The Budget Bill 2016 and the new law for the modernization of the French health system, which was voted by the Parliament on 17 December 2015, which was voted by the Parliament on 17 December 2015, are putting an end to the tax on the sales of cosmetics companies.

This tax was created in 2012 in order to provide funding to the activities of the National Agency for Medicinal and Health Product Safety (ANSM). All manufacturers and importers selling cosmetic products in France were required to pay 0.1% of the turnover thus generated.

According to the FEBEA, the tax was especially burdensome for small and...

According to the FEBEA, the tax was especially burdensome for small and micro businesses, which account for 85% of the cosmetics industry players.

The article 27 of the Budget Bill 2016 abrogate the tax while the article 166 of the new health law authorizes the Government to adopt specific measures to simplify the procedures implemented by the ANSM, including the abrogation of formalities related to cosmetic products.

The FEBEA (Fédération des Entreprises de la Beauté), the trade association representing in France the cosmetic industry (perfumery, cosmetics, hygiene and toiletries and hair products), welcomed the repeal of this tax. According to the association, the tax had "no economic justification."

Moreover, the tax came with aberrant red tape: companies had to provide the ANSM with a detailed (but useless) notification of their sales. This was especially burdensome for small and micro businesses, which account for 85% of the cosmetics industry players. The tax was only applicable to companies operating on the French territory, with no specific advantage in counterpart,” said the FEBEA.

The trade association said that the repeal of the tax is effective as of 1 January 2016.

However, the French Constitutional Council must validate the new law -including the articles regarding the tax before it is promulgated.