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France/Germany/tax/social security

Published on March 7, 2011
Cour des Comptes¹ report comparing tax and social security deductions in France and Germany – Communiqué issued by the Presidency of the Republic

Paris, March 4 , 2011

President Sarkozy today held a meeting with the First President of the Cour des Comptes, who handed him the report on tax and social security deductions in Germany and France.

Following the Council of Ministers’ meeting of 21 July 2010, attended by German Finance Minister Wolfgang Schäuble, President Sarkozy asked the Cour des Comptes to draw up an assessment of the French and German tax systems, with a view to taking decisions leading to greater convergence in the fields of both business and personal taxation.

Whereas the rate of obligatory deductions in France is three percentage points higher than in Germany, the report emphasizes that Germany chose at the beginning of the 2000s to give clear priority to improving her competitiveness.

The report carries out an exhaustive study of the French and German social security deduction systems. In particular, the Cour des Comptes highlights the challenge of easing labour costs as part of a competitiveness strategy. It also emphasizes the important role of Net Worth taxation in France and the choice made by Germany of taxation on income from, rather than the possession of, assets./.

(1) Auditor-General’s Department or Audit Court

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