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France — Temporary employment agencies consider legal appeal against new tax

01 December 2009

The Association of Temporary Employment Agencies (PRISME) is considering an appeal to the Constitutional Council of France over the unfairness of replacing the current Professional Tax (Taxe Professionnelle) with a new local tax, which will penalise temporary employment agencies which currently have a turnover of less than 7.6 million Euro.

The new Territorial Economic Contribution (CET), which has been approved by both chambers of parliament is expected to multiply tax contributions for small and medium-sized companies in labour intensive sectors, such as temporary employment, by a factor of 7.

The new tax system is aimed at modernising and improving the local tax system of France but has the side effect of increasing labour cost. The more people a company employs, the more tax it pays, which will disproportionally hurt small and medium-sized temporary employment agencies.

PRISME says in a statement "we regret that at a time of increased unemployment the National Assembly (Lower House) and now the Senate (Upper House) penalise those who employ people when they should be doing exactly the opposite."

"Bringing in the CET tax will hurt local [temporary employment] firms, which play an important role in finding employment for people, not least for those with disabilities. This will be a fiscal electroshock for hundreds of companies which might not survive."

"Increasing tax by an average factor of 7 for an entire industry sector constitutes a disruption of the social contract (contrat social) and the principle of equality before the tax authorities. PRISME reserves the right to appeal to the Constitutional Council to evaluate [the legality of the new tax]."



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