French tax on startups

I'm tired of this BS being spread by ppl who didn't even read the finances law in question (at least bullet points). It's not true, the 60% tax rate comes from the creation of a new bracket in the income tax and the treatment of selling your startup as income. To attain 60% you 1) need to sell for more than 150k 2) count all the acquisition money as instant revenue 3) do not intend to invest. And in fact, you have decreasing income tax if you sell assets you were bound to for 2 years (5%) and increasing up to 40% (on the 45% income tax...) for 12 years and more. If you invest 80% or more of the amount you earn, you don't have this tax, the same if you sell to retire... And don't even get me started on the "auto-entrepreneur" status which is a joke (that needs to end).

Re: French tax on startups

#4

Post by snippyhollow » Sat, Oct 20, 2012, 12:46 PM UTC

snippyhollow wrote: post #3

I'm tired of this BS being spread by ppl who didn't even read the finances law in question (at least bullet points). It's not true, the 60% tax rate comes from the creation of a new bracket in the income tax and the treatment of selling your startup as income. To attain 60% you 1) need to sell for more than 150k 2) count all the acquisition money as instant revenue 3) do not intend to invest. And in fact, you have de…

Let's be clear: I'm not agreeing with the government's policy (at least it's now not blatantly racist): I'm not agreeing with everything in the proposed tax scheme, I'm not agreeing with the entirety of the distribution of the spending, and I'm not agreeing with their lack on direction. I'm also not agreeing on bullshit being spread by a group of clueless persons on Facebook and being spread by rudebaguette and the like for clicks. If you want to tell tall stories, good for you, it can be interesting, you'll have plenty of stories to count because the combinatorics are gigantic, but don't call yourself a journalist. /rant

Re: French tax on startups

#5

Post by andrewcooke » Sat, Oct 20, 2012, 1:03 PM UTC

so if the money is reinvested, as it presumably would be by vcs, this doesn't apply?

Re: French tax on startups

#6

Post by martinced » Sat, Oct 20, 2012, 1:04 PM UTC

France is destroying its future wealth and its destroying it fast.

It's already one of the country with the most obstacles when you want to create a business: there are laws at basically every "level of power" and because it's one of the most socialist country of the planet (despite them always saying neo-liberal are supposedly in power) there are a great many level of powers. It's mad. Consider yourself lucky if you want to start a technology startup: it's relatively "easy" compared to, say, wanting to create a factory.

Why are there no french Google, FaceBook, Oracle, IBM, Microsoft, Amazon, eBay, etc.?

And the people defending these socialists are intellectually dishonest: we're assisting at the utter failure of the nanny-state (think socialist Greece and socialist Spain that skyrocketed the debt and drove the country into the wall) and yet the socialist manage (by propaganda, being basically in control of both written and televisualized press) to make believe it's all the fault of the liberals.

This is sick. Just sick.

Now I'm fighting teeth and nails to get my point across: if you're a french entrepreneur, do like me: leave your country. We're in a world where, thankfully, people are still free to move. So move while you can. Incorporate your startup in Luxembourg (like Skype did). Incorporate in Switzerland.

Flee France. That country doesn't deserves you nor the future wealth you're going to create.

Re: French tax on startups

#7

Post by VSerge » Sat, Oct 20, 2012, 1:09 PM UTC

andrewcooke wrote: post #5

so if the money is reinvested, as it presumably would be by vcs, this doesn't apply?

VCs have funds with limited timespan. They can't reinvest endlessly. And either way, an investor needs to have a decent measure of liquidity in order for said investment to be attractive, so locking it down even more than it already is would be counterproductive.

Re: French tax on startups

#8

Post by VSerge » Sat, Oct 20, 2012, 1:11 PM UTC

snippyhollow wrote: post #3

I'm tired of this BS being spread by ppl who didn't even read the finances law in question (at least bullet points). It's not true, the 60% tax rate comes from the creation of a new bracket in the income tax and the treatment of selling your startup as income. To attain 60% you 1) need to sell for more than 150k 2) count all the acquisition money as instant revenue 3) do not intend to invest. And in fact, you have de…

I did read the article 6 of the finances law on which my article comments. I'm unsure you have. I am sure however that you neither read my article, or any of the many explaining why this 60% top bracket is significant, ie for investors who are an essential part of the startup ecosystem, and make their money only on a few big hits with large payouts.

Re: French tax on startups

#9

Post by flyinglizard » Sat, Oct 20, 2012, 1:38 PM UTC

France is doing us foreigners a big favor by taking on an experience in wealth redistribution through extreme taxation. It takes some balls to do something that may destroy your economy to this extent.

We should all thank the French voters who took on the risk to put this government in control.

(I think it'll end in tears, but it will serve to deter the voters in other countries the next time they think of starting a class warfare against their entrepreneurs)

Re: French tax on startups

#10

Post by davidw » Sat, Oct 20, 2012, 1:44 PM UTC

martinced wrote: post #6

France is destroying its future wealth and its destroying it fast. It's already one of the country with the most obstacles when you want to create a business: there are laws at basically every "level of power" and because it's one of the most socialist country of the planet (despite them always saying neo-liberal are supposedly in power) there are a great many level of powers. It's mad. Consider yourself lucky if you…

Don't the Nordic countries have a lot of taxes? They seem to do ok in the startup scene. My wild guess - I don't know how things are 'on the ground' in either France or the Nordic countries - is that France tends to have more bureaucracy like here in Italy. So that it's not just a matter of "make some money, pay X in taxes" which is pretty easy to reason about, and somewhat "fair" (even if we all have different opinions) if you're paying taxes on profits, but rather feeling like the system is full of obstacles and people who are either indifferent or actively hostile towards the idea of someone opening a business.