Four major tax niches targeted for 2026 budget
The French government plans to eliminate or reduce four major tax niches as part of the 2026 budget to generate significant savings. These measures aim to streamline tax expenditures that heavily burden public finances. Discussions are ongoing in Parliament, with presentation scheduled for October.
In the context of 2026 budget negotiations, the French government faces a major challenge: finding 60 billion euros in savings to balance public accounts. Among the options under consideration, four flagship tax niches are at risk, representing an estimated 10 billion euros in lost revenue for the state.
The first involves the tax advantage for impatriates, French expatriates returning home. This scheme, which partially exempts income tax for several years, costs 1.2 billion euros annually. "We must streamline our tax expenditures to restore market confidence," the Finance Minister stated during a recent hearing.
The second targeted niche is the research tax credit (CIR), a key support for innovation amounting to 7 billion euros yearly. While praised for boosting business competitiveness, calls for reform aim to curb abuses, though specifics on proposed cuts remain unclear.
The other two relate to capital gains relief: the "Copé niche," exempting share sales by executives, and the abatement for long-term shareholding, benefiting long-term investors. These mechanisms, from past reforms, are criticized for primarily aiding the wealthy.
The backdrop is tense: France has over 500 tax niches, totaling 100 billion euros in revenue losses. Parliamentary debates, started in late September 2025, pit majority and opposition on balancing fiscal fairness and economic attractiveness. No full eliminations are confirmed, but gradual reductions are likely, with potential impacts on jobs and investment if poorly calibrated.