Details of Tax Revenue – France. This page displays a table with actual values, consensus figures, forecasts, statistics and historical data charts for - List of Countries by Corporate Tax Rate. The content is straightforward. Tax planning 95% (instead of 80% currently) of the estimated corporate income tax charge of the subject financial year for companies with revenue between €250 million and €1 billion, 98% (instead of 90% currently) of the estimated corporate income tax charge of the subject financial year for companies with revenue exceeding €1 billion, 31% for financial years opened as from 1 January 2019 with the first €500,000 of tax result being subject to a 28% rate. Last reviewed - 16 September 2019. The Personal Income Tax Rate in France stands at 45 percent. The non-deductible portion of the royalties is computed with a ratio equal to this formula:  (25% less the effective tax rate) divided by 25%. Similarly (although not identically) to the German mechanism adopted as from 1 January 2018, France has now introduced a limitation of the deductibility of royalties paid to a related ultimate beneficiary that is not a resident of an EU or an EEA country and which benefits from a local tax regime listed as harmful by the OECD and offering a local effective tax rate below 25%. Dividends distributed by an EU or European Economic Area (EEA) resident entity that could be part of a French tax consolidated group for more than one fiscal year if it were subject to corporate income tax in France will also be 99% exempt from French corporate income tax, even if the French beneficiary company is not a member of a tax consolidated group (unless this is a result of a failure to make an election for the French tax consolidation regime at a time when that election was technically possible). Accordingly, the revised corporate income tax rates reflecting the surtax are: Competitiveness and employment tax credit (CICE). (4) According to Quebec's Corporate Income Tax Changes page, the general tax rate is reduced each year by 0.1% until 2020. France Corporate - Income determination Last reviewed - 16 September 2019. The chart below describes the rates of corporate income tax, currently and as enacted: According to an anti-abuse mechanism, these new provisions will apply to 2019 financial years opened as from 1 January 2019 but closed as from 6 March 2019 (the date when there was public announcement of the measure). No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. Our privacy policy has been updated since the last time you logged in. Corporate income tax Rate reduction trajectory. The Quebec March 27, 2018 Budget announced an increase in the small business deduction rate for small and medium sized businesses (SMBs) in sectors other than the primary and manufacturing sectors. The rates below apply on both State and early retirement pensions. If the debt:equity ratio of the company exceeds 1.5, the amount of the deductible financial expenses incurred in connection with: Related-party debts is reduced to €1 million or 10% of the adjusted “tax EBITDA,” whichever is greater. You will not continue to receive KPMG subscriptions until you accept the changes. The government is in the process of lowering the French corporate tax rate from 33.3 to 25 percent by 2022. All eligible expenses must be considered on a cumulative basis for each asset, product or product category. On 7 November 2017 the French National Assembly approved a new corporate tax exclusively for the year 2017. Income Tax. KPMG International provides no client services. Dividends distributed between French tax consolidated entities will now be 99% exempt from French corporate income tax, regardless of whether such dividend distributions are eligible (or not) under the parent-subsidiary regime. The bill states that the French corporate tax rate for large companies will drop from 33.33% to 25% over a five year period. Browse articles,  set up your interests, or Learn more. KPMG International and its member firms are legally distinct and separate entities. France tax changes for 2019; France, Tax Planning. Personal Income Tax Rate in France averaged 47.07 percent from 1995 until 2020, reaching an all time high of 59.60 percent in 1996 and a record low of 22.50 percent in 2015. Investment income is taxed at a fixed rate of 30% covering both income tax and social charges, with no change this year. 1.1 Business environment . Non-residents are subject to a flat rate of 20% or 30% (2020 on 2019 income) on France based net taxable income. The 3.3% surtax computed on the standard corporate income tax charge (after deduction of a lump-sum amount of €763,000) remains unaffected. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Efforts to control the increase in the tax burden have been made by the states of the OECD: the tax rate decelerated during the 90s and has decreased slightly since 2000. The company tax rate is 28% for profits up to 500k Euros, and 33.33% above this. The rates below apply on both State and early retirement pensions. France recently introduced a new bill that reduces the standard France corporate tax rate, marking the first reduction since 1993. We want to make sure you're kept up to date. For calendar year 2018, it amounted to 6% of the subject salaries. Introduction. All rights reserved. The tax authorities of the countries involved could decide not to follow the commission’s arbitration decision only to the extent that they reach an agreement to settle the issue. © 2021 Copyright owned by one or more of the KPMG International entities. As a general rule, the standard corporate tax rate is 28% for the fiscal years 2020 and 2021 (with a few exceptions). The lower rate will further decrease from 16.5% in 2020 to 15% in 2021. The corporate income tax rates will be reduced in 2020 and 2021 as shown in the following table: The quoted income tax rate is, except where noted, the top rate of tax: most jurisdictions have lower rate of taxes for low levels of income. The reference year used in 2020 is your income in 2018, as notified on your tax declaration and notice for 2019. We want to ensure that you are kept up to date with any changes and as such would ask that you take a moment to review the changes. France: Corporate tax measures enacted for 2019. France Corporate - Tax administration Last reviewed - 16 September 2019. We want to make sure you're kept up to date. For financial years opened as from 1 January 2020, companies and tax-consolidated group with a turnover equal to or greater than €250 million would be subject to corporate income tax at the standard rate of 31% (imposed on total profit amount) instead of the reduced rate of 28%. On the other hand, state tax rates vary by state. For financial years opened from 1 January to 31 December 2019, companies and tax-consolidated groups with a sales turnover of €250 million or more will remain subject to corporate income tax at the standard rate of 33⅓% (instead of the rate of 31% that applies for certain other companies). Since the last time you logged in our privacy statement has been updated. Find out how KPMG's expertise can help you and your company. The worldwide average statutory corporate tax rate has consistently decreased since 1980, with the largest decline occurring in the early 2000s. According to this provision, an arrangement or series of arrangements that were implemented in order to obtain (either as the main objective or as one of its main objectives) a tax advantage that is “not genuine” after taking into account all pertinent facts and circumstances are to be disregarded when computing the corporate tax basis of a French taxpayer. We want to ensure that you are kept up to date with any changes and as such would ask that you take a moment to review the changes. A relief mechanism is provided according to which consultative commissions could issue (non-binding) arbitration decisions that would apply when discussions between tax administrations fail to resolve the double taxation issue. Similarly, this test applies to the portion of interest deemed to be derived from external debts. A rate of 15% is applicable for dividends distributed by certain companies. Corporate income tax rate reduction. A lower rate of 16,5% (19% in 2019) applies to the first income bracket, which consists of taxable income up to EUR 200,000. Get the latest KPMG thought leadership directly to your individual personalized dashboard. Such a high tax rate on workers distorts labor markets and hurts economic growth. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. Reduction of corporate income tax rates. A “nexus” ratio is then applied on the (positive) net result. The Finance Law for 2019 introduced the following changes to the tax consolidation regime in an effort to provide that the French regime complies with EU regulations (and thus to avoid potentially new EU litigation): There is certain relief from the effects of the corporate income tax treatment of dividends distributed to a French parent company as follows: The Finance Law for 2019 implements Article 4 of the EU Anti-Tax Avoidance Directive (ATAD 1) in connection with the deduction of financial expenses, and thus aims at simplifying the existing financial expenses deduction restrictions under French law. 25% for financial years opened as from 1 January 2022. The corporate income tax rate would be gradually reduced to 25% by 2022. Going for Growth 2019. Today most European countries have rates below 50%. For more information, contact a tax professional with the KPMG member firm in France (KPMG Avocats): Mustapha Oussedrat | + 33 (0) 1 55 68 48 01 | moussedrat@kpmgavocats.fr, Patrick Seroin | + 33 (0) 1 55 68 48 02 | patrickseroin1@kpmgavocats.fr, Sophie Fournier-Dedoyard | + 33 (0) 1 55 68 48 24 | sfournier-dedoyard@kpmgavocats.fr. France: Corporate tax measures enacted for 2019 - KPMG Global Two other states (Alaska and Illinois) levy rates of 9 percent or higher. Personal Income Tax Rate in France averaged 47.07 percent from 1995 until 2020, reaching an all time high of 59.60 percent in 1996 and a record low of 22.50 percent in 2015. These measures include: Reduction of the standard corporate income tax rate. The Finance Act lays down the rate of tax that should apply for the assessment year 2019-20 and the rate of tax that should apply for withholding tax and advance tax … Currently, the federal corporate tax rate is set at 21%. Taxe sur la valeur ajoutée or TVA – VAT in French – is a tax on certain goods and services, which is included in the sale price. (However, it has been reported that the French government intends to restrict the 31% rate to companies whose turnover does not exceed €250 million. The taxpayer then would have to be “notified” of the final decision, at which point, the taxpayer could decide not accept it—in which instance, the procedure would be closed. Note 1: This includes corporate limited partnerships, strata title bodies corporate, trustees of corporate unit trusts and public trading trusts. A non-resident company is taxed on income derived from Taiwan sources. Introduction. KPMG refers to the global organization or to one or more of the member firms of KPMG International Limited (“KPMG International”), each of which is a separate legal entity. The standard TVA rate in France is 20%. For qualifying small-medium companies (turnover less than 7.63 million), there is a reduced tax of 15% on the first 38,120 Euros of profit. In 1980, corporate tax rates around the world averaged 40.38 percent, and 46.67 percent when weighted by GDP. Under specific conditions, an alternative ratio can be requested from the French tax authorities, under a strict ruling process. ... Corporate capital gains tax rate (%) Capital gains are subject to the normal CIT rate. The standard rate will decrease from 25% in 2020 to 21.7% in 2021. France is a founding member of the European Union (EU) and a member of the G7, G20, Organisation for Economic Co-operation and Development (OECD), and World Trade Organization (WTO). However, corporate income tax (CIT) rates differ substantially across countries, ranging from 9 percent in Hungary to 34.4 percent in France. The French government’s plan for a phase-down reduction of the rate of corporate income tax—ultimately to 25% in 2022— has been amended for 2019 for certain large corporate taxpayers. Through 2019/2020, France has maintained its efforts to promote tax transparency and to combat tax evasion and fraud. There are two taxable income brackets. A comparison of tax rates by countries is difficult and somewhat subjective, as tax laws in most countries are extremely complex and the tax burden falls differently on different groups in each country and sub-national unit. Among the developments affecting multinational companies (and subject to clarifications expected from the French tax authorities) are the following items. List of Countries by Corporate Tax Rate - provides a table with the latest tax rate figures for several countries including actual values, forecasts, statistics and historical data. By 2020, the whole taxable income of all companies will be taxed at 28%. This proposal is expected to be presented to the parliament during its fall session and as part of the discussion of the finance law for 2020. The tax would be deductible for corporate income tax purposes in France. Again, there are both federal and state corporation tax rates. As a consequence, this optional regime now only applies to the proceeds from the licensing or the sale of patents or assimilated eligible industrial property rights (“IP rights”) if the research and development (R&D) operations leading to the development of such IP rights have been conducted in France by the taxpayer (or tax consolidation group) or have been subcontracted to unrelated entities. 5.2.6. All rights reserved. For FYs closed as from 2021, all eligible expenses will have to be considered per asset, product or category of products, for the concerned FY and all previous FYs opened as from 2019. Rate 2020 2019 2018 2017 2016 2015 2014; Small profits rate (companies with profits under £300,000)-----20%: Main rate (companies with profits over £300,000) They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. List of Countries by Corporate Tax Rate - provides a table with the latest tax rate figures for several countries including actual values, forecasts, statistics and historical data. Click anywhere on the bar, to resend verification email. All European countries tax corporate income. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. The 1929-type Luxembourg holding companies are not entitled to any of the benefits of the France-Luxembourg tax treaty. This page displays a table with actual values, consensus figures, forecasts, statistics and historical data charts for - List of Countries by Corporate Tax Rate. As a result of simultaneous changes to the liability for social charges, effective from 2019 on 2018 income, the combined rate of social charges and income tax on French sourced income of EEA non-residents will fall to 27.5% (down from 37.2%), provided the income does not exceed the above threshold. The rules relating to the maximum tax deductible interest rate applicable to interest paid to direct shareholders—for financial years closed on 31 December 2018, the interest rate released by the French tax authorities is 1.47% (keeping in mind that a higher arm’s length rate may be applied under conditions), The non-deductibility of interest paid abroad if the beneficiary of the interest income is not subject in its country of residence to tax at a rate that is at least equal to 25% of the French standard corporate income tax rate (a reform of this mechanism is expected on implementation into French law of the “ATAD 2” provisions related to hybrid instruments by 1 January 2020), The “Charasse Amendment” restricts the deductibility of financial expenses incurred by a French tax consolidated group in situations involving the acquisition from a related entity of shares in a company joining the same tax consolidation group as the acquiring company. For qualifying small-medium companies (turnover less than 7.63 million), there is a reduced tax … In 2020, the standard Corporate Income Tax rate for all companies will be 28% on taxable income. Several other tax changes are also happening in France. Rate. The tax deductibility of financial expenses is now capped at the greater of €3 million or 30% of the company’s adjusted “tax EBITDA” (i.e., tax result subject to standard corporate income tax rate before interest, tax, depreciation and amortization expenses and offset of tax losses). The finding that an arrangement or several arrangements are “not genuine” will be based ultimately on whether such arrangement or series of arrangements were put into place for valid commercial reasons that reflect their underlying economic reality. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. Our privacy policy has been updated since the last time you logged in. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006. The 2019 budget, however, is one of those rare occasions where very little changes. The Corporate Tax Rate in France stands at 28 percent. The MLI entered into force in France on 1 January 2019. The 5% rate applies to gross dividends if the effective recipient is a Ukrainian company that holds, directly or indirectly, at least 10% of the French company’s capital. All of these measures are applicable at the level of the company subject to corporate tax on a stand-alone basis, or at the tax consolidated group level when the company is part of a tax consolidated group. Companies with minimum annual turnover of EUR 250 million: At the end of 2018, the French government decided to suspend an initiative that would reduce the corporate income tax rate for companies with a minimum turnover of EUR 250 million (to be assessed at the tax group level, if applicable) to finance “yellow jacket” measures (i.e. Notable Corporate Income Tax Changes in 2019. This is mainly shown by the quick transposition of DAC 6 into French domestic law, in October 2019 (see above: “Key developments affecting corporate tax law and practice”). A 25% rate applies if dividends are not included in the income taxed to either corporate or income tax. France (Last reviewed 16 September 2019) 33.33, plus a social contribution of 3.3% assessed on the amount of CIT. This trend is also illustrated by the 2020 Finance Law (adopted at the end of 2019) which: The standard rate applies to the excess of the taxable income. The 2017 French corporate tax rate was 15% of the taxable income up to and including €38,120, 28% up to €75,000 and above which the rate is 33.3%. However, the relevant corporate income tax rate remains at 33⅓% for the fiscal years opened on or after 1 January 2019. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact a tax professional with KPMG Avocats in France: Marie-Pierre Hôo | + 33 (0) 1 55 68 49 09 | mhoo@kpmgavocats.fr, Patrick Seroin | + 33 (0) 1 55 68 48 02 | patrickseroin1@kpmgavocats.fr. Federal corporate tax rate. In accordance with the calendar defined for 2019, the tax due for 2019 will be the subject of a single deposit payable in November 2019 on the basis of the 2018 revenue derived from in-scope activities. Iowa levies the highest top statutory corporate tax rate at 12 percent, followed by New Jersey (11.5 percent), Pennsylvania (9.99 percent), and Minnesota (9.8 percent). The Personal Income Tax Rate in France stands at 45 percent. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. It is 15% in all other cases. The average statutory corporate tax rate has declined in every region since 1980. Unrelated-party debt is capped to €3 million or 30% of the adjusted “tax EBITDA,” whichever is greater. Since then countries have recognized the impact that high corporate tax rates have on business investment decisions so that in 2019, the average is now 24.18 percent, and 26.30 when weighted by GDP, for 176 separate tax jurisdictions. The CICE (crédit d’impôt pour la compétivité et l’emploi) is a (refundable) tax credit based on wages paid by companies that did not exceed 2.5 times the minimum wage (so-called SMIC). The income bands for each rate have increased slightly to index them for inflation. Detailed information on the computation of the taxable basis will need to be attached to the annual corporate income tax return of the French company, and supporting documentation will have to be prepared and available upon request by the French tax authorities. You will not continue to receive KPMG subscriptions until you accept the changes. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. In 2019, the standard rate would drop to 31% (but the 28% rate still would be applicable on profits below EUR ... France alert: Finance bill for 2018 published, Global Tax alert The reference year used in 2020 is your income in 2018, as notified on your tax declaration and notice for 2019. Such services are provided solely by member firms in their respective geographic areas. Since the last time you logged in our privacy statement has been updated. Going for Growth (Cut-off date : December 2018) By country. Investment income However, corporate income tax (CIT) rates differ substantially across countries, ranging from 9 percent in Hungary to 34.4 percent in France. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. For more detail about the structure of the KPMG global organization please visit https://home.kpmg/governance. Europe’s average CIT rate (22.5 percent) is slightly higher than the global average (21.4 percent). (The ratio cannot exceed 100%). Corporate Tax Rate in South Korea averaged 29.08 percent from 1974 until 2021, reaching an all time high of 40 percent in 1975 and a record low of 22 percent in 2009. All European countries tax corporate income. In order to mitigate the consequences of Brexit on tax consolidation and to address instances when Brexit could potentially close or end certain affected French tax consolidated groups, the French tax groups will be maintained until the end of the financial year during which the withdrawal of the UK (or any EU Member State) occurs, when such withdrawal (indirectly) affects the conditions for French companies to be part of a French tax consolidated group. * Note: If taxable income is less than TWD 500,000, the tax rate is 18% in 2018 and 19% in 2019. At the moment, the standard corporate income tax rate is set at 31% for the 2020 fiscal year, while the 28% tax rate is imposed on the first EUR 500,000 taxable profit for the fiscal year started in January 2019 or after. Corporate Tax Rate in France averaged 37.73 percent from 1981 until 2020, reaching an all time high of 50 percent in 1982 and a record low of 28 percent in 2020. The rate reduction would be spread over the period from ... standard rate). For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006. However, there are reduced French TVA rates for certain pharmaceuticals, public transport, hotels, restaurants, and tickets to sporting/cultural events … Chapter by chapter, from Albania to Zimbabwe, we summarize corporate tax systems in more than 160 jurisdictions. Please note that your account has not been verified - unverified account will be deleted 48 hours after initial registration. 2020 Tax Budget. The French government’s plan for a phase-down reduction of the rate of corporate income tax—ultimately to This test applies to the portion of interest deemed to be derived from related-party debts (calculated on the basis of a specific ratio). This trend is also illustrated by the 2020 Finance Law (adopted at the end of 2019) … Please take a moment to review these changes. Income tax There are no changes to income tax rates, though the bands have increased very slightly with inflation. There are reductions for certain components of the social security contributions for employees and employers. This year is no exception, although the changes are rather muted compared to last year’s big reforms to the taxation of investment income and wealth tax. Social Security in France in 2019 France has some of the highest social security rates and contributions in Europe for both employees and employers, the 2019 rates and thresholds are defined below: KPMG International provides no audit or other client services. In 1980, corporate tax rates around the world averaged 40.11 percent, and 46.52 percent when weighted by GDP. For more detail about our structure please visit https://home.kpmg/governance. Get the latest KPMG thought leadership directly to your individual personalized dashboard. The corporate tax measures in the Finance Law for 2019 (ref 2018-1317 of 28 December 2018 and promulgated on 30 December 2018) generally have an effective date of 1 January 2019 (or are effective as from financial years (FYs) opened as from 1 January 2019). The 3.3% surtax computed on the standard corporate income tax liability (after allowing a deduction of a lump-sum amount of €763,000) remains unaffected. Europe has the lowest regional average rate, at 20.27 percent (25.13 percent when weighted by GDP). For fiscal years starting on or after 1 January 2022, a 25% CIT rate will apply for all companies. ... A reduced tax rate of 10% applies under restrictive conditions to capital gains on proceeds from the: Since 1 January 2019, the CICE is replaced by a permanent 6% employer social security contributions reduction applicable to the same eligible salaries. After all the tax avoidance strategies, many big companies pay less than half of the 21% tax rate set in 2017. The Global Revenue Statistics Database provides detailed comparable tax revenue data for African, Asian and Pacific, Latin American and the Caribbean and OECD countries from 1990 onwards. Europe’s average CIT rate (22.5 percent) is … KPMG International entities provide no services to clients. This page displays a table with actual values, consensus figures, forecasts, statistics and historical data charts for - List of Countries by Corporate Tax Rate. On 17 September 2019, the Dutch Government published its Tax Budget for 2020. The 0% rate will cover income up to €9,964 and the highest 45% rate income over €156,244. The Finance (No.2) Bill 2019 was presented in the Parliament on 5 July 2019 and was enacted into law on 1 August 2019. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The French standard corporate income tax rate is progressively reduced to: The 3.3% surtax computed on the standard corporate income tax charge (after deduction of a lump-sum amount of €763,000) remains unaffected. Corporate Tax Rate in South Korea remained unchanged at 25 percent in 2021 from 25 percent in 2020. ... the vendor has to join to its corporate tax return a specific form mentioning capital losses that are not immediately deducted. Subsidies and debt waivers between tax consolidated companies are no longer “neutralized” in computing the tax consolidated group result. France is a republic governed by a constitution. The 2017 French corporate tax rate was 15% of the taxable income up to and including €38,120, 28% up to €75,000 and above which the rate is 33.3%. The tax rate is fixed at 3%. The eligible expenses under (1) above are taken into account, for the determination of the numerator of the “nexus ratio,” for 130% of their amount. Table II.3. Data is also available for: indirect tax rates, individual income tax rates, employer social security rates and employee social security rates and you can try our interactive tax rates tool to compare tax rates by country, jurisdiction or region. The main rate of corporation tax reduces to 31% (from 33 1/3%). The social contribution tax is due by any corporation at the rate of 0.16% assessed on the revenue excluding VAT and after deduction of a EUR 19 million relief. The tax is imposed on net income, after determination of the tax liability under the standard scale rates. Targeted statutory corporate income tax rate. The “Carrez Amendment” (Article 209 IX of the French tax law) that limits the deductibility of financial expenses incurred in connection with the acquisition of certain participations, has been repealed. 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And to combat tax evasion and fraud has to join to its corporate tax remains... Below 50 % with inflation the KPMG logo and name are trademarks of KPMG International firms in respective! There are no longer “ neutralized ” in computing the tax avoidance strategies many. The information contained in herein is of a general anti-abuse regulation ( GAAR ) is slightly higher than the average... Albania france corporate tax rate 2019 Zimbabwe, we summarize corporate tax rates: Impôt sur sociétés., from Albania to Zimbabwe, we summarize corporate tax rates around world. Or other client services please visit https: //home.kpmg/governance neutralized ” in computing the tax avoidance strategies, big. Investment climate and regional partners for growth ( Cut-off date: December 2018 by! Client services certain components of the KPMG logo and name are trademarks of KPMG International after determination the! Serves as a coordinating entity for a network of independent member firms in respective. ( after deduction of a general nature and is not intended to address the of! Be 28 % stands at 25 % CIT rate this test applies the... The process of lowering the French tax authorities ) are the following items ( GAAR ) is slightly than. For employees and employers exclusively for the year 2017 0 % rate income over €156,244 2019 tax,! Other client services subscriptions until you agree to the new policy percent ( 25.13 percent weighted...