In return the ceiling for benefit may be identified

A new plan of strengthening of own funds announced by the head of State. It is designed to meet the recurrent problem of the lack of capital of French SMEs flange development. So far, the "capital distribution" is not the most effective way to achieve this, in contrast to a tax incentive to the reinvestment of profits and an inducement to the debt reduction by the limitation of the deduction of the tax base of the interests of loan. All the previous interventions of the State to strengthen the equity of SMEs and proposals from the many reports on the subject took the path of direct intervention on the capital. It was recognized that the investment fund or public banks of type Oséo were most likely enhance the equity of unlisted SMEs. At the same time, tax devices have been implemented to encourage individuals to invest in the equity small business.

Such a strategy, of course, to make the France fourth globally for the capital invested and borrowed funds and the second European LBO market. But it was not sufficient to lead to an increase of the own funds of the new productive companies. What are assignments and estates that have benefited from this influx of capital-investment, more the creation and development, as shown in the latest report of the Board of taxation.

So continue on the same route will not strengthen the soundness of companies. This is why it must change the tax system, because it encourages businesses to undercapitalization allowing the deduction of interests of borrowing from the taxable profits without limits. Indeed, for such a deduction, the acquisition of a company by repayable debt is funded by the future results of the company acquired through the distribution of dividends, which limits the equity. In General, the contractor has an interest not reinvest profits and going into debt to reduce its corporate tax base. The tax system pushes to choose the debt denounced by the head of State.

A distribution of equity through the strategic investment Fund (ISP) or OSEO is the question of the terms of the choice of the company: why such company rather than another It may be unfair by focusing on companies with the capitalisation is the result of a strategy of short term profitability. Finally, it strengthens the LBO because, in this case, it is the holding company which is in debt and characterized, by essence, by little capital. The recapitalization would accelerate the repayment of the debt without however changing anything purchased small business will continue to pay its profits to the holding company for the repayment of the loan. The redefinition of the corporate tax should be the preferred means to respond to the lack of own funds. It must operate according to three terms. The first is to package the application of the reduced rate of taxation of profits of SMEs in 15 reinvestment in the business. In return, the ceiling for benefit may be identified. For businesses in the competitiveness Poles who pay no tax on corporations, the advantage should be, also, conditioned to reinvestment. The. It would be of course possible to like the Germans, i.e. to tax the profits distributed to height of 49 and reinvested to 31. The last is the deductibility of interest of loan limits.

If the investment is useful for the development of enterprises, it is not the only way to explore. It is an urgent need to refocus the tax system by reducing the tax on reinvested companies and by capping the deductibility of interest for the loan. It is a good way to reduce the cost of own funds and avoid the perverse effects induced by the opening of a one-stop distribution of capital. So was rather that the strengthening of own funds or endogenous; business leaders are more able to decide the time and the amount to be assigned to consolidate their business. This route has not yet been explored. It's time!