Social VAT and apprenticeship bonus/penalty. The amended Finance Act improves the dual training bonus/penalty system and introduces social VAT. This measures aims to reduce wage costs on lower wages to boost competitiveness. Starting on October 1, family contributions, which are solely paid for by employers, will be canceled for earnings or gains lower than a first annual limit to be defined – probably 2.1 times minimum wage – and then the rate will follow a linear increase with the income until it reaches the second limit, still to be defined – possibly 2.4 times minimum wage. After this limit, the 5.4 percent contribution rate is maintained. This decrease in employers’ contributions will be paid for by the VAT increase from 19.60 percent up to 21.20 percent and social debits on capital yield – 3.4-5.4 percent.
reduce wage costs on lower wages to boost competitiveness. Starting on October 1, family contributions, which are solely paid for by employers, will be canceled for earnings or gains lower than a first annual limit to be defined – probably 2.1 times minimum wage – and then the rate will follow a linear increase with the income until it reaches the second limit, still to be defined – possibly 2.4 times minimum wage. After this limit, the 5.4 percent contribution rate is maintained. This decre
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