The government announces a tax gesture in favor of associations

The State will set up a “CICE association”, estimated at a boost of 600 million euros for the sector, confirmed Patrick Kanner. “The measure aims to develop associative employment”, defends the minister.

It is now official. While associations could not benefit from the, the government will set up the “CICE association”, confirmed this morning Patrick Kanner during the forum of associations which was held this Wednesday in Paris. The Minister of the City, Youth and Sports, defends a measure “which aims to develop employment in the associative sector”.

This “payroll tax credit” intended for associations will be implemented from January 1, 2017 and will be the subject of amendments to the finance bill for 2017.

The system is close to the reduction in the payroll tax implemented since 2014., the latter were encouraged to hire since, for all salaries below 2.5 times the minimum wage, they benefit from a credit of tax of 6% – soon 7% – of the corresponding payroll.

This device will be adapted to the sector. Concretely, the associations which still pay the payroll tax will benefit from a reduction of 4% of the payroll, for wages below 2.5 Smic. The government estimates that the measure will represent support of 600 million euros in additional cost reductions for associations, foundations and structures of the social and solidarity economy.

This new boost will be added to the reduction of 20,000 euros which was decided in 2013 and which mainly concerned small associations. This first measure represented more than 300 million euros and allowed 70% of associations to no longer pay tax on salaries.

The sector on an equal footing with the private sector

The system thus compensates for the competitiveness deficit suffered by the sector. “This is a measure eagerly awaited by the sector. In fact, the borders between private companies and associations are not watertight and structures were in competition in many areas. Thus, the CICE reserved for companies only, introduced an imbalance of competition and associations were disadvantaged, ”explains Socialist deputy Yves Blein, one of the advocates of the measure. For example, the corporate tax of a for-profit retirement home was reduced by 4% and then by 6%. At the same time, the same establishment under an associative statute, on the contrary, had not benefited from any advantage.

“The new measure therefore re-establishes a competitive equilibrium. The device represents a very significant reduction in the burden for the sector and will free up resources for associations, ”says Yves Blein. In the voluntary sector, a large part of salaries is indeed less than 2.5 times the minimum wage (less than 43,000 euros gross annually). In fact, in 2015, the average annual salary was 20,885 euros per person.

The new measure should thus facilitate hiring in the associative sector. The latter weighs heavily on the economy since it alone represents nearly one in ten private employees. In 2015, the number of jobs was estimated at 1.8 million employees.