The French Finance Law for 2026, published on 20 February, sets public spending, budget deficit and taxation rules, including new contributions for high earners and large corporations, support for green energy, and environmental levies.
France has enacted Finance Law for 2026 (Law No. 2026-103) and published it in the Official Journal of the French Republic on 20 February 2026.
Before promulgation, the Constitutional Court reviewed the legislation and validated most of its provisions. Only limited measures were annulled on procedural grounds. The Court’s decision, No. 2026-901 DC of 19 February 2026, was published alongside the law.
The Finance Law for 2026 establishes the legal and financial framework for France’s public accounts. It projects total public expenditure, excluding tax credits, of EUR 821 billion. Net general budget resources are estimated at around EUR 319 billion, against charges of EUR 452 billion, resulting in a projected general budget deficit of EUR 134.6 billion. To cover this gap, the law sets out a financing requirement of approximately EUR 310 billion, largely for deficit financing and the amortisation of medium- and long-term public debt.
On taxation, the law updates monthly withholding rates for employment income, ranging from 0% for lower earners to 43% for higher monthly incomes. It introduces exceptional contributions for large corporations based on profits and turnover, and establishes a differential contribution on high incomes for individuals. The legislation also addresses the taxation of passive income and capital gains, including in the context of transfers of individual businesses or branches of activity. Specific exemptions apply, including for commercial navigation activities carried out by vessels registered in Wallis and Futuna.
The budget provides funding for economic and industrial policy priorities, including allocations to the “Investir pour la France de 2030” mission and measures supporting agricultural competitiveness. It extends or introduces tax credits aimed at green industry and renewable energy, notably wind and solar power. The law also includes tax relief for taxpayers creating or resuming activities in priority urban neighbourhoods (QPV) and provides funding for vocational training and support schemes, including France Compétences and measures for disabled workers.
Territorial and local government financing remains a focus. Transfers to local authorities are maintained, including a Dotation Globale de Fonctionnement (DGF) of about EUR 27.4 billion. The law introduces a tax on vacant housing, applicable to dwellings left unoccupied for one or two years depending on local housing market conditions. Tailored financial and tax measures are included for overseas territories, such as specific VAT regimes for Mayotte and French Guiana and adjustments to local contributions.
Environmental measures form part of the package, with the introduction of a levy on PFAS (perfluoroalkyl and polyfluoroalkyl substances) discharged into the environment, new taxes on metallic radioactive waste, and revised tariffs for waste incineration and landfill use. Energy taxation is updated through revised excises on electricity and gas, setting standard rates while allowing reduced rates for sectors exposed to international competition.
Earlier, France finally passed its 2026 budget on 2 February 2026 after two no-confidence motions failed, allowing Prime Minister Sebastien Lecornu’s minority government to survive and bringing a measure of political stability.
