Businesses, economic stimulus measures as of January 1, 2021

New measures to boost economic activity came into effect on 1 January 2021. As every year, the new year is an opportunity to discover the new rules applicable to companies. Lower taxes, increased capital, hiring aid… This year, all economic measures are in line with the Recovery Plan.

Tax cuts to help the economy recover

The tax cuts announced on January 1, 2021 relate to both corporate and production taxes.

Thus, the Finance Act gives the conditions for lowering corporate taxes. This reduction in the IS rate affects all companies but adapts according to their turnover. Anticipating a long-term need, the government is already making commitments for 2022 included.

A first corporate tax cut will therefore take place as early as this year. For companies with a turnover of less than 250 million euros, the IS rate drops to 26.5%. For those with a higher turnover, it drops to 27.5%. For the future, in 2022, the IS should be reduced to 25% regardless of size or turnover.

In addition to these new measures to stimulate the economy, the Finance Act maintains the reduced rate for SMEs by 15%. This reduced rate of IS applies to businesses with a non-tax turnover of less than 7.63 million euros in 2020 and 10 million euros in 2021.

In addition to the lowering of the IS rate, the Finance Act also announces lower production taxes. According to the government, this should represent a reduction of 10 billion euros in 2021. To achieve this, the CVAE is down 50%; The calculation of property taxes is based on a reassessed accounting method; the territorial economic contribution increases from 3 to 2%; the possibility of increasing the CFE exemption for new establishments and extensions by 3 years.

corporate equity boosts economy
Lower taxes and improved capital to boost the French economy.

Strengthening corporate capital

To enable companies to bail themselves out,build up cash and be able to invest, the state is putting in place schemes to facilitate borrowing. These measures mainly concern SME/SME and ETI.

Thus, in addition to the financial aid provided so far, such as the PGE, the State is planning new arrangements. In particular, it offers guarantees for investments labelled “France Relance”. On this point, 150 million euros are released.

He also came to be a reinsurance actor with the banks. To facilitate the granting of financing via crowdfunding loans,the State proposes a guarantee to the tune of 2 billion euros.

Always to strengthen the capital of SME/SME and ETI, it offers partial activity solutions. The government has therefore put in place a long-term partial activity scheme,more suited to the long-term economic crisis. More flexible, it allows employers and employees to protect themselves more, avoiding the need for redundancy plans. This long-term partial activity can take up to 24 months. It provides compensation equal to 70% of gross salary up to 4.5 SMIC. 80% of the salary is paid by the state.

Aid for employment, economic recovery through skills

The state is setting up aid for hiringand training. In particular, it encourages training for employees in part-time work. To do this, it bails out the national employment fund by 1 billion euros. The same goes for young people. Public mainly affected in times of crisis, the Government wishes to allocate additional resources for the training of young people according to the skills required in the labour market.

recruitment young helps hire recovery economy
In continuity, the government is strengtheningthe exceptional assistance for the hiring of under-26s.

Through this exceptional support schemefor the hiring of young people,it aims to reach 580,000 new recruitments of young people, 100,000 of them by 2021. In total, the Finance Act spends 1.1 billion euros. Beware, however, this assistance in hiring young people is valid under certain conditions, starting with the dates. Thus, it relates to contracts signed between August 1, 2020 and January 31, 2021.

The government is also working to stimulate recruitment on alternating contracts. The Finance Act therefore provides for the funding of aid for the learning and professionalisation of young people. Applying from the first year of employment, these aids are therefore valid for apprenticeship contracts as well as for professionalisation contracts. This hiring assistance allows the employer to receive up to 5,000 euros for an apprentice under the age of 18, and up to 8,000 euros for a major apprentice preparing for a diploma until the master’s degree.

Export and digital, boosting the recovery of economic activity and competitiveness

In addition to these generic measures, the stimulus package and the finance law provide more specific mechanisms for the recovery of the economy. These include exporting companies, as well as the digitalisation of the economy.

On the exportside, the finance law dedicates 247 million euros to boost the competitiveness of French companies internationally. Among the schemes put in place is the creation of an “export cheque” to finance up to half of the cost of attending an international trade show, for example. Or a VIE cheque (International Corporate Volunteering) of 5000 euros for SMEs and ETIs using it.

As far as exports are concerned, aid is not just financial. Therefore, the State, through Business France, offers strategic tools such as information monitoring of export markets in order to enable companies to act in real time.

Another major issue in today’s economy is digitalization, which is at the heart of the concerns. To modernise the territories, the State is spending a budget of 1.5 billion euros on the implementation of digital tools. He is of course continuing his digital awareness activities with France Num, but also proposes some concrete actions.

This includes the real support of companies in the implementationofartificial intelligence tools for production. It should be noted, however, that this only applies to companies that are already relatively mature on the subject. It also proposes a grant for investments in future technologies for SMEs and industrial ETIs.

On the digital side, state intervention still appears to be very limited. For good reason, the majority of the economic fabric is not industrial, it is clear that it still needs to pass the threshold of digitalization. If only on more basic issues such as the animation of a website or the setting up of a CRM.

Source

Businesses: what changes on January 1, 2021, economie.gouv.fr

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