The government plans to include in the next finance bill (PLF) a measure to tax companies that buy back their own shares, a tax system which would be retroactive to 2024 and should bring in several hundred million euros, says Le Figaro in his edition on Thursday.
Faced with the spiraling public deficit in 2023, the government has already warned of a budgetary tightening, but is also seeking to increase its revenues. To this end, he is studying a tightening of the tax on the super profits of energy companies, and has also mentioned the potential of taxing share buybacks, without giving more details so far.
According to the daily Le Figarothe measurement will appear in the next finance bill for 2025and the government would like it to be retroactive, share buybacks in 2024 giving rise to taxation in 2025.
it could be 1% or it could be more, the decisions will be taken during the arbitration of the finance bill
Concerning the rate of this tax, it could be 1% or it could be more, the decisions will be taken during the arbitration of the finance bill in the summer, affirms an anonymous source cited by the newspaper, affirming that the Minister of The economy counts on several hundred million euros in revenue.
Share buybacks are a way of remunerating shareholders because companies often destroy them after the buyback, which automatically increases the market value of the remaining shares. Critics argue that this money could otherwise benefit employees or remain in the company’s capital.
The conclusions of a working group expected at the end of June
Prime Minister Gabriel Attal has tasked four majority deputies, including Renaissance deputy Nadia Hai, with working on new avenues for taxing income. When questioned, the latter indicated at the beginning of April that it wanted a tax system on share buybacks of large companies. The working group’s conclusions are expected at the end of June.
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According to the Janus Henderson barometer published on Wednesday, the main listed companies in the world repurchased $1,112.1 billion worth of their own shares in 2023, down 14% compared to 2022, a record year.
This remains well above pre-pandemic levels, the asset manager said in a press release, noting also that share buybacks have increased slightly in Europe. After the United States, the United Kingdom, Japan, Canada and France are the countries where share buybacks have been the most significant.
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