Madelin Act (contracts for self-employed workers)
The French act of February 11, 1994 that lets self-employed workers deduct supplementary protection, health and pension contributions from their taxable profit, up to a ceiling.
The Madelin Act, named after business minister Alain Madelin, gave self-employed workers, craftsmen, shopkeepers and liberal professions, a tax framework comparable to that of employees covered by a group contract. Contributions paid into a Madelin protection, supplementary health or pension contract are deductible from taxable profit, within ceilings based on professional income and the annual social security ceiling. In return, the contract must meet conditions: regular payments for pensions, payout as an annuity, and benefits that are lifelong or cover incapacity. On the protection side, the Madelin contract remains the benchmark for the self-employed for sick leave and disability, where mandatory cover is thin. On the pension side, it has given way to the retirement savings plan created by the PACTE Act.
Passed on February 11, 1994, the act structured retirement savings for the self-employed for twenty-six years, until the sale of new Madelin pension contracts ended on October 1, 2020 in favor of the individual retirement savings plan.
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