Adopting an amendment filed by the Senate’s Finance Committee, the legislators decided to postpone by one year the adjustment of the property rental values of business premises used for the tax base for property taxes on buildings, the corporate property contribution and additional related taxes.

Article 34 of the 2010 Amending Finance Act had initially provided that the reference date for this adjustment would be January 1, 2012, taking into account the results to set the 2014 taxes.  In the end, the adjustment’s reference date is set at January 1, 2013, which will impact the setting of the tax bases for 2015.

In addition, and to the extent that only the bases of business premises will be adjusted, the legislature had instituted a correction mechanism in the form of a neutralization coefficient the purpose of which was to keep in the tax base the respective size of the business premises and industrial premises mentioned in Articles 1499 and 1501 of the French Tax Code.

The 2012 Amending Finance Act excludes industrial premises from the scope of the neutralization coefficient.  Hence, the neutralization coefficient will only keep the rental values of business premises in the given business’s tax base.

The new legislation also broadens the neutralization coefficient mechanism to the housing tax and the garbage removal tax, whereas only the property tax on buildings and the corporate property contribution were initially mentioned.

Lastly, the legislators decided to adopt a graduation mechanism for the 2015-2018 period in order to attenuate the variations expected in the amount of certain local taxes resulting from the adjustment of the rental values of business premises.

This graduation mechanism will be applicable to any increase by more than 200 euros and by more than 10% as compared with the taxes that would have been paid without the rental values adjustment.  The graduation will be implemented with an exemption equal to 4/5ths of such increase in 2015.  This exemption will then be reduced by 1/5th every year.  The cost of this graduation mechanism, which the State will pay, is supposed to be compensated with the creation of an additional tax on cigarettes.