Solidarity tax on wealth

The solidarity tax on wealth (French: Impôt de solidarité sur la fortune or ISF) is an annual direct wealth tax on those in France having assets in excess of €1,300,000, (since 2011) . It was one of the Socialist Party's 1981 electoral program's measures, 110 Propositions for France. First named IGF (Impôt sur les Grandes Fortunes), it was abolished in 1986 by Jacques Chirac's right-wing government, but re-established in 1988 as ISF in slightly different terms after François Mitterrand's re-election.

The calculation applies to tax declarers, meaning that it can apply to a grouping of two individuals: married couples, cohabiting couples, or couples with a PACS. All global assets are taken into account for French residents; for others, the tax is based on assets that reside in France, with the exception of financial ones.

ISF is controversial; critics claim it drives away wealthy individuals from the country, resulting in financial loss. A report by a senator estimated that 843 people left France in 2006 because of the tax, resulting in a net loss of €2.8 billion.

In principle all assets are taken into account except for the following:

ISF brought in €4.42 billion in 2007, 19% more than in 2006. It constitutes 1.5% of France's total tax receipts.

Half of all households who pay ISF make an annual contribution of less than €2,000.

ISF is levied on what remains of the gross value after subtracting deductible debts. The gross value is determined by the declarer following certain rules. For example, the value of the principal home is reduced by 30%, as is done for some rental income. Certain real estate properties in countries with a fiscal convention such as Denmark, Luxembourg, Egypt, Finland, Netherlands, and Czech Republic are excluded. The furniture in the home cannot exceed 5% of the total value of the other goods.

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