Solidarity tax on wealth

The solidarity tax on wealth (in French, "L'impôt de solidarité sur la fortune" or ISF) is a French annual direct wealth tax on those having assets in excess of €760,000 (as of 1 January 2007). It was one of the Socialist Party's 1981 electoral program's measures, titled 110 Propositions for France.

Scope

The calculation applies to tax declarers, meaning that it can apply to a grouping of two individuals in cases such as marriage, couples living together or PACS. For French residents all global assets are taken into account, whereas for others the tax is based on assets which reside in France with the exception of financial ones.

Basis

In principle all assets are taken into account except for the following:
* professional goods such as enterprises (depending on the percentage owned),
* vintage (more than one century old) and collection objects,
* artistic, literature or industrial rights,
* woods and participation in forestry plantations (for three quarter of their value),
* anonymous bonds,
* capital value of pensions and retirement plans,
* income obtained as compensation for physical injury in accidents or due to illness,

Rules to fix the net taxable value

The value is the net one, i.e. what remains of the gross value after having subtracting the deductible debts. The gross value is determined by the declarer following certain rules. For example, the value of the principal home is reduced by 20% as is done for some specific rent incomes. Certain real estate properties in countries with a fiscal convention such as Denmark, Luxembourg, Egypt, Finland, Netherlands, Czech Republic are not taken into account. The furniture of the home cannot exceed 5% of the total of the other goods.

Following Sarkowzy's new tax law of 2007, the ISF is adjusted such that the sum of the wealth tax and all othertaxes due in France does not exceed 50% of the annual revenues.

2004 rates

From this result a deduction is granted for minors or any disabled persons living in the same household.