This is a long-awaited report. Highly criticized by the left, the Dutreil pact, which reduces taxation on transfers of family businesses, has generated a loss of tax revenue of 5.5 billion euros in 2024, according to the newspaper the worldwho consulted a summary of a report from the Court of Auditors. The publication of this report on the Dutreil pact, established in 2003, is expected to take place within a few weeks, indicated on Thursday, October 23, the first president of the Court of Auditors, Pierre Moscovici. And while debates on the budget begin in the chamber, calls to reform this system are increasing.
The Dutreil pact allows, in particular, a 75% reduction in the value of a family business transmitted by gift or inheritance under conditions, and requires that the beneficiaries of the gift retain the titles received for several years with the aim of promoting “prolonged ownership of capital.” According to the summary of the report consulted by Le Monde, the Wise Men of Cambon Street point out that the system has never really been evaluated and that the “economic efficiency” of this mechanism that deviates from common law is “weak.”
The number of transmissions has doubled in ten years
According to the newspaper, the number of transmissions under the Dutreil pact doubled between the periods 2013-2016 and 2017-2023, and the progression continued in 2024, resulting in a loss of tax revenue of 1.2 billion euros in 2020 and 5.5 billion euros in 2024.
Furthermore, the companies that have been transferred through this regime come mainly from the “commerce and distribution sectors”, with a clear advantage over industry, although it is presented “as the main recipient of the system”. The Court of Auditors would also have observed that the investment percentages of the companies that benefited from this are approximately the same as those of the companies transferred otherwise, and “it also does not observe any notable effect on employment.”
The Wise Men of Cambon Street would recommend, in particular, reducing the reduction percentage by 75% if the company were resold just after the end of the period during which the beneficiaries must retain ownership, or extending this period. As the budget review in public session began this Friday afternoon, the Finance Commission of the National Assembly adopted several amendments to reform the system, for example by extending the minimum holding period for transferred shares. When requested, the Court of Auditors did not respond to the requests.
Source: BFM TV
