France Debates 2026 Corporate Profit Surtax Amid Political and Business Disagreement

On January 17, 2026, French Economy and Finance Minister Roland Lescure provided an update on the ongoing discussions surrounding the proposed surtax on profits of large companies, a core component of the 2026 French budget. The surtax, heavily pushed by the Socialist Party (PS) to raise €8 billion, has been stalled in the National Assembly due to opposition from right-wing parties, including Les Républicains (LR) and President Macron's Renaissance party, who have rejected a government amendment reducing expected revenue to €6.3 billion from the initially proposed €8 billion in 2025 and €4 billion in the original 2026 budget. Lescure stated, "We are still finalizing the last estimates," revealing negotiations continue with Senate parliamentary groups on local government spending, indicating that the surtax remains under consideration rather than dead.

The government faces a key decision on whether to invoke Article 49.3 of the Constitution or use a budget ordinance to push the budget through without a vote, a move Minister Lescure prefers to avoid but deems necessary given the fractured political landscape. Concurrently, he confirmed an increase of €50 in the activity bonus, benefiting over three million low-income households, reflecting efforts to support vulnerable populations amid fiscal challenges.

Meanwhile, business group Medef, led by President Patrick Martin, has warned strongly against any tax hikes, describing the corporate profit surtax as "toxic" for investment climate and France’s economic attractiveness. Martin underscored the importance of deficit reduction to a maximum of 5% of GDP and called for all new expenditures to be funded by structural savings within the public sector. Medef also praised government measures to maintain charge reductions and welcomed housing initiatives addressing critical social needs.

This budget impasse highlights the fierce tug-of-war in French fiscal policy between left-wing demands for increased corporate contributions and right-leaning resistance backed by business interests. Prime Minister Sébastien Lecornu has postponed his speech intended to aid Socialist negotiations, leaving the final decision on the surtax and related budgetary matters imminent. Lescure concluded that precise figures will be presented soon as the government presses ahead to reconcile competing interests and ensure budget adoption amid complex political negotiations.