French Government Confirms 2026 Surtax on Large Company Profits to Fund Social Spending

The French government has confirmed the inclusion of a surtax on the profits of large companies in the 2026 budget, a measure aimed at generating substantial revenue to support social expenditures. Although Prime Minister recently omitted mention of the surtax in his January 16 speech, the Minister of Economy and Finance clarified the next day that the surtax would indeed be part of the budget, with ongoing negotiations in Parliament and among local government bodies to finalize details.

Projected revenues from the surtax are estimated between 6 billion and 8 billion Euros. These funds are intended to finance government priorities announced by the Prime Minister, such as increased activity bonuses and the creation of new positions within the National Education sector. The government also targets reducing the national deficit from the current 5.4% to 5% of GDP.

The measure was strongly advocated by the Socialist Party (PS), which wields significant influence over the budget process. Conversely, opposition remains robust from parliamentary parties like Les Républicains (LR) and Renaissance, as well as from business organizations, reflecting concerns about the surtax's economic impact.

Discussions are ongoing as the government seeks to avoid a parliamentary vote that could complicate adoption of the budget. Officials continue to refine the surtax's financial parameters and negotiate with Senate groups regarding the allocation of resources to local governments. Budget deliberations are set to resume on January 20.

This proposed surtax represents a notable fiscal policy move by the French government to balance social investment goals with macroeconomic stability, amid political contention. Its implementation and impact will be closely watched by stakeholders across the political and business spectrum.