Waivers on the payment of withholding tax on the
salaries of scientists were introduced back in 2004, in order to support
the research and development effort and encourage the knowledge-based
economy. This tax incentive has been gradually widened over time. Since
2007, this benefit has been granted to all holders of a master's degree
in a scientific subject. In addition, the different rates of reduction
will be harmonised as of 2008 and the maximum rate will be applied to
all categories of scientists.
Employment of workers aged over 50 is being
encouraged by the application, since April 2007, of a further reduction
in employers' social security contributions, increasing with age.
Enterprises are also being given incentives to recruit workers who have
lost their jobs through restructuring, through further cuts in
contributions. Furthermore, the higher benefit granted to employers if
they take on workers aged at least 45 is aimed at boosting employment of
older people.
In the context of negotiations on the central
agreement for 2009-2010 next autumn, the government has also said it
would be prepared to expand the system of partial exemption from the
withholding tax on earned incomes in the case of night work and shift
work, which had already been reinforced in 2007(1).
Several provisions concern both demand and supply
on the labour market. Tax benefits for overtime were further raised in
April 2007, with more attention paid to workers' earnings. During the
next round of collective bargaining negotiations, and depending on the
proposals put forward by the social partners, the government will be
considering reinforcing this system, as well as a change in the number
of overtime hours allowed and the regime governing employers' related
social security contributions.
Likewise, a new tax incentive scheme enabling
workers to receive a bonus linked to the firm's financial results is
being set up in 2008, in order to stimulate workers' involvement in
their company.
(1) The government
attached a condition to this request from the social partners, namely
that the extra tax advantage must not be used to finance pay rises.
