.
Will the contribution requested from large companies remain “exceptional” or will it suffer the same fate? The finance bill will be examined from Monday in the National Assembly. In committee again, the left-wing deputies tried to perpetuate it beyond two years. Without success. But the parliamentary game remains open. This temporary increase in corporate tax (IS) must apply to some 440 groups generating more than a billion turnover in France in 2025 and 2026. “The measures announced by Michel Barnier correspond to an increase of corporate tax for the next two years of 31% for companies with a turnover of more than 3 billion euros in France and 15.5% for those whose turnover is between 1 and 3 billion euros”, specifies the Oddo BHF analysis office. The result is an expected revenue of 8 billion euros in 2025 and 4 billion in 2026, supposed to contribute to reducing the public deficit.
Luxury and aeronautics put to use
Without delay, LVMH opted for transparency – an exception to date. Tuesday evening, during an exchange with financial analysts following the publication of the quarterly figures, the financial director confided: the world number one in luxury will pay 700 to 800 million euros in additional taxes in title for the 2024 financial year alone. For the other French flagships, we must be content with estimates. Despite fragmented data on the tax base of large groups in France, Oddo BHF experts ran their Excel spreadsheets to assess the bill, which promises to be substantial for a handful of large groups.
According to their calculations, to which L’Express had access, the bill to be paid at Hermès would approach 345 million in 2025. The aeronautics sector would also be heavily involved: 368 million for Safran, 376 million for Airbus. The bill should also be steep for Vinci, in the order of 456 million. Especially since it comes in addition to the tax on the operation of long-distance transport infrastructures hitting motorway and airport managers such as Sanef, Eiffage or ADP, the principle of which was validated last month by the Constitutional Council. “It’s cheese and dessert,” protests a professional in the motorway sector. The tax on infrastructure operators was designed to make up for the reduction in the corporate tax rate from 33% to 25%, which benefited all companies during the first five-year term, a year later, this rate is going back up. This is bad news for us, but also for France: the State is sending the signal that it can take back what has been done with a snap of its fingers. he granted the day before.
Distributors feel wronged
At distributors too, the pill is having difficulty getting through. And for good reason: eligibility for the surcharge is based solely on the criterion of turnover. A choice experienced as an injustice in a sector where the sales volume is high by nature but the margins are narrow. “We could have accepted one or two additional IS points for everyone, or a weighting according to the level of profitability of the company. This increase is disproportionate. We are the largest employer in France. We should not know the tragic fate of the industry by loading the boat”, warns the general delegate of the Federation of Commerce and Distribution, Layla Rahhou. Around forty brands are concerned, the pain would amount to “several hundred million euros in total”.
To judge the consequences of the planned measure with regard to company results, analysts are interested in another indicator: the effect on net profit per share (EPS), a determining indicator for the stock price. Out of 88 listed companies scrutinized by his teams, Thomas Zlowodzki, head of equity strategy at Oddo BHF, notes that “the impacts are often weak. But we have identified around twenty whose EPS will fall by 4% to 8% in average over the next two years. The heavyweights of the CAC 40 are not the only ones affected: in addition to Eiffage, ADP and Dassault Aviation, the poultry of the LDC group (- 8.3%), temporary work at Synergie (- 8%) and Crit (- 6.9%), services at Derichebourg (- 6.3%). “What is clear is that companies which generate a lot of turnover in our country are more penalized than Danone or STMicroelectronics which do little, and whose costs linked to the head office are recorded in France”, points out the general director of the management company Moneta AM, Andrzej Kawalec. Suffice to say that TotalEnergies, whose activities, like profits, are very limited in France, will not be affected by the surcharge.
The acrobatics of big bosses
At Barclays, we nevertheless perceive a certain good will on the part of those subject to it. The fear of a bond shock prevails. “Companies prefer to cooperate with the government, considered pro-business, on the budgetary effort requested, rather than taking the risk of seeing rates soar in the event of a blockage,” explain Emmanuel Cau and Emmanuel Makonga, from the European Equity Strategy team of the British bank. With the hope of resolving the budgetary problem and ultimately finding room for maneuver to revive the economy.
But as the bill increases, the speeches of big companies become more grating. We fear an attack on competitiveness, a brake on investments, a negative effect on employment and purchasing power, cascading repercussions among subcontractors… An employer representative gets annoyed: “Okay, everyone must take its part. Ultra-targeted and one-off measures could be conceived, but we were sold a plan – two-thirds savings, one-third tax increases – which is no longer entirely fair. is moving more towards a 50/50. We are therefore looking back on ten years of a policy which had nevertheless produced results. Because the IS surcharge is combined with the questioning of reductions in charges on low salaries. An increase in labor costs which will weigh particularly on manufacturers.
“We must expect that optimization mechanisms will be activated”, by carrying forward deficits for example, estimates this same source, even if the room for maneuver for the current year, already well advanced, appears limited . The revenues expected by the government, which are based on the 2023 accounts, would then become uncertain, especially for 2025. In any case, for Thomas Zlowodzki, this tax pressure constitutes a hard blow for the French economy. France’s credibility vis-à-vis international investors and rating agencies, which ensure the stability of the regulatory framework, is also at stake. “China, the American election… Several subjects are currently diverting attention, notes the Oddo BHF strategist. But once this budget is passed, Franco-French questions will return: when will the next dissolution take place? What will it be? the poster for the second round of the 2027 presidential election? In this political fog, bosses are asked to keep one hand firm on the rudder, while putting the other in their pocket. Acrobatic.
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