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Saturday December 14, 2013 MYT 12:12:01 AM
Saturday December 14, 2013 MYT 12:12:07 AM
PARIS (Reuters) - Monaco were exempted from a super tax on salaries exceeding one million euros on Friday just hours after being told they would have to make the payment.
The National Assembly voted late on Thursday that Monaco, backed by a Russian billionaire, would be required to pay the tax despite falling outside France's tax regime.
But the French government had that amendment suppressed on Friday in the latest twist of the long-running saga.
The government felt that the amendment carried the risk of being unconstitutional and asked the assembly to suppress it, which it did by a vote of 12 to eight.
"We did not want to take a judicial or constitutional risk," Budget minister Bernard Cazeneuve told reporters.
Thursday's amendment, presented by deputy Annick Girardin and voted on overnight, stated that the tax would be collected by the French league on behalf of the State.
The 75 percent tax rate, a 2012 campaign promise of president Francois Hollande, was initially imposed on individuals who earned over one million euros ($1.38 million) a year but after protests by top French executives and actors such as Gerard Depardieu, the government changed the law and made companies offering such salaries liable for the payment.
The tax is applicable to annual revenues above one million euros although there is a five percent cap of a company's turnover.
Top clubs complain it will add up to 20 million euros to their tax bill, although Monaco's turnover is not expected to be sky high.
In 2011-12, when they played in Ligue 2, their turnover was only 21 million euros - compared to PSG's expected 400 million euros in 2013.
Fourteen of the 20 Ligue 1 clubs are expected to be affected by the tax, with Qatar-funded Paris St Germain the hardest hit.
PSG, who have spent more than 200 million euros on transfers since being taken over by Qatar Sports Investments in 2011, is expected to pay some 20 million euros.
Last month, the Union of French professional soccer clubs put off a planned strike in protest against the tax.
($1 = 0.7271 euros)
(Reporting by Emile Picy and Julien Pretot; Editing by Pritha Sarkar and Toby Davis)
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