France: Proposed tax measures in 2027 Finance Bill

The French 2027 Finance Bill—the last of Emmanuel Macron’s second five-year term—was published on October 1, 2026.

The bill includes the following tax measures:

• Additional one-year extension and rate reduction of exceptional surtax on corporate income tax applicable to largest companies with significant profits
• Introduction of temporary accelerated depreciation for small and medium-sized enterprises (SMEs) and mid-cap companies investing in “Industry 4.0” technologies
• Expansion of scope of tax credit for investments in “green industries"
• Exit tax triggered upon transfer of relevant shares by way of gift
• Withholding tax on copyright royalties determined under relevant treaty

The timetable for repealing the contribution on companies’ added value (CVAE) would not be modified. The CVAE will be repealed, as set out in the 2025 Finance Act, in 2030.

The bill is likely to undergo several amendments before its final adoption, generally expected before December 31, 2026, assuming the parliamentary procedure follows its normal course. However, this timetable may prove difficult to maintain, as parliamentary discussions in the National Assembly, due to begin on October 13, 2026, will be politically challenging given the absence of a majority in the National Assembly. In addition, France remains subject to an excessive deficit procedure opened by the EU Council in 2024, with the aim of reducing the public deficit to below 5% by 2029 at the latest.

Additional one-year extension and rate reduction of exceptional surtax on corporate income tax applicable to the largest companies with significant profits 

The exceptional contribution on corporate income tax for large companies, introduced by the 2025 Finance Act and first extended by the 2026 Finance Act, would be further extended to cover the third financial year ending on or after December 31, 2025 (i.e., 2027 financial year for companies with a calendar-year fiscal year).

The scope would remain limited to the largest companies. The annual turnover threshold triggering liability would remain at €1.5 billion but would need to be exceeded either in the third (FY 2027) or the second financial year ending on or after December 31, 2025 (FY 2026). Thus, companies (or tax groups) with turnover equal to or exceeding €1.5 billion in either the year in which the contribution is due (2027) or the previous year (2026) would be liable.

	Companies with a turnover of less than €1.5 billion in 2026 and 2027	Companies with a turnover superior to €1.5 billion in 2027 or 2026
FY 2027	No surtax	Surtax triggered

The rate of the exceptional contribution due for the third financial year ending on or after December 31, 2025, would be set at:

• 15.7% when the turnover for both the relevant year (2027) and the previous year (2026) is below €3 billion (compared to 20.6% for the first two years)
• 31.4% when the turnover for either the relevant year (2027) or the previous year (2026) is equal to or greater than €3 billion (compared to 41.2% for the first two years)

	Liable companies with a turnover of less than €3 billion for the FY in which the contribution is due (2027) and for the previous FY (2026)	Companies with a turnover greater than or equal to €3 billion for the FY in which the contribution is due (2027) or for the previous FY (2026)
FY 2027	15.7% (ETR 29.75%)	31.4% (ETR 33.675%)

As a result, the effective tax rate would be 29.75% for in-scope companies subject to the standard rate, and 33.675% for those subject to the higher rate.

All other rules for the application and payment of the tax would remain unchanged.

Introduction of temporary accelerated depreciation for certain companies investing in “Industry 4.0” technologies

An accelerated depreciation scheme would be introduced for industrial SMEs and mid-cap companies investing in Industry 4.0 technologies (e.g., robotics, 3D printing, artificial intelligence, digital twins, sensors, industrial software, immersive technologies, etc.). Eligible companies would be able to deduct from their taxable income an additional amount based on the acquisition cost of eligible equipment used for industrial activities.

The scheme would apply to new assets acquired, ordered or held under a finance lease between January 1, 2027, and December 31, 2029. The deduction would be spread over the asset’s useful life on a straight-line basis and would amount to 40% of the original cost of the equipment for medium-sized and intermediate sized enterprises, and 80% for small enterprises, with higher rates available in certain geographical areas.

Expansion of scope of tax credit for investments in “green industries”

The Green Industry Investment Tax Credit (C3IV), introduced by the 2024 Finance Act and extended until the end of 2028 by the 2026 Finance Act, supports investments at key stages of the production chain for batteries, solar panels, wind turbines, and heat pumps. This incentive, which relies on the new investment aid opportunities introduced under the Temporary Crisis and Transition Framework adopted by the European Commission (EC) in March 2023, aims to develop strategic sectors for the transition to a low-carbon economy.

Eligible expenses would now cover investments related to power grid technologies and permanent magnets for electric vehicle motors, in addition to certain expenses already covered. The credit would also be available for the solar thermal sector, including the manufacture of solar thermal collectors, photovoltaic thermal collectors, and solar absorbers.

This extension is based on the alignment between the scope of Section 6.1 of the new Clean Industrial Deal State Aid Framework (CISAF) and the Net-Zero Industry Act (NZIA), allowing the tax credit to be expanded to cover the other technologies included in the NZIA.

The tax credit remains subject to prior approval by the French authorities.

These changes would take effect on a date set by decree, no later than three months after the EC’s approval confirming the scheme’s compliance with EU State aid rules.

Exit tax triggered upon transfer of relevant shares by way of gift

The deferral of exit tax granted to taxpayers who transfer their tax residence outside France on or after October 1, 2026, would cease upon the transfer by way of gift of shares received in exchange for the contribution.

Withholding tax on copyright royalties determined under relevant treaty

When copyright royalties are paid by a French collective rights management organization to a foreign entity or organization, the applicable withholding tax rate would be the rate provided for under the relevant tax treaty between France and the recipient's country of residence. When the tax treaty exempts such royalties or does not provide for any withholding tax, a zero rate would apply. An anti-abuse clause would exclude from this provision any amount paid to members established in a non-cooperative jurisdiction for tax purposes, if the paying entity knew or could not have been unaware of this status.