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Decision no. 2014-699 DC of 6 August 2014

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Supplementary Law on finances for 2014

In the conditions provided for by Article 61-2 of the Constitution, the Constitutional Council was seized of an application relating to the Supplementary Law on finances for 2014 on 24 July 2014 by Mr Christian JACOB, Mr Yves ALBARELLO, Mr Julien AUBERT, Mr Olivier AUDIBERT-TROIN, Mr Sylvain BERRIOS, Mr Étienne BLANC, Ms Valérie BOYER, Mr Dominique BUSSEREAU, Mr Jérôme CHARTIER, Mr Luc CHATEL, Mr Guillaume CHEVROLLIER, Mr Alain CHRÉTIEN, Mr Dino CINIERI, Ms Marie-Christine DALLOZ, Mr Lucien DEGAUCHY, Mr Rémi DELATTE, Mr Jean-Pierre DOOR, Ms Marianne DUBOIS, Ms Virginie DUBY-MULLER, Mr Daniel FASQUELLE, Mr Georges FENECH, Ms Marie-Louise FORT, Mr Yves FOULON, Mr Claude de GANAY, Mr Sauveur GANDOLFI-SCHEIT, Mr Hervé GAYMARD, Ms Annie GENEVARD, Mr Guy GEOFFROY, Mr Bernard GÉRARD, Mr Alain GEST, Mr Daniel GIBBES, Mr Georges GINESTA, Mr Claude GOASGUEN, Mr Philippe GOSSELIN, Ms Claude GREFF, Ms Anne GROMMERCH, Mr Serge GROUARD, Mr Jean-Claude GUIBAL, Mr Patrick HETZEL, Mr Denis JACQUAT, Mr Christian KERT, Mr Marc LAFFINEUR, Mr Jean-François LAMOUR, Ms Isabelle LE CALLENNEC, Mr Marc LE FUR, Mr Pierre LELLOUCHE, Mr Jean LEONETTI, Mr Pierre LEQUILLER, Mr Céleste LETT, Ms Geneviève LEVY, Ms Véronique LOUWAGIE, Mr Hervé MARITON, Mr Olivier MARLEIX, Mr Philippe MEUNIER, Mr Jean-Claude MIGNON, Mr Yannick MOREAU, Mr Pierre MOREL-A-L'HUISSIER, Ms Dominique NACHURY, Mr Patrick OLLIER, Ms Valérie PÉCRESSE, Mr Bernard PERRUT, Mr Edouard PHILIPPE, Mr Jean-Frédéric POISSON, Mr Didier QUENTIN, Mr Frédéric REISS, Mr Franck RIESTER, Ms Sophie ROHFRITSCH, Mr Martial SADDIER, Mr François SCELLIER, Mr Jean-Marie SERMIER, Mr Thierry SOLÈRE, Mr Claude STURNI, Mr Lionel TARDY, Mr Jean-Charles TAUGOURDEAU, Mr Jean-Marie TETART, Mr Patrice VERCHÈRE, Mr Philippe VITEL, Mr Éric WOERTH, Ms Marie-Jo ZIMMERMANN, Mr Charles de COURSON, Mr Jean-Christophe LAGARDE and Mr Philippe VIGIER, Members of the National Assembly.

THE CONSTITUTIONAL COUNCIL,

Having regard to the Constitution;

Having regard to Ordinance no. 58-1067 of 7 November 1958 as amended, concerning the Basic Law on the Constitutional Council;

Having regard to Basic Law no. 2001-692 of 1 August 2001 on finance laws along with Ruling no. 2001-448 DC of 25 July 2001 of the Constitutional Council;

Having regard to the Crafts and Trade Code;

Having regard to the General Tax Code;

Having regard to Law no. 2011-1977 of 28 December 2011 on finances, amended for 2012;

Having regard to opinion no. 2014-03 of 5 June 2014 of the High Council of Public Finances on draft supplementary finance bills and the supplementary financing of social security for 2014;

Having regard to the observations of the Government, registered on 31 July 2014;

Having heard the Rapporteur;

1. Considering that the applicant Members of the National Assembly have referred to the Constitutional Council the Supplementary Law on finances for 2014; that they dispute its sincerity; that they also question the constitutionality of Article 9 thereof;

–SINCERITY OF THE SUPPLEMENTARY LAW ON FINANCE:

2. Considering that the applicants assert that the Supplementary Law on Finance for 2014 is insincere, taking account of the opinion of the High Council of Public Finances; that they also assert that the amendments made to the core Article upon examination during the first reading before the National Assembly had the effect of distorting the macro-economic premises on which the provisions of the Law were based, which had the effect of altering the sincerity of the debates conducted before the Senate during the first reading;

3. Considering that pursuant to Article 32 of the aforementioned Basic Law of 1 August 2011: "Laws on finance shall present in a sincere manner all resources and expenditure of the state. Their sincerity shall be assessed taking account of the information available and the forecasts that may reasonably result from these"; that it follows that the sincerity of the Supplementary Law on finances is conditional upon the lack of any intention to distort the broad framework of the balance struck by it;

4. Considering in the first place that it is not evident either from the opinion of the High Council of Public Finances or the other information submitted to the Constitutional Council that the economic projections for 2014 on which the Law referred is based are affected by any intention to distort the broad framework of its balance;

5. Considering secondly that the amendments made to the core Article during the first reading before the National Assembly have not had the effect of preventing the Senate from establishing and assessing the macro-economic forecasts on which the Law referred is based;

6. Considering that according to the above, the objections alleging that the Supplementary Law on finances for 2014 is insincere must be rejected;

– ARTICLE 9:

7. Considering that Article 1601 of the General Tax Code concerns the additional tax to the corporate property tax; that this tax is comprised of three elements: a fixed levy per taxpayer, an additional levy to the corporate property tax and an additional levy per taxpayer; that the second subparagraph of Article 1601 provides that the proceeds of this tax, which is due from sole proprietors and companies subject to a requirement of inclusion in the register of professional traders, is allocated to the chambers of trade and craft industries up to an individual ceiling, which is fixed with reference to a global ceiling as provided for under paragraph I of Article 46 of the aforementioned Law of 28 December 2011; that the third subparagraph of Article 1601 provides that the aforementioned individual ceiling is to be calculated "on a pro rata basis in line with the payments received" by the chambers of trade and craft industries included in the general rolls for the previous year to the reference year;

8. Considering on the one hand that paragraph II of Article 9 amends Article 5-8 of the Crafts and Trade Code to establish a fund for financing and backing the network of chambers of trade and craft industries; that this fund is intended to provide them with a collective resource for implementing pooling and mandatory restructuring operations or those decided by the general assembly of the Standing Assembly of the Chambers of Trade and Craft Industries, which is responsible for its management;

9. Considering on the one hand that paragraph I of Article 9 provides that the ceiling applicable to the allocation of the proceeds of the additional tax to the corporate property tax is comprised of two sub-ceilings, the first of which applies to the sum total of the proceeds of the first two components of this tax, and the second to the proceeds of its third component; that these two sub-ceilings are calculated with reference to the respective importance of the components of the tax; that, for the purposes of applying the first sub-ceiling, a levy is charged in favour of the general state budget on the aforementioned fund for financing and backing; that this levy represents the difference between the amount of the first sub-ceiling and the sum total of the tax income received by the chambers of trade and craft industries in receipt of the first two components of the tax; that the fund for financing and backing will be supported in 2014 by a levy charged to the chambers of trade and craft industries, the working capital of which at the end of 2012 (disregarding reserves earmarked for investments that have been approved and formally validated by the administrators) exceeds four months of expenditure; that, for the chambers concerned, this levy will amount to 50% of the part of working capital in excess of four months of expenditure, disregarding earmarked reserves;

10. Considering that, according to the applicants, the provisions of Article 9 violate the fifth subparagraph of Article 34 of the Constitution and the principle of the non-retroactivity of tax law;

11. Considering that the applicants assert that the levy charged in favour of the general state budget on the working capital of the chambers of trade and craft industries concerned through the fund for financing and backing created by Article 5-8 of the Crafts and Trade Code has the status of a tax of any nature; that they assert that in taking the concept of "excess working capital" as the basis for the said levy, in defining this basis in an imprecise manner, in subjecting its determination to the completion of complex calculations and in allocating to the Standing Assembly of the Chambers of Trade and Craft Industries the task of setting the amount of this tax, the legislator violated the provisions of the fifth subparagraph of Article 34 of the Constitution;

12. Considering that, according to the applicants, in providing that the amount of the levy charged against the resources of the chambers of trade and craft industries in 2014 in order to boost the fund for financing and backing is to be based on accounting figures from 2012, the legislator violated the requirements of Article 16 of the 1789 Declaration of the Rights of Man and the Citizen;

13. Considering that the levy charged on the working capital of the chambers of trade and craft industries concerned via the aforementioned fund for financing and backing is intended to ensure the transfer to the general budget of the state of a portion of the proceeds of the additional tax to the corporate property tax, which is allocated to the chambers of trade and craft industries; that this levy does not have the status of a tax of any nature; that accordingly, the allegations alleging that the fifth subparagraph of Article 34 of the Constitution and the principle of the non-retroactivity of tax law have been violated are misconstrued; that accordingly, the provisions of Article 9 must be ruled constitutional;

14. Considering that there are no grounds for the Constitutional Council to raise any question of compatibility with the Constitution ex officio,

HELD :

Article 1 .– Article 9 of the Supplementary Law on finances for 2014 is constitutional.

Article 2. This ruling shall be published in the Journal officiel of the French Republic.

Deliberated by the Constitutional Council in its session of 6 August 2014, sat on by: Mr Jean-Louis DEBRÉ, President, Mr Jacques BARROT, Ms Claire BAZY MALAURIE, Ms Nicole BELLOUBET, Mr Guy CANIVET, Mr Michel CHARASSE, Mr Renaud DENOIX de SAINT MARC, Mr Valéry GISCARD d'ESTAING, Mr Hubert HAENEL and Ms Nicole MAESTRACCI.