The 2026 Finance Bill was voted down in its first reading, prompting the government to consider a temporary budget measure.
France’s National Assembly rejected the revenue (tax) section of the 2026 Finance Bill on 22 November 2025.
A general vote held the previous day resulted in the Bill being rejected at its first reading after several weeks of public debate, with 404 votes against, 84 abstentions, and only one vote in favour.
If the Bill does not pass in the Senate, the government is expected to introduce a temporary budget measure. This will allow the State to continue collecting current taxes and borrowing funds to maintain public services until the 2026 Finance Law and Social Security Finance Law are adopted—a procedure last used in December 2024 for the 2025 budget.
“We are only halfway through the parliamentary process, and I remain convinced that a compromise can be reached,” said Finance Minister Roland Lescure. “I remain confident that the majority of parliamentary groups will be able to find the necessary common ground to enable our country to have a budget and to approach 2026 with stability and visibility for our businesses and our fellow citizens.”
During several weeks of debate, the National Assembly introduced several changes:
- GloBE Rules: Approved the government’s proposed amendments and lowered the threshold to EUR 500 million.
- Individual Income Tax: Adjusted tax brackets for inflation, contrary to the government’s proposal to leave them unchanged.
- Personal Holding Companies: Limited the new tax to specific non-business assets and raised the rate to 20%.
- Real Estate Wealth Tax: Expanded to include certain financial assets, renamed the “tax on non-productive wealth,” and set at a flat 1% rate.
- Exit Tax: Restored the pre-2019 regime, allowing a 15-year period for full exemption.
Corporate Taxation Measures:
- Temporary corporate income tax surcharge confirmed with revised rates: 5% for turnover under EUR 3 billion, and 35.3% for turnover of EUR 3 billion or more.
- Companies relocating abroad within 10 years must repay the R&D tax credit.
- A formulary apportionment method will determine the taxable share of multinational profits in France.
- Digital services tax increased to 6%, with the turnover threshold raised to EUR 2 billion.
VAT Measures:
- The Assembly rejected the government’s proposed reduction in exemption thresholds.
- VAT rates were lowered on selected goods and services, including sports activities and fair-trade products.
Earlier, The draft Finance Bill for 2026, submitted to Parliament on 14 October 2025, which included key measures on corporate and personal taxation, VAT rates, and new levies.
