From 2014 to 2016, French companies will be charged a 75% surcharge on salaries exceeding a million euros. Francois Hollande developed the updated version of the luxury tax in an attempt to bypass France's Constitutional Council that ruled out any payroll taxes over 66%.
Not only large firms fell victim to the innovation however. The new tax shattered hopes of football clubs for privileges. President of the French Professional Football League Frederic Thiriez estimated costs the tax may cause top football clubs at 82 million euros. As French football is currently underfinanced, such a tax hike may have really deplorable consequences.
The scandal over a possible introduction of the luxury tax at the end of 2012 drove many wealthy Frenchmen out of the country. To avoid taxes, they preferred to move their businesses to neighbouring European countries, namely Belgium and Switzerland. No one can tell so far what effects will the drastic change have and whether it will pay off.