French container ship giant CMA CGM will pay its share of any new state windfall tax.
But the company’s chief financial officer said the likely high cost will mean less cash is spent on its fleet.
Ramon Fernandez told Les Echos that a one-off tax on high-earning companies to fill a gap in France’s finances could cost CMA CGM €800m ($875m) over two years.
This will inevitably mean less investment in its vessels, he added.
And it will also be a “competitive disadvantage” globally, Fernandez said.
New French Prime Minister Michel Barnier has hinted he may need to widen the scope of corporate tax on what he sees as usually high earnings as the country’s budget deficit moves towards 6% of GDP.
In September, CMA CGM chief executive Rodolphe Saade told Reuters his company would pay up.
“We’ll be there,” he said.
CMA CGM has been sitting on vast cash piles after Covid and Houthi attacks in the Red Sea sent rates soaring.
“If there is a solidarity contribution for companies that have made profits, CMA CGM will take its share,” added Saade.
Leave the tonnage tax alone
But the CEO again voiced his opposition to any change in France’s tonnage tax regime.
Opposition parties have been considering scrapping the system whereby shipowners are not taxed on profit but pay a fixed fee based on tonnage capacity.
Saade believes this would hinder CMA CGM when competing with rivals in Asia and Europe.
Lobby groups and exports argue a higher tax rate could spark an exodus with potentially serious economic consequences, TradeWinds has reported.
According to the French Court of Auditors, the tax revenue loss from the regime reached €9.4bn in 2022 and 2023.
