The law was adopted by Parliament on 2 February 2026 after extended negotiations. It is expected to formally enter into force following review by the Constitutional Council and publication in the Official Gazette later in February.
The adoption process took place in a politically sensitive environment. The government does not hold a clear majority in the National Assembly, which required lengthy negotiations during the parliamentary process. Ultimately, the budget was adopted using Article 49-3 of the Constitution, allowing passage without a final parliamentary vote unless a motion of no confidence is approved.
Fiscal policy is also influenced by European Union oversight. France remains subject to the EU’s Excessive Deficit Procedure, and the government has committed to maintaining the public deficit below 5% of GDP in 2026.
Against this background, the Finance Act focuses on targeted fiscal adjustments rather than comprehensive tax reform.
Extension of the Corporate Tax Surtax for Large Companies
One of the most significant corporate tax provisions in the French Finance Act 2026 is the extension of the exceptional corporate income tax surtax originally introduced in the 2025 Finance Act.
The surtax applies to large companies with significant turnover generated in France. The contribution is calculated on corporate profits and applies to financial years ending on or after 31 December 2025.
The measure introduces two tiers of additional taxation depending on turnover:
- 20.6% surtax for companies with turnover between €1 billion and €3 billion
- 41.2% surtax for companies with turnover of €3 billion or more
These surcharges increase the effective corporate tax rate to approximately 31% and 36% respectively.
Under the 2026 Finance Act, the measure will apply for two financial years instead of one, meaning that companies will face the surtax in both 2025 and 2026.
However, the scope of the measure has been narrowed for the second year. The turnover threshold triggering the surtax increases from €1 billion to €1.5 billion in 2026, excluding some mid-sized groups from the measure.
Apart from this adjustment, the calculation method and applicable rates remain unchanged.
CVAE Phase-Out Confirmed Until 2030
The Finance Act also confirms the government’s long-term plan to eliminate the Contribution on Companies’ Added Value (CVAE), one of the taxes included in the territorial economic contribution (CET).
The CVAE is currently levied on companies carrying out business activities subject to the business property tax (CFE) when their annual turnover exceeds €500,000.
Earlier discussions during the legislative process included proposals to accelerate the elimination of the CVAE. However, these proposals were ultimately rejected.
The Finance Act therefore maintains the timetable set by the 2025 Finance Act, under which the tax will gradually decrease before being fully abolished in 2030.
The maximum applicable rates will decline progressively:
- 0.28% in 2026 and 2027
- 0.19% in 2028
- 0.09% in 2029
This gradual reduction is intended to balance the objective of reducing business taxation while protecting the financial stability of local governments that rely on CVAE revenues.
France Updates Pillar Two Rules and Global Minimum Tax Framework
Another key element of the France Finance Act 2026 is the continued integration of the OECD Pillar Two global minimum tax rules into French law.
France initially implemented the EU directive on minimum taxation through the 2024 Finance Act, introducing the core components of the global minimum tax system:
- Domestic Minimum Top-Up Tax (DMTT)
- Income Inclusion Rule (IIR)
- Undertaxed Profits Rule (UTPR)
Since then, the OECD has issued additional administrative guidance clarifying the application of these rules.
The 2026 Finance Act incorporates OECD administrative guidance published in June 2024, supplementing the earlier December 2023 guidance already included in French legislation.
The updated provisions introduce clarifications regarding:
- adjustments for deferred tax liabilities not reversed after five years
- definitions of ultimate parent entity and consolidated financial statements for mutual banking and insurance groups
- rules governing the allocation of Qualified Domestic Minimum Top-Up Tax (QDMTT) within multinational groups
- tax treatment of investment entities and insurance investment entities
- reporting requirements applicable to joint ventures
These changes aim to ensure that France’s implementation of the global minimum tax remains consistent with evolving OECD guidance.
DAC9 Transposition and EU Tax Transparency
The Finance Act also implements the EU directive adopted in April 2025, known as DAC9, which strengthens tax transparency across the European Union.
DAC9 expands the automatic exchange of tax information between Member States and enhances administrative cooperation between national tax authorities.
Under the new rules, the French tax administration will have the authority to request amended global information returns when previously filed reports contain clear errors or inconsistencies.
The directive reflects the EU’s broader objective of improving transparency and ensuring more accurate tax reporting by multinational groups operating within the single market.
New Temporary Tax on Small Parcels Imported into France
The Finance Act introduces a temporary tax on small parcels imported from outside the European Union, targeting low-value e-commerce shipments.
The levy amounts to €2 per item contained in parcels valued below €150.
The objective of the measure is to help cover the administrative and customs control costs associated with the rapidly growing volume of cross-border online purchases.
The tax will apply from 1 March 2026 until a coordinated EU-wide mechanism is introduced, and in any case no later than 31 December 2026.
Tax on Luxury Assets Held by Holding Companies
The legislation also introduces a 20% tax on extravagant non-professional assets held through holding companies.
This measure targets corporate structures used to hold high-value personal assets rather than assets used in business activities.
The tax applies when several conditions are met:
- the company’s total assets have a market value of at least €5 million
- an individual or family group controls at least 50% of voting or financial rights
- passive income accounts for more than half of the company’s total income
The tax base includes the market value of certain luxury assets that are not used in operational business activities, such as:
- yachts and aircraft
- luxury vehicles
- jewellery
- wine or spirits collections
- residential properties reserved for private use
The new tax will apply to financial years ending on or after 31 December 2026.
The government has described the measure primarily as an anti-tax-optimization tool.
Minimum Effective Tax for High-Income Individuals Extended
The Finance Act also extends the minimum effective tax rate for high-income individuals, originally introduced in the 2025 Finance Law.
The rule applies to taxpayers whose annual income exceeds:
- €250,000 for single individuals, or
- €500,000 for married couples or joint filers
If the taxpayer’s effective income tax rate falls below 20% of adjusted taxable income, an additional contribution must be paid to reach the minimum level.
The Finance Act extends this measure until France’s public deficit falls below 3% of GDP, linking it directly to the government’s fiscal consolidation strategy.
Taxpayers subject to the contribution must make an advance payment between 1 and 15 December each year.
What the French Finance Act 2026 Means for Businesses
Overall, the French Finance Act 2026 reflects a cautious fiscal strategy shaped by political compromise, EU budgetary oversight and ongoing international tax coordination.
The legislation introduces targeted measures affecting:
- large corporate groups subject to the corporate surtax
- multinational companies operating under Pillar Two global minimum tax rules
- holding structures owning high-value assets
- high-income taxpayers
While the Act does not introduce sweeping tax reform, it confirms France’s commitment to international tax standards, fiscal discipline and gradual changes to corporate taxation.
Businesses operating in France should therefore closely monitor the practical application of these new rules as they begin to apply throughout 2026 and beyond.
Sources/ recommended read:
- News on your rights and administrative procedures | Service Public
- Tax measures in Finance Act 2026 adopted in France
Frequently Asked Questions about the French Finance Act 2026
The French Finance Act 2026 is the annual budget legislation adopted by Parliament that introduces tax and fiscal measures for the year. The 2026 Act includes the extension of a corporate tax surtax for large companies, updates to OECD Pillar Two rules, implementation of DAC9 tax transparency rules and new levies targeting e-commerce imports and luxury assets held through holding companies.
The standard French corporate income tax rate remains unchanged. However, the Finance Act extends the temporary exceptional surtax on large companies, increasing the effective tax burden for groups with turnover above €1.5 billion.
The Contribution on Companies’ Added Value (CVAE) will be fully abolished in 2030. The French Finance Act 2026 confirms the timetable established by the 2025 Finance Act, with the maximum rate gradually declining between 2026 and 2029.
The legislation updates French law to incorporate OECD administrative guidance issued in June 2024 for the Pillar Two global minimum tax regime. The changes clarify deferred tax adjustments, allocation of top-up tax and reporting obligations for multinational groups.
The Act introduces several targeted taxes, including:
- a temporary €2 levy on small parcels imported from outside the EU
- a 20% tax on certain luxury assets held by holding companies
- the extension of a 20% minimum effective tax on high-income individuals