Gerard Depardieu Moving to Belgium: Is France punishing success?

Update: Depardieu has become a Russian citizen after the 75% French tax on wealthy citizens. A short message on the Kremlin website announced this news.

"Vladimir Putin has signed a decree granting Russian citizenship to Gerard Depardieu," the message read.

Depardieu recently announced he would give up his French passport after the government criticised his decision to move abroad to avoid higher taxes (see beow).

In December, Putin said he would be happy to welcome the actor in Russia.

"I'm sure the French authorities did not want to offend Mr Depardieu. But if he'd like to have a Russian passport, consider it settled," Putin said during his annual news conference on 20 December.

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Many well-known French faces have chosen to flee the country for tax reasons, but the recent self-imposed tax exile to Belgium of the actor Gerard Depardieu has caused a major uproar. Described as “pitiful” by the Prime Minister, Jean-Marc Ayrault, Depardieu’s departure has not only revived the eternal debate on if the “richest” are fairly taxed or not but has also raised questions on whether the current fiscal policies are success-friendly.

The issue was addressed when in an ultimate twist of controversy to his move the actor decided to surrender his French passport and social security card. In fact, exasperated by the criticisms leveled against him by the government, he wrote in an open letter to the prime minister, saying that he had "nothing to do in France," and moreover accused the current government of wanting to "punish" success. By that he was, of course, reproaching the government's new fiscal measure, which aims to tax at 75% incomes of over a million euros per year.

Depardieu, exile for fiscal reasons does not come as an isolated case. Other artists, sport persons, business men have left before him. And currently, about 500 French citizens are said to be waiting to be naturalized in Belgium mainly due to financial reasons. All in all, most “deserters” claim that the increasing fiscal pressure has reached the point of being unbearable, and ultimately feel like the country doesn’t like or encourage individual success.

President François Hollande said in response that the 75% income measure was necessary in this time of crisis, and will only last for two years. To him it is a call for economic patriotism in order to contribute to national recovery. Nonetheless, it is becoming clear that there are those who are tired of “always” giving out more than others. In his letter, Depardieu pointed out that in 45 years he has paid 145 million euros in taxes and currently employs 80 people since he is not only an actor, but also entrepreneur. He also claimed to have paid 85% income taxes in 2012. But more serious some taxpayers said to have already paid 100% of tax everything combined.

The taxation system practiced by all governments (left or right) over time, has not only deterred talents, but also capital and revenues. Indeed, some of the dynamic French have fled the country in order to go live their dreams, create businesses, or do research in countries where they feel valued and recognized, and where they can invent and create freely. For instance, it has become common that some French entrepreneurs prefer to go create their business on the other side of the channel, in London, where the formalities are less bulky and where labor laws are more flexible. And some go even far in a city like Los Angeles for better environment of their business development.

But taxation is not always the only reason; some entrepreneur cannot stand government’s intervention in their business management. Similarly the phenomenon not only affects big firms, some small business holders of local services such as hairdressing or catering also decide to sell their project and go start elsewhere. And all this may be reflected as a leakage of wealth and jobs’ creation which certainly doesn’t help in the country’s recovery.

Depardieu’s case closely follows other departures, like those of CEO of the French multinational luxury good conglomerate LVMH, Bernard Arnault, who requested Belgian nationality, or the one of president and founder of the French optician group, Alain Afflelou, who is said to be moving to London. The two have since denied wanting to dodge the 75% tax, and insisted on their intentions to continue paying taxes in France, but for how long will that last? Isn’t that a way of gradually leaving without creating any theatrical chaos? However, it should be noted that the income tax is higher in Belgium than it is France or Britain. But the advantage of both countries is that they do not have taxation of capital gains on securities, and inheritance dues are lower compared to France.

The fiscal policy issue has always been around, and it does not only concern the present socialist government, but the previous one also. Under five year of Nicolas Sarkozy’s presidency, at least 30 new taxes were created. Sometimes touching the same category of individuals more than once, it is possible that at the end, all combined, some people had to pay more than 100% in taxes. This does not certainly encourage any business. For many, France has become a “tax hell,” and if it wants to be attractive, it cannot remain like that for it scares entrepreneurs, industrials, job creators.