Taxes and social contributions in France and in Germany, synthesis … · 2017. 6. 6. ·...

COUR DES COMPTES

Taxes and Social Contributionsin France and in Germany

March 2011

��Notice

Summaryof the Public Thematic Report

This Summary is designed to make the Report of theCour des Comptes more accessible for reading and

commentary. The Cour des Comptes is responsible only for thecontent of the Report. Replies from the administrations and entities directlyconcerned are appended to the Public Report.

Contents

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Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5

1 The characteristics of taxes and social contributions in France and Germany . . . . . . . . .7

2 Review by Blocks of levies . . . . . . . . . . . . . . . .13

3 Main Findings from the Comparison . . . . . . . . . .21

General Conclusion . . . . . . . . . . . . . . . . . . . . .27

Main Observations . . . . . . . . . . . . . . . . . . . . . .28

Recapitulation of Main Recommendations . . . .32

Introduction

5

In September 2010, the Cour des Comptes undertook a project aimed at com-paring the French and German taxes and social contributions, thus acceding

to a request made by the President of the French Republic.

The Cour des Comptes felt that such an examination must necessarily make allo-wance for the context in each country, and in particular their respective situation withregard to the economy and public finances. It carried out a comprehensive analysis ofboth countries’ taxation and social security systems, whilst never losing sight of the factthat the competitiveness and attractiveness of a country are influenced by factors otherthan taxation alone.

In order to perform this analysis, the Cour des Comptes organised the broadestconsultation feasible: a group of experts was set up to inform the work of the Courdes Comptes and hearings were held with officials from trade unions and professionalorganisations and with taxation experts. Moreover, productive technical exchanges wereheld with the German Federal Ministry of Finance, which had been designated as theCour des Compte’s interlocutor.

The report is issued under the sole responsibility of the Cour des Comptes.�

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Cour des comptes

1 The Characteristics ofTaxes and SocialContributions in Franceand Germany

Background

Two Diverging EconomicTrends

France and Germany’s combinedGDP is more than half that of the euroarea and the two countries are relativelyhomogeneous from an economic andsocial point of view : per capita GDP isclose; the pace of growth is similar ; andthe scope of social protection is exten-sive.

These similarities should neithermask the deep structural economic dif-ferences nor the existence in recenttimes of contrasting developments.

Germany, in contrast to France, isdriven by medium-sized enterprises(Mittelstand). The country’s growth isbased on industry (25.6 % of GDP,compared to 13.6 % in France) and,even more than in the past, on exports,to the relative detriment of consump-tion.

Average annual growth between2000 and 2010 was slightly higher thanin France (1.5 %, compared to 1.1 %),and since 2006, the pace has been morebrisk in Germany. Recovery from theeconomic crisis has been quicker.Germany looks set to have an apprecia-

bly higher pace of growth during theyears 2010-2012.

The higher growth rate in Germanysince 2005, the reforms undertaken onthe labour market and the extensive useof partial unemployment during the2008-2009 crisis enabled Germany toreduce its unemployment rate to 6.6 %at the end of 2010, as compared to9.7 % in France.

The share of value added has deve-loped differently over the 2000s. Theshare of wages and salaries remainedstable in France. It decreased by fivepoints in Germany, having started froma higher level. This phenomenonreflects, over and above the initial shockof German reunification, the effects ofthe country’s wage moderation policy.

Structural Gaps inCompetitiveness, RecentTrends Favourable toGermany

Competitiveness in France andGermany has followed diverging path-ways.

Germany has for quite some timebenefited from a non-price competitiveedge : German products are seen as bet-ter quality ; the strategy of establishingsubsidiaries in export markets; the larger

The Characteristics of Taxes andSocial Contributions in France and Germany

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size of its export sector ; and better geo-graphical diversification of its exportfirms.

Cost-based competitiveness hassignificantly improved over the decadesince 2000. The rise in unit wage costs(including both hourly wage costs andprogress in productivity) has been 10points higher in France than in Germanindustry over the 2000-2008 period. Theadvantage that France enjoyed in thisarea in the early 2000s has now beenlost.

The German trade surplus hascontinued to grow (€134 billion in2009) ; the French deficit has continuedto worsen (€53 billion in 2009). France’smarket share, both within and outsidethe European Union, dropped by aboutthree points between 2000 and 2009.

Redistribution: A MoreExtensive Mechanism inFrance

The scope of social protection ismore extensive in France than inGermany : greater consideration givento the burdens weighing on families ;more protective unemployment insu-rance ; the entire population covered bya compulsory health care system ; com-pulsory supplementary pensionschemes. These characteristics are ofmajor significance for redistribution :they account, in France, for some 63 %of the reduction of inequalities, whilethe remaining 37 % can be attributed toprogressive taxes.

In the year 2000 income gaps weresmaller in Germany than in France. Thesituation reversed as of 2006, before thetwo countries converged an arrived atvery close levels in 2009. The Gini coef-ficient – an indicator of inequality – hasremained stable in France throughoutthe period. It increased by 20 % inGermany. The relative rate of povertyincreased by half in Germany between2000 and 2009, whereas it decreased by20 % in France.

Fiscal Policy: More of aPriority in Germany

Germany gives greater priority to abalanced Government budget. Francehas not seen a budget surplus since1974. Since the year 2000 GermanGovernment budget were in a surplusduring three financial years.

Germany used the period of relati-vely high growth that it experiencedbefore the recession to reduce itsGovernment deficit. In 2008, at theonset of the crisis, France’s deficit was3.3 % of GDP, whereas Germany had asurplus of 0.1 % of GDP. Today, theFrench structural deficit is more thanthree points higher than that estimatedfor Germany.

The gap between the German andFrench budget situations can for themost part be explained by the dynamicsof public spending. Between 2000 and2008, Germany slowed down theincrease of public spending (drop from45.1 % of GDP to 43.8 %), which was

The Characteristics of Taxes andSocial Contributions

in France and Germany

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not the case in France. In 2000, FrenchGovernment debt was lower thanGermany’s, and lower than theEuropean Union average. In 2010,Government debt equalled 80 % ofGDP in Germany, compared to 83 % ofGDP in France.

The Level andStructure of Taxesand SocialContributions

High Taxes and SocialContributions in bothCountries; SharperReduction in Germany

Many of France’s taxes and levieshave no equivalent in Germany; theconverse is far less often the case. Thisis particularly true for taxes paid by busi-nesses and which burden productioncosts; these account for an estimatedtotal amount at €58 billion in 2008, inother words, 3 GDP points. These taxesare levied on the payroll (€26.5 billion),fixed capital and turnover. Regardingtaxes on households, the CSG and theCRDS partially compensate for the nar-row scope of personal income tax; thetaxe d’habitation (residence tax)(€13.3 billion) and the ISF wealth tax(€4 billion) have no equivalents inGermany.

The tax-to-GDP ratio in both coun-tries is considerably higher than the ave-rage across the European Union (at 27),but the gap between the two countriesin terms of overall taxes is significant(approximately 3.5 % of GDP). Morethan two-thirds of this gap can beexplained by the different scope of thesocial protection.

Taxes and SocialContributions by Level ofGovernment

In Germany, 40 % of taxes andsocial contributions go to social securityfunds ; 30 % to the central State ; and30 % to local authorities and Länder.The breakdown has not changed inrecent times. In France however, theproportion of taxes and social contribu-tions which goes to the central State hasdecreased by 3.2 % of GDP between2000 and 2008, to the benefit of socialsecurity funds and local authorities. In2008, 36 % of overall taxes and socialcontributions were apportioned to thecentral State ; 52 % to social securityfunds ; and 12 % to local and regionalauthorities.

Germany is a federal State but thereis little autonomy regarding local taxa-tion. In France the revenues of a num-ber of levies are 100 % earmarked forfunding local and regional authorities. InGermany 75 % of the Länder’s tax reve-nues are derived from taxes which areshared with the federal State, and then


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re-distributed in accordance with a for-mula.

The Economic Analysis ofTaxation

Eurostat data slightly overestimatesthe difference in taxation on capital

(about 3 GDP points), but it is nonethe-less significant. In France, between 2000and 2008, it is taxation on consumptionthat decreased the most (-0.9 GDPpoint); in Germany it was taxation onlabour (-2.7 GDP points).

Source : données Eurostat

Breakdown of Taxes and Social contributions by Economic Function (as % of GDP)

The Characteristics of Taxes andSocial Contributions

in France and Germany

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Taxation on Consumption

France has reduced taxes onconsumption, whereas Germany – as isthe case on average among the countriesof the European Union – has tended todo the opposite. In 2008 France taxedhousehold consumption at the rate of19.1 %, as opposed to 19.8 % inGermany, and 21.5 % on average in theEuropean Union.

This tendency can be explained inFrance by the drop in the normal VATrate, the extension in scope of applica-tion for the reduced rate, the eliminationof the “vignette” vehicle tax and modi-fications made on the TIPP (a tax on oilproducts). In Germany, the upsurge isdue to the three-point increase of thenormal VAT rate (from 16 % to 19 % asof 1 January 2007), designed to financeGovernment deficit reduction and halfof the 1.6 % net drop in social contribu-tions.

Taxation on Labour

The rates of taxation on salariedlabour are similar in France andGermany (41.4 % and 39.2 % respecti-vely) and are above than the EuropeanUnion average.

This rate has been stable in Francesince 1995. The impact of the decreasein social contributions levied on lowsalaries was neutralised over the periodin question by the increase in otherwage-based taxes. Germany has, on thecontrary, been decreasing wage-basedtaxes since 2004 in order to improve the

competitiveness of its enterprises (dropin social contributions on low wagesunder the so-called “Hartz” Laws, dropof 1.6 points in social contributions in2007, reduced personal income tax ratesince 2000).

Taxation on Capital

The German rate of taxation oncapital has decreased considerably since2000 and is now well below theEuropean Union average. France has asignificantly higher rate: in all, capitalwas taxed at 38.8 % in 2008, comparedto 23.1 % in Germany, and theEuropean Union average of 26.5 %.

Revenues from taxation of capitalincome are comparable in the two coun-tries. France levies more taxes on capitalstock (4.5 % of GDP, as opposed to1 % for Germany). Most of the gap bet-ween the two countries in relation to taxon capital stock comes down to, on theone hand, levies that exist in Francealone (the taxe professionnelle; the ISFwealth tax; transfer taxes; C3S, a solida-rity tax weighing on businesses; the taxed’habitation, or residence tax), and, onthe other hand, the fact that taxation isconsiderably heavier in France (the taxefoncière, or property tax; mutations àtitre gratuit, tax on inheritance andgifts).

The gap between the two countriesas regards taxation on capital income isslight and has not changed since 2000.In 2008, this taxation amounted to5.8 % of GDP in Germany and 5.3 % inFrance. In terms of rates for taxation on


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capital income, both France andGermany remain above the EuropeanUnion average (21 % and 19.7 % res-pectively, compared to 19.3 %).

Environmental Taxation

Revenues from environmental taxes,as defined by Eurostat, are lower inFrance (2.1 % of GDP in 2008) than inGermany (2.2 %) and lower than in theremainder of the European Union(2.6 %).

The progression of environmentaltax revenue was nonetheless similar inthe two countries between 2000 and2008. The tax burden on energy pro-ducts is markedly higher in Germanythan in France. Taxes levied on thetransport sector are more prevalent inFrance, due primarily to the versementtransport (transport tax) (€6 billion)which does not exist in Germany, but itsclassification within the category ofenvironmental taxes is subject to debate.

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Cour des comptes

2 Review by Blocks of Levies

Taxes and SocialContributions leviedon HouseholdIncome

Different tax and socialcontribution structures

The architecture of taxes and social contri-butions

The share of income tax in GDP ismore than three times higher inGermany than in France (9.6 % ofGDP, as against 2.6 % respectively).

Taxation of household income inFrance has been impacted since thebeginning of the 1990s by the introduc-tion and subsequent upscaling of pro-portional taxes (the CSG and CRDS)earmarked for funding the social protec-tion system; these levies essentiallyreplaced social contributions. In 2008,these proportional taxes accounted for4.6 % of GDP.

Social contributions are significantlyhigher in France than in Germany (res-pectively 15 % and 12.6 % of GDP).They are not shared out betweenemployers and employees in the same

manner : whereas in Germany theemployer and employee share is practi-cally identical, in France the employershare is more than double that of theemployee (respectively 11 % and 4 % ofGDP).

Personal income tax

The top marginal personal incometax rate is higher in Germany than inFrance: 45 %(1) in Germany, as compa-red to 41 % in France. This situationarises from the fact that the rate for thehighest marginal bracket has droppedmore significantly in France over the last20 years.

Personal income tax in both Franceand Germany are subject to an incomesplitting system that applies to marriedcouples, whereby the overall income ofthe household is considered for the pur-poses of assessing payable tax. Germanhouseholds nonetheless have the optionof being taxed separately.

The way that children are accountedfor is noticeably different in the twocountries; Germany does not have anyfamilial income splitting system analo-gous to the French one. German house-holds have a choice between receivingfamily benefits or being granted a taxallowance.

(1) A “solidarity surcharge” of 5.5% of the amount of tax owed is added to this 45% rate.

Review by Blocks of Levies

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In both countries, a cut for work-related expenses may be calculatedeither on a fixed-rate basis or withregard to actual expenses incurred. Thefixed-rate method in France is markedlymore advantageous than in Germany(10 % of wages and salaries subject to a€13,948 cap in 2010, compared to €920in Germany).

Income tax in Germany is withheldat source, but this does not exempt mosttaxpayers from having to file a supple-mentary tax return.

Tax expenditures relating to incometax are significant in both countries, butare more numerous and more costly inFrance.

Social taxes and contributions

Germany has not diversified themethods for funding social security inthe same way that France has with theCSG, which weighs largely on house-hold income and, in particular, on capi-tal income. The overall contributionfrom income to social security is signifi-cantly more regressive in Germany thanin France.

Opportunities for exemption fromsocial contributions are much moreextensive in France (for a cost of morethan €30 billion) and mainly concernemployer contributions on low earnings(up to 1.6 minimum wage). In Germany,relief is granted only on social contribu-tions and it is more restrictively targetedthan in France.

Generally similar effects interms of labour costs andredistribution

In 2008, social contributions leviedon household income came to 23.3 % ofGDP in France, and 24.9 % inGermany. The impact of social contri-butions (payroll contributions, adjustedfor concessions and exemptions) andtax (on income and, in France, the CSGand CRDS) on labour costs is compara-ble in the two countries. The ratio ofaggregate income tax and social contri-butions to overall labour costs incurredby employers – also referred to as the“social contribution and tax wedge” – is49.2 % in France and 50.9 % inGermany for the average wage. Thisratio is far higher in both countries thanthe average for the OECD countries,which is 36.4 %.

As for comparative taxation ofhigher earnings, in addition to thehigher top marginal rate in Germany,the tax shelters likely to be used byhigher earners to ease their tax burdenare less common and capped at lowerlevels than in France.

Finally, alongside the taxes andsocial contributions on householdincome, both countries grant significantrelief to families. The German systemappears to be a fraction more generousfor families that have one or two chil-dren as regards benefits in cash. TheFrench system is more advantageous inthe area of benefits in kind (child-min-


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ding schemes). It is more beneficial tofamilies with three or more children andto families earning higher income.

Taxes and SocialContributions leviedon Wealth andAssets

Taxation of assets: amuch higher tax burden inFrance than in Germany

Germany, with its moderate pro-perty taxes (approximately €11 billion),the suspension of its wealth tax since1997, and the tax on trading capital thatwas abolished in 1998, has chosen toapply a very low level of taxes on capi-tal. The overall level of these taxes andsocial contributions account for 0.46%of GDP, well below the OECD averageof 1.13 % of GDP.

In contrast, the level of taxes andsocial contributions levied on assets inFrance is higher than the OECD ave-rage. It accounts for 2.6 % of GDP.This is essentially a result of the rapidgrowth of real estate taxes over the lastdecade, yielding aggregate revenue ofnearly €33 billion in 2010. Furthermore,the ISF wealth tax (€3.6 billion in 2010)has become a French peculiarity in theEuropean Union (although Norway andSwitzerland have maintained a tax ofthis type). Germany decided to “sus-

pend” this type of tax, which earnedsome €4 billion, in 1997. In Germany,there is no legal ceiling on overall taxa-tion like France’s “tax shield”, but com-pliance with the principle of outlawingany over-taxation or confiscatory taxa-tion is carefully supervised by theConstitutional Court.

Asset transfers and dispo-sals – a heavier burden inFrance despite similarpolicy choices in recenttimes

Only real estate transactions aretaxed in Germany at a lower proportio-nal rate than in France. In France, pro-perty transfer duties are levied not onlyon real estate assignments, but also ontransfers of shares and business intangi-bles. In aggregate, the revenues collec-ted in France (approximately €9 billionin 2010) are double the German amount(€4.8 billion).

In recent times, Germany andFrance have made generally similarchoices in the area of taxation of capitalgains and gift tax. Taxation of gains ondivestitures of securities was increasedin Germany when the flat and finalwithholding tax was implemented, as ofJanuary 2009, and in France as one ofthe measures designed to fund pensionscheme reform. The recent reforms oftaxation of donations and gifts – passedin 2007 in France and 2009 in Germany– both substantially lowered duties on


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direct line inheritances, and indeedexempted inheritances involving smallor medium estates.

Income from assets – anoverall equivalent tax bur-den, but differences inmethods

Taxation of income from assetsproduces relatively comparable revenuein the two countries : some €25 billionnot including taxes on real estateincome.

Since 2009, Germany has introdu-ced a flat and full withholding taxalmost across the board that is simple toapply to all income from assets. France,for its part, collects both income tax andsocial contributions – the overall weightof which has quadrupled in the last tenyears – but also offers myriad taxexemptions and incentives.

On balance, the taxation of wealthand assets in Germany, which in nearlyall respects is below the OECD average,relies mainly on the taxation of incomeand of capital gains earned from assets.France instead has opted for tax policiesthat result in assets being taxed acrossthe whole chain, from holdings to dis-posal/transfer, as well as asset-genera-ted income, at levels that have increasedover time to the point that their econo-mic incidence (3.4 % of GDP) is farhigher than the average for the OECDcountries (1.8 % of GDP).

Corporate Taxation

Different priorities and taxstructures in the area ofcorporate taxation

Local taxation of businesses based on diffe-rent taxes

In both Germany and France, com-panies are subject to taxation at twolevels. In addition to corporate tax, busi-nesses must also pay local taxes: the for-mer French trade tax that morphed intothe “Territorial EconomicContribution” in 2010; and the trade tax(Gewerbesteuer) in Germany. Whilecorporate taxation is based on similarprinciples in both countries, the tradetaxes (France’s Territorial EconomicContribution and the German trade tax)are different in design. The former com-prises a contribution based on the valueof the company’s real property, plus acontribution based on its added value.The latter is assessed in a manner verysimilar to corporate tax. These diffe-rences are reflected in the respectiveburdens that these two taxes represent.The French trade tax has accounted fora declining share of contributions leviedon companies over the last ten years; theproceeds from the German trade taxhave increased considerably. In 2008,revenues from the French trade tax


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came to 1.01% of GDP, whereas thisfigure was 1.65% in Germany.

A clear-cut divergence in the area of corpo-rate tax

Starting in the late 1990s, successiveGerman Governments reformed corpo-rate taxation with the stated aim ofenhancing the competitiveness of firms.The reform was implemented in twostages : first in 2000 and then in 2008. Itled to a sharp drop in the corporate taxrate, which went from 30 or 40 % in1999 (depending on whether or not pro-fits were distributed) to 15 % in 2008.The reform also entailed a broadeningand simplification of the tax base.

During the same period, there waslittle change in France’s corporate tax.As a result, the proceeds of corporatetax place a very different burden onbusinesses in the two countries : 0.64 %of GDP in Germany and 2.53 % ofGDP in France. The very small sharearising from corporate tax revenues inGermany is due not only to the reduc-tion in the rate of this tax, but also thefact that 83 % of German businessesare actually partnerships that are subjectto income tax (as opposed to only 57 %of French enterprises).

Far more taxes charged to businesses inFrance than in Germany

In addition to corporate tax and theTerritorial Economic Contribution, theFrench tax system includes a large num-ber of levies on businesses, principally

the tax on wages and salaries, paidmainly by banks and insurance compa-nies in return for exemption from VATor the transport charges. Out of thesetaxes, the ones that are assessed onwages and salaries accounted for tax ear-nings of €26.5 billion in 2008 (1.2 GDPpoints) ; they have no equivalents inGermany.

True Differences but Notto be Over-estimated

The German corporate taxation approachplaces greater emphasis on the objective ofneutrality than in France

In Germany, one of the goals pur-sued by public policies, more actively sothan in France, is neutrality. In France,public authorities have turned taxationinto a lever for economic policy and useit to guide stakeholders’ investmentchoices and behaviour. In Germany, theemphasis has been placed on allowingmarket processes to determine the pro-duction factors.

This objective of neutrality was pur-sued in relation to the legal form ofbusinesses, by seeking to harmonise thetax burden on partnerships and stockcompanies. It was also pursued with res-pect to types of investment, with depre-ciation regulations being considerablysimplified. During the same period, theFrench tax system continued to developincentives that have no equivalents in


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Germany, the main one being theresearch tax credit (€5.8 billion in 2009).

In Germany, alongside the decreasein rates, the tax base was broadened aspart of the drive to achieve neutrality.Measures were thus implemented in2008 to even further widen the corpo-rate tax base, by setting a cap on theamount of interest on loans that couldbe deducted and by restricting the car-ryovers of losses.

Both systems achieve an overall equivalentrate of taxation on businesses

The effects of the two tax systemsare very alike in the area of taxes char-ged to corporate groups and to divi-dends between linked companies.

While some of the tax cuts in forcein France have no equivalents inGermany, the reverse is also true : incontrast to French legislation, for ins-tance, the German scheme allows fordepreciation of “goodwill”, therebyencouraging external growth byGerman companies.

Rates of taxation on profits are ofthe same order of magnitude in the twocountries. The overall rate of taxationon profits, obtained by considering cor-porate tax, the trade tax and the tax onprofits, stood at 31 % in Germany in2009 ; in France, it was 34.6 %.

VAT

Apparent convergencebetween the French andGerman VAT regimes

The tax base for VAT has been sub-ject to European Community rules since1967; it is therefore mainly in the area ofrates that Germany and France havemoved closer to one another. Today, thenormal VAT rates are practically identi-cal in Germany and France, at 19 % and19.6 % respectively. The reduced rate isalso similar : 5.5 % in France and 7 % inGermany. These rates place the twocountries at a level that is significantlybelow the European average, which, in2010, stood at 20.52% for the normalrate and 8.46 % for the reduced rate. Asa result, the share of VAT revenues inthe GDP of the two countries (7 %) isalso lower than the European average(7.6 %).

Lingering differences

VAT revenues have more sharply increasedin Germany than in France over the last 20years

The similarity in the French andGerman VAT schemes is the outcome


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of two different trajectories. Since 1990,Germany has increased its normal VATrate by five points, while France raisedits normal rate by one point. The shareof VAT in overall tax revenue is cur-rently higher in Germany (18 % of taxrevenue) than in France (16.4 % of taxrevenue).

Reduced rates and special exemptions widelyapplied in France

France makes more widespread useof reduced VAT rates than Germany.The main differences relate to cafés andrestaurants and to “labour-intensive ser-vices” within the meaning of the VATDirective, such as renovation andrepairs of dwellings, which is subject tothe reduced rate in France, but to thenormal rate in Germany.

In addition, France implementsexceptional rates that have no equivalentin Germany: in particular, the “super-reduced” rate on medicines covered bythe French national health system andon newspapers.

As a result of Germany’s more sel-domness use of the reduced rate andthe inexistence of special rates, VATthere is more efficient in terms of yield.

The VAT increase as part of Germany’sGovernment deficit reduction strategy

Two out of the three percentagepoints by which the normal VAT ratewas raised in Germany on 1 January2007 were earmarked for reducing the

budget deficit, while one point was allo-cated to reducing unemployment insu-rance contributions. While a furtherincrease in the normal VAT rate is notcurrently envisaged in Germany, somethought is being given to reducing thescope of application of the reduced-rateso as to raise additional budgetaryresources. Whereas in France the publicauthorities have assigned to VAT, andparticularly to its reduced rate, a seriesof objectives that this instrument some-times has difficulty achieving (supportto certain economic sectors, employ-ment, bringing illegal labour undercontrol), Germany appears to have setbudgetary yield as being VAT’s mainobjective.

Aligning the French reduced rateand its scope of application with thoseapplied in Germany would generate anadditional €15 billion in budgetary reve-nue.

EnvironmentalTaxation

Heavier taxation onenergy in Germany thanin France

The failed attempts to introduce a carbontax in France

France has attempted on two occa-sions to introduce a carbon tax: the


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“TGAP” on energy products in 2000,and the “carbon contribution” in 2010.Both of these attempts were thwartedby the Conseil Constitutionnel on thegrounds that they infringed the principleof taxpayer equality.

Environmentally-focused taxation reformgradually implemented in Germany since1999

In contrast, Germany carried out anenvironmentally-focussd tax reform(Ökosteuerreform) in 1999 that led to tecreation of an electricity tax and a gra-dual rate increase (by 3.07 cents per yearand per litre for five years) for the tax onmineral products. The proceeds thereoffunded a 1.7 point reduction in contri-butions to the retirement insurancescheme. This reform was furthered in2006 when excise duties on coal wereestablished. The overall level of taxationon automotive fuels and electricity isnow higher in Germany than in France.By comparison with the other membersof the European Union, these twocountries tax automotive fuels heavily,whereas the opposite is true for otherfuels. This leads to a situation wherebythe taxation of one tonne of CO2 isbelow the generally accepted shadowprice of carbon of €32 : €3 for coal and€23 for household heating oil inGermany; €21 for household fuel inFrance.

Taxation of road trans-port: more consistentchanges in Germany thanin France

Under the reforms that have beencarried out since 1999, Germany has, onthe one hand, readjusted tax rates formotor vehicles on the basis of theirCO2 emissions and, on the other hand,introduced a toll for heavy goods vehi-cles (LKW-Maut).

The policy implemented in France isless consistent. Concomitantly with theGermans introducing an environmen-tally-focussed reform in taxation,France abolished the “vignette” road taxfor privately-owned vehicles, but subse-quently established new taxes, such asthe automobile bonus-penalty systemand the tax for heavy goods vehicles(concurrent with the German tollcharge).

Following these changes, the situa-tions are at variance. Taxes on privately-owned vehicles are now significantlylower in France as compared with theother side of the Rhine (the correspon-ding revenues come to €2.5 billion and€8 billion respectively).

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3 Main Findings from theComparison

Tax Equations thatare Similar and yetDifferent

Similar taxes and socialcontributions overall, withsignificant discrepancies

France and Germany both enjoyhigh levels of social protection, finan-ced mainly through social contributions.Because of this, both countries havedevoted particular attention to contai-ning the cost of unskilled labour, withGermany increasingly turning to thegeneral budget to subsidise social secu-rity funds, and France tending to relyupon specially earmarked tax revenues.

The French and German tax sys-tems are characterised by taxes that areoften very similar, be it VAT (the normalrate of which is 19.6 % in France and19 % in Germany), personal income tax(the top bracket is taxed at 41 % inFrance and 45 % in Germany) or evencorporate income tax (33.3 % in France,30-35 % in Germany, once local corpo-rate taxes have been factored in).

Tax-to-GDP ratios in both coun-tries are appreciably higher than theeuro area or the OECD average. Thereis virtually no tax competition between

the two countries. The economic attrac-tiveness of both countries stems essen-tially from non-tax factors (infrastruc-tures, public services, skilled work-forces).

A comparative analysis did, howe-ver, reveal often longstanding discrepan-cies, as well as more recent divergences,when it comes to tax policy :

- the main differences are: a moreintegrated approach in Germany totaxes and social contributions, since theLänder, while financially autonomous,do not have their own tax resources andGermany has no specific taxation ear-marked to fund social security ; the gro-wing burden of social contributions inFrance, where family policies are to agreat extent funded by levies on wages ;a substantial difference in taxation onwealthand assets, with higher propertytaxes in France ; the existence in Franceof several taxes that cause higher pro-duction costs, and that have no equiva-lent in Germany (of which €26.5 billionare based on wages).

- with regard to policy divergencesover the last decade, three are particu-larly significant: a lower priority inFrance given to controllingGovernment deficits, in particular thoseof its social security system; a fastergrowth in tax and social contributioncuts in France in the 2000s ; continued

Main Findings from the Comparison

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policy emphasis in Germany on redu-cing Government deficits and restoringcompetitiveness.

German Tax PolicyMore Explicit andFocused onNeutrality

German taxation policy more clearlyidentifies a priority objective for eachtaxation category. Accordingly, thethree-point increase in VAT on1 January 2007 was basically motivatedby the need to rebalance Governmentaccounts. The overarching objective ofcorporate tax reforms in 2000 and in2008 was to improve the competitive-ness and attractiveness of companiesoperating in Germany, and the redistri-butive role of personal income tax wasunequivocally reaffirmed by the creationof a bracket, taxed at 45 %, for incomehigher than €250,000 per annum. Incontrast, the French debate on taxationseems less clear-cut, with multipleobjectives assigned, implicitly or expli-citly, to many taxes or tax adjustments ;a recent example of this is the switch tothe reduced VAT rate for the restaurantand catering industry.

The economic neutrality of eachindividual tax is more clearly a priorityfor German tax policy. With regard tocorporate taxes, income tax or VAT,there is less room in Germany than inFrance for tax incentives. The “tax inter-ventionism” that is so characteristic of

France is due, in part, to a differentunderlying economic conceptualisationof the respective roles of the State andthe market.

Developments in tax legislationappear less profuse, and more predicta-ble, in Germany than in France. This isundoubtedly due to the fact that taxrevenues are to a very large extent sha-red between central Government andthe Länder, as well as to a political tradi-tion marked by coalition governments,with painstakingly negotiated pro-grammes that are implemented throu-ghout the duration of a legislature.

Lastly, the public debate over taxa-tion in Germany tends, more so than inFrance, to be organised around quanti-fied targets, in particular ceilings ontaxes and social contributions. With res-pect to social contributions, successivegovernments have stuck to an overallrate of 40 %. The corporate tax reformof 2008 pursued a similar objective.

Factors Specific toFrance’s Situation

There are three characteristics ofour country’s situation that limit thescope for potential rapprochement orconvergence.

The overriding need to redress fiscalpolicy requires strict and lasting controlover public expenditure, without rulingout the tax revenue lever. Any conside-ration of tax reform must assumeconstant yields in the immediate, and bebased on prudent hypotheses.


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Competitiveness plays a central role,given the risk of a growing gap betweenthe two economies, and the loss of therelative cost advantage that Franceenjoyed in the early 2000s.

Redistribution plays a more promi-nent role in our tax system. Income,however, may be redistributed in twoways : through taxes and social contribu-tions ; but also by the benefits and trans-fers. The latter tool is undoubtedly finer,and often better suited to the objectiveof redistribution.

PotentialDevelopmentsBased on ClearChoices

Possible Avenues, perBlock of Taxes and SocialContribution

In France, the drop in progressivetaxation of income (the relative weightof income tax has been halved over thelast 20 years, and represented a mere2.59 % of GDP in 2008), paralleled by arise in proportional taxation (CSG,CRDS), should prompt us to re-exa-mine all taxes concerned, and the overalldegree of progressiveness desired. Incomparison, income tax in Germanyhas continued to be higher and somew-hat more progressive, but taxation ofwealth has remained limited, and the

funding of social protection is basedless on solidarity.

With regard to unit salary costs, thetrend in the two countries has beendivergent over the last ten years. Prioritymust thus be given to ways of decrea-sing the relative weight of labour-basedtaxes, especially those borne by compa-nies exposed to international competi-tion.

Above and beyond these two issues,the juxtaposition of high employercontribution rates and of massive exo-nerations for low salaries makes theFrench system less transparent, andraises the question of modifying thecontributions scale to more clearlyreflect the actual rates paid.

With respect to VAT, too, the trendsin France and Germany have beendivergent. VAT revenues in Francedropped by 0.4 GDP points between1995 and 2008, as opposed to the gene-ral upward trend in Europe. In budge-tary terms, two-thirds of additionalrevenue to be gained from harmonisingthe scope and rates of reduced VATbetween the two countries (€ 15 billion)could come from two entries alone(repairs, upgrades or maintenance workundertaken in dwellings and restaurantand catering services).

Regarding corporate taxation,although the overall level differs littlebetween the two countries, Germanyhas, over the decade since 2000, develo-ped its regulations along the lines of abroader tax base and a reduction inrates.


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When compared with other OECDcountries, taxation of wealth and assetsis very low in Germany. Because of thisatypical situation, the latter cannot beconsidered an ideal benchmark forFrance. Certain aspects of wealth taxa-tion do nonetheless deserve considera-tion:

- Germany has opted for taxation ofasset-generated earnings, and lowered,or kept at low rates, taxation on hol-dings and transmission. At the sametime, it has kept its income tax high,with its top bracket taxed at a higher ratethan in France;

- the elimination of an overarchingwealth tax, in Germany and elsewhere,was in part due to the legal and politicaldifficulty in establishing satisfactorybases for the valuation of real estateholdings to be factored into the taxbase. In this respect, the French wealthtax (ISF), based on market value assess-ments, seems more robust. It suffers,however, from two intrinsic shortco-mings: a narrow tax base; and progres-sive rates that run higher than currentrates of inflation or of return on finan-cial investments;

- when it comes to taxation ofincome from assets, Germany recentlyopted for a flat and final withholdingtax. The French approach, combiningproportional social contributions with aState taxation that in turn juxtaposespayment according to scale and anoptional flat-rate levy in discharge, des-erves a comprehensive re-examination;

- lastly, the German situation regar-ding taxation of the transmission ofprofessional assets is characterised bythe absence of any imposition on dives-titure of company goodwill and shares.To benefit from these more favourableconditions, however, German compa-nies must submit to stricter require-ments regarding maintenance of jobsand activity in the event of transfer.

When it comes to environmentaltaxation, an examination of Germanlegislation reveals two areas in which arapprochement could bring out somebudgetary elbow room: taxation ofenergy consumption and of privately-owned vehicles.

The Big Choices Ahead

The comparison leads us toconclude that France must, in the nearfuture, remedy the divergences withGermany observed recently in terms offiscal policy and competitiveness. Thiswill not be possible without resorting to,inter alia, the tool of taxation.

In addition to the tax shelters thatdeserve re-examination, two areas offersome leeway: taxation on consumption,with the scope and rate of reducedVAT; and environmental taxation (taxa-tion of energy products and privately-owned vehicles). The additional revenuethus generated could be used to reduceGovernment deficits or to improvecompetitiveness by easing taxation onlabour and the costs of productionborne by our companies.


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In order to reduce costs and bolstercompetitiveness, priority could be givento employer contributions (family bene-fits branch) or to labour-based taxes thatincrease production costs. In time, fun-ding collected from firms for publicpolicies bearing no direct link to compa-nies (family, transport or housing poli-cies) could be phased out and graduallyreplaced by universal funding, providedthat due attention is given to the redis-tributive impact of such changes.

European Policiesand the Franco-German Frameworkfor Impetus andConsistency

The Limits of PoliciesIntroduced at the Level ofthe European Union

Within the European Union, theprovisions provided for in the Treatyregarding taxation are constrained bythe rule of unanimity. They are also gui-ded by one central objective: the smoothoperation of the internal market. Thefact that common bases and minimumrates for indirect taxes have been set hasnot prevented France and Germanyfrom pursuing divergent policies inrecent years. Tax competition within theEU is on the rise, especially given gro-wing heterogeneity among member

States due to enlargement. The traditio-nal tools for harmonisation are losingsteam, and many issues are in fact set-tled by the European Court of Justice.

The lack of any momentum towardconvergence within the EU is echoed inthe euro area, which is precisely whereconvergence is most needed. The reasoncan be found in the feebleness of thetools for coordinating economic poli-cies, which have proved unable to pre-vent certain States from pursuing“aggressive” corporate taxation policies.

The Possibilities of theFranco-GermanFramework

Assuming that there is a strong poli-tical will on the part of both States,several levers for action could be used tolock the two countries’ tax policies intoa dynamic of increasing convergence:

- the definition of common posi-tions that could facilitate the emergenceof a convergence process at the level ofthe European Union : Franco-Germancommon positions could constitute acore around which a broader form ofconvergence could emerge, for examplein the framework of closer cooperationas provided in the Treaty ;

- the identification of good prac-tices, each country being free toimprove the performance of its owntaxation system ;

- the implementation of a simplifi-cation programme aiming to offer bothenterprises and households concerned a


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guarantee of “convergence on a dailybasis” (cross-border business transfers,rules on transfer pricing).

This non-exhaustive list highlightswhat can be gained from continued jointeffort to analyse and resolve these diver-gences in taxation practices.

For these levers to be effective,however, they must be underpinned by astrong long-term political will. Theimpetus may be provided by the Franco-German Council of Ministers and thepivotal role played by the Franco-German Economic Council. There areseveral ways in which this could beachieved :

- regular exchanges (during the firsthalf of each year, in connection with

the “European semester” initiative onbudget policy run by the Commission)of a comprehensive nature on short-and medium-term tax policy orienta-tions in order to promote convergence ;

- an annual working programmeaimed at resolving technical or practicalproblems that cause difficulties for eco-nomic stakeholders and individuals ;

- comparative studies on topics rela-ting to taxes and social contributionsand their economic and social impact.

General Conclusions

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With regard to levels, structure and effective rates of tax and social contribu-tions, France and Germany are in many respects very close. The two countries couldjoin forces in order to further European initiatives in favour of greater tax harmo-nisation, for example in corporate taxation. Within the euro area, the scope ofFranco-European economic cooperation could be extended to cover taxation matters.

A comparison between the French and German taxes and social contributionsprovides many useful lessons, but also much for concern.

The structural Goverment deficit of France, to which the Cour des Comptes hasunceasingly drawn attention, is more than three points higher than in Germany. Itis above all due to the fact that France has proven less able than Germany to containthe rise in public expenditure. It is also linked to differences in the political princi-ples underlying tax policy (greater priority given in Germany to maintaining reve-nues, a philosophy focussed on economic neutrality) or budgetary policy (de facto pro-hibition of a sustained social security deficit).

Above and beyond these factors, certain elements bespeak a wider economicdivergence and arouse concern over the French situation. Germany, throughout thedecade beginning in 2000, has given priority to improving its competitiveness. Ittoday is reaping the benefits of this approach, which has had a positive impact oncosts, employment and the trade balance. Taxation policy has played a role in thisimprovement.

France cannot afford to let these factors of divergence go uncorrected. With res-pect to tax and social contribution policy, it must aim at redressing its fiscal policyand improving its competitiveness, within a sufficiently stable and predictable fra-mework. The comparison with Germany highlights potential areas for additionalrevenue collection (by rethinking certain tax and social cuts, the scope and rate ofreduced VAT, or the taxation of energy goods and transport) and the uses to whichit may be put (further reduction of deficits, lightening taxes and social contributionson labour).

For such changes to become truly effective, they must elicit the broadest possiblesupport on the part of political, economic and social stakeholders, and lead to anexplicit medium-term taxation strategy, enshrined in public finance programminglegislation, whose continuity is ensured over time.

List of Main Observations

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. General characteristics ofthe countries and their tax andsocial security systems:

�for some years, the economictrends in France and Germany, withregard to growth, export competitive-ness and the unemployment rate, havebeen divergent. The only aspect inwhich Germany has fared worse thanFrance has been the rise in inequalities;

�the rise in unit salary costs inFrench industry was ten points higherthan in German industry over theperiod 2000-2008; this trend, whichwas not specific to France, bridged thegap that existed at the beginning of thedecade ;

�the situation with regard to fis-cal policies is different: theGovernemnt structural deficit inFrance is higher than in Germany byover three GDP points ;

�compared with other Europeancountries, the burden represented bytaxes and social contributions is high inboth France and Germany. It has,however, had a tendency to decreasemore in Germany than in France. Thedifference between the tax-to-GDPratios amounts to 3.5 % of GDP, andtwo-thirds of this difference is due todifferences in the scope of the socialsecurity ;

�the consumption tax burden iscomparable in the two countries. Since2000, however, the trend has beendivergent: downward in France, due inparticular to the introduction of seve-ral reduced VAT rates, as opposed tothe recent rise in Germany, as well as inmost European countries ;

�taxation based on wages is at acomparable level in the two countries,although it has been decreasing inGermany in recent years, which is notthe case in France. Among the diffe-rent salary-based taxes, French compa-nies have several that are pegged to thewage bill (payroll tax, transport tax andapprenticeship tax in particular), theamount of which has increased since2000, but which do not exist inGermany ;

�taxation of capital, which haschanged little since 2000 in eithercountry, accounts for much of the gapbetween levels of tax-to-GDO ratios.Some taxes represent a higher burdenin France (property and transfer taxes),whereas others have no equivalent inGermany (Territorial EconomicContribution and C3S for companies,residence tax and, to a lesser extent,ISF wealth tax to which households aresubject) ;

�environmental taxation isdecreasing in both France andGermany, and is at any rate low whencompared with the rest of the


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European Union. The differencewould be even more marked if the sta-tistics did not take account of thetransport tax ;

�tax policies applied since 2000have differed in France and Germany.Any consideration of convergence ontaxation should take into account thatthe room to manoeuvre, in terms offiscal policy, is not the same in bothcountries. .Tax and social contributionsbased on household income :

�personal income tax, as a per-centage of GDP, is three times higherin Germany than in France (9.6 % and2.6% respectively in 2008), due to alower tax base in France, itself theresult of high fixed-rate cuts andcostly tax expenditures, and of a stee-per drop in the top marginal incometax rate in recent years. In France, thedrop in personal income tax has beenparalleled, for the last twenty years orso, by an increase in the CSG and theCRDS, which are strictly proportionalto income and which amount toaround 4.6 % of GDP (2008) ;

�social contributions, which inGermany are funded on an almostequal basis by employers andemployees, are marked in France by amuch higher employers’ share (11 %of GDP as opposed to 4 % foremployees), despite substantial exemp-tions for low salaries. In contrast toFrance, social contributions are effec-

tively regressive in Germany, due toceilings on the base and on theamounts ;

� the overall impact of thesetaxes and social contributions, despitemajor structural differences, on thecost of labour is quite similar inFrance and Germany, with a slightlyprogressive tax/social contributions“wedge”, close to 50 % in both coun-tries. Regarding allowances for chil-dren, the two systems achieve compa-rable results, although in France thesituation is somewhat more favourablefor families with three or more chil-dren, or for high-income families.

Taxation of wealth and assets :

�Germany’s policy choices haveresulted in a very low wealth tax bur-den, which only represents 0.85 % ofits GDP (2009), in other words, lessthan half the OECD average. France’sposition in this respect is diametricallyopposed, with wealth taxes represen-ting 3.41 % of its GDP, or more thantwice the OECD average ;

� the taxation of wealth and assetownership shows a clear divergencebetween the two countries. Germanysuspended (wealth tax) or did awaywith (professional tax on capital) taxeson capital stock in the late 1990s, andits property taxes have remained lowand stable over time. France, for itspart, has seen a steep rise in revenuesfrom property taxes, and is the onlyEuropean Union country that conti-


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nues to have a national wealth tax(ISF) ;

�the two countries have recentlyenacted very similar reforms in thefield of gift taxes, with the two-foldgoal of exempting, to a rather largeextent, small and medium property-holders, and facilitating the transfer ofcompanies. The two countries’ prac-tices nonetheless remain very diffe-rent, as both the base and the rates arelower in Germany than in France ;

�lastly, the taxation of incomefrom assets, although the overall yieldis comparable between the two coun-tries, is based on very divergentmechanisms, with a flat-rate levy indischarge almost everywhere inGermany, and in France scaled incometax and proportional social contribu-tions, with the latter increasing inimportance. Recent tax policy choiceshave led, in both countries, to highertaxation of capital gains. .Corporate taxation :

�corporate taxation has develo-ped in different directions in the twocountries over the last decade:Germany has greatly reduced theweight of its corporate tax, the rate ofwhich fell from 30/40 % in 1999 to15 % in 2008, whereas the level of cor-porate tax rate remained stable overallin France. Revenues from corporatetax amounted to 0.64 % of GDP inGermany (the lowest figure in the EU)as opposed to 2.53 % in France. This

observation, however, should be tem-pered by the fact that a large share ofGerman companies are classed aspartnerships ;

�Germany has a local corporatetax known as the Gewerbesteuer, orcommercial tax, the base of which issimilar to that of the corporate tax perse; the rate at which profit is taxed inGermany is, in our study, the sum ofthe two taxes. The resultant rate isslightly lower in Germany (31 %) thanin France (34.5 %) ;

� corporate tax in Germany ischaracterised by the search for neutra-lity, favouring a low rate and a broadbase. The French system, on thecontrary, is incentive-driven, with ahigher rate but a narrower base. Themost important corporate tax break inFrance is the research tax credit, whichhas no equivalent in Germany ;

�the two corporate taxation sys-tems are, on the whole, rather similar,and could eventually come to have thesame base ;

�France, however, has manytaxes on production, the most impor-tant of which are the payroll tax andthe transport tax, which togetherrepresent around 1.2 % of GDP.There is no equivalent to these inGermany. .VAT :

�VAT rates, and the share ofGDP they represent, are similar todayin both countries. This is, however, the


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result of a divergent trend over the last20 years: downward in France; upwardin Germany ;

�the sectors where reduced VATrate is applied are much broader inFrance than in Germany; in particular,the restaurant and catering trade andlabour-intensive services (buildingrepair work) benefit from a reducedrate, whereas in Germany this measureonly applies to the hotel sector ;

�alongside the reduced VAT rate,France has several exceptional rates(five exceptions to the normal rate andthe reduced rate) applicable to certainactivities (press and medication cove-red by the social security system aresubject to a super-reduced rate of2.1 %) and certain regions (Corsica,overseas départements) ;

�all in all, the efficiency ofFrench VAT in terms of yield appearslower than in Germany. Were Franceto adopt the rate and scope of reducedVAT practised in Germany, the addi-tional budgetary revenues wouldamount to €15 billion. .Environmental taxation :

�although France has twice failedin its efforts to introduce a carbon tax,Germany has been implementing agradual reform of its environmentaltaxation since 1999. In that year, areform (Ökosteuerreform) was pas-sed, which basically consisted of anincrease in taxes on energy products

(automotive fuels in particular) andelectricity, in order to lighten the taxburden on labour. The scope of thisreform has gradually expanded since2005, with, inter alia, the establish-ment of new environmental taxes:tolls on heavy goods vehicles, airtransport tax. Environmental taxationis thus more highly developed inGermany than in France ;

�when it comes to energy pro-ducts, both countries have heavy taxeson automotive fuels, while other fuelsare more lightly taxed than in the restof the European Union. Automotivefuel tax rates, however, are higher inGermany than in France. Likewise,electricity consumption is taxed moreheavily in Germany than in France ;

�Germany, like most Europeancountries, has a tax on motor vehicleownership. In France, since the aboli-tion of the annual tax on privately-owned vehicles in 2001, only corpo-rate passenger vehicles and the most-polluting vehicles (since 2008) aretaxed on an annual basis. However,there are three different taxes paidupon vehicle registration. In all, theFrench system seems more complex,and the resulting revenues are lower,than in Germany.

Summary of Main Recommandations

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The comparison of French andGerman taxes and social contributionshas served to shed light, throughoutthis report, on ways in which sometypes of deductions may be reformed.

In addition, the Cour desCompte’s findings include fourgeneral recommendations regar-ding tax policy as a whole : . conduct a systematic re-exami-nation of the merits of each tax andsocial contribution that, beyond man-datory social security contributions,brings about a rise in production costsfor companies, with special attentionto taxes based on labour ; . step up the reduction of taxand social system breaks, pursuant torecommendations by the Cour desComptes and the Conseil desPrélèvements Obligatoires, notably intheir recent Public Reports ; . draft a medium-term taxationstrategy, in order to provide all stake-holders with a predictable and suffi-ciently stable framework ; .as part of this medium-termstrategy, which must necessarily aim atreducing Government deficits andimproving competitiveness :

�begin phasing out labour-basedfinancing of public policy measuresthat are not directly relate to the enter-prise in favour of universal financingby society as a whole;

�to this end utilise, in particular,the leeway derived from reducing taxand social contribution breaks, as wellas from identified opportunities rela-ting to consumption and environmen-tal taxation;

�analyse their impact on wealthredistribution and consider, if appro-priate, the necessary support measures,such as changes to the social benefitsoffered or a progressive tax scale.

The comparison also led tomake two recommendations regar-ding upcoming steps for the jointwork between France andGermany:.pursue and deepen the technicalre-examination, on the part of bothadministrations, of the corporate taxbase, with a view to gradual harmoni-sation; .incorporate tax policy orienta-tions into the coordination of Frenchand German economic policy, recogni-sing the pivotal role played by theFranco-German Economic Council.

Lastly, the comparison has confir-med the merits of certain recommen-dations made previously by the Courdes Comptes aimed at ensuring morecoherent financial management forcentral and local government andsocial security.

Summary of Main Recommandations

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For this management to be suc-cessful, the overall strategy must beenshrined in a Fiscal PolicyProgramming Act that :

�takes precedence over existingFinance Acts and Social SecurityFinance Acts;

�contains the principle that nodeficit in social security accounts shallbe allowed.

Taxes and social contributions in France and in Germany, synthesis … · 2017. 6. 6. ·...

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