After a period of uncertainty, France finally adopted the 2025 Finance Bill 2025 on 6 February 2025. This law includes tax increases for affluent taxpayers and large companies.
Following the dissolution of the National Assembly in June 2024, the French Parliament found itself without a majority to pass legislation. A coalition government was formed in September 2024 to ensure France a budget for 2025.
However, Parliament rejected this Finance Bill, leading to the government’s collapse in December 2024.
To ensure the continuity of public services, Parliament passed an “emergency” law to manage the interim situation until the adoption of the 2025 Finance Bill, which is necessary to collect taxes and public funds to finance essential public spending.
The new government, appointed on 13 December, took over the project for the 2025 Finance Bill. By reducing the required savings, the new administration successfully secured the passage of the 2025 budget, with a final vote by the National Assembly on 5 February and a final vote by the Senate on 6 February.
The 2025 Finance Bill does not introduce any significant changes but does increase the financial contributions of affluent taxpayers and large companies.
The main new measures adopted are as follows:
- For businesses:
- An exceptional contribution is introduced for companies with a turnover in France exceeding €1 billion:
This contribution consists of a rate of 20.6% for companies with a turnover between €1 billion and €3 billion and 41.2% for those with a turnover exceeding €3 billion.
This rate applies to the amount of corporate tax owed by these companies.
- Taxation of share buy-backs by large companies: Share buy-backs by companies with a turnover exceeding €1 billion aimed at cancelling these shares will be subject to an 8% tax on capital reductions.
- Three-year postponement in the abolition of the CVAE (tax on added value of businesses), which had been planned under the 2025 Finance Law.
- Temporary limitation on the carry forward of deficits exceeding €2.5 billion: Exceptionally, companies with a deficit carry forward over the last three fiscal years exceeding €2.5 billion will no longer be allowed to treat the excess above €2.5 billion as a charge for subsequent years. This means the portion exceeding €2.5 billion will not be eligible for carry forward.
- For individuals:
- Indexation of income tax thresholds to inflation for 2024 earnings
- A differential contribution on high incomes is introduced for one year: Taxpayers with a reference taxable income exceeding €250,000 (€500,000 for couples) will now be subject to a minimum tax rate of 20%.
- Reintegration of deducted depreciation in the calculation of capital gains on the sale of furnished properties: The acquisition price used to determine the taxable capital gain will now be reduced by the tax-deducted depreciation, thus increasing the taxable capital gain.
- The tax administration’s deadline for recovery is extended to 10 years in cases of taxpayers falsely declaring domicile overseas.
Our experts are at your disposal to answer any questions you may have regarding the impact of these new measures on your situation.
