Environmental taxation: a renewable source of liability

Environmental taxation: achieving greener behavior

With the carbon tax, the CSPE (contribution to the public service of electricity) and the tax credit for energy renovation, environmental taxation has been playing in the last few years a more and more important role in everyday life, impacting the tax sheet of individuals and companies. Customers expect law counsel and accountancy professionals to optimize their fiscal choices. This generates new risks.

A dissuasive taxation to preserve environment …

Renewal of incentive measures in terms of energetic renovation, clean vehicles bonus, cancellation of the mud tax and new increase of the famous Climate Energy Contribution, better known under the name « carbon tax »; still this year, the financial law gives us an invigorating menu in terms of environmental taxation.

Environmental taxation integrates in the costs borne by economic stakeholders (companies, homes, public sector), the cost of environmental damage caused by their activities.

So, the law on energetic transition projects the regular increase of the carbon tax until 100 €/ton of CO² in 2030. This increase is intended to limit the CSPE tax (Contribution for public power service) paid by power consumers to finance the development of renewable energies and respect the price parity between regions, included overseas departments and territories.

In other words, the rise of the carbon tax penalizes polluters by reducing the fiscal impact on non-fossil energies for companies and individuals.

Besides, if environmental taxation is less perceptible than the revenue tax, because more often it is an indirect tax, it weighs more and more on companies and homes budgets with a global income of around 65 billion euros in 2016, that is more than 6,5 GDP points this year.

… Towards incentive measures to modify behaviors

If environmental taxation is very often tackled because of « taxes » and other dissuasive measures, it also includes incentive measures!

The aim consists in influencing micro-economical behavior through tax burden or tax relief.

From reductions (or more often, the non-increase) to tax credits, there are many means if intervention and they are meant to develop in the future.

So, the increased weight of environmental taxation will be able to lead different stakeholders to new economic behaviors, avoiding dissuasive measures and the orientation towards actions entitled to tax credit or a milder fiscal climate.

The obligation of counsel and information in the spotlight of environmental taxation

The stake for regulated professions, in particular certified accountants and tax lawyers, will consist in orienting their customers towards the most suitable fiscal instruments, while restricting recovery risks.

New risks, of course, but with very classic features in taxation field, namely:

  • Tax recovery risk in case of infringement of environmental taxation law
  • The risk of missed economies in case of omission of a profitable fiscal system

Environmental taxation renews regulated professions stakes towards their information and counsel obligation, at least extensive, taken into account current legislations.

In this framework, economic stakeholders won’t fail to rely on the expertise of their usual consultants whose responsibility already inexhaustible will have a new source.


Laurent Michel, Finance Loss Adjuster

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