France has enacted an interim law to keep public finances running through 2026 after lawmakers rejected the draft Finance Bill, which included measures such as higher corporate taxes, changes to GloBE rules, and adjustments to VAT and digital services taxation.
France’s government has published Law No. 2025-1316 of 26 December 2025 in the Official Gazette on 27 December 2025, authorising the State to continue collecting existing taxes to ensure the uninterrupted functioning of government operations until the Finance Law for 2026 takes effect.
The Law enumerates over EUR 45 billion in specific financial transfers allocated to local authorities, covering various compensation grants and operational subsidies.
Additionally, the legislation grants the Ministry of Finance the power to issue government debt and manage national treasury operations during this transitional period.
Promulgated by President Emmanuel Macron, the statute serves as a critical interim framework for maintaining the nation’s economic stability and administrative functions.
Earlier, France’s National Assembly rejected the revenue (tax) section of the 2026 Finance Bill on 22 November 2025.
To date, the French Parliament has not reached an agreement on or approved the Finance Law for 2026.
After weeks of public debate, a general vote held in November saw the Bill overwhelmingly rejected at its first reading, with 404 votes against, 84 abstentions, and just one vote in support.
During the initial debate, the National Assembly introduced several tax measures:
- The government’s GloBE proposals have a reduced EUR 500 million threshold.
- A temporary corporate income tax surcharge:
- 5% for companies with a turnover below EUR 3 billion
- 35.3% for companies with a turnover of EUR 3 billion or more.
- A required repayment of R&D tax credits for companies relocating abroad within 10 years.
- Introduction of a formulary apportionment to determine the taxable share of multinational profits.
- Increasing the digital services tax to 6%, with the turnover threshold raised to EUR 2 billion.
- Rejecting proposed VAT exemption reductions.
- Lowering the VAT rates on selected goods and services, including sports activities and fair-trade products.
