French Government Projects €8 Billion from Corporate Surtax in 2026 Budget Amid Political Maneuvers

The French government has announced that a surtax on the profits of large companies will generate approximately €8 billion in the final 2026 budget proposal, doubling earlier projections of €4 billion. This increase matches the revenue from the same surtax in 2025, indicating a steady continuation of this fiscal measure. Importantly, medium-sized enterprises (ETIs) will be exempted from this surtax, responding to a significant demand from the Socialist Party and helping to reduce political opposition to the budget.

Government spokesperson Maud Brégeon revealed this development on January 18, 2026, emphasizing that the exemption aims to respect concerns of the socialist opposition, which had signaled potential censure over the budget. Meanwhile, the government decided to abandon a planned reduction of the Contribution sur la Valeur Ajoutée des Entreprises (CVAE), a move initially favorable to business leaders, as communicated by Prime Minister Sébastien Lecornu in a letter to them.

A crucial council of ministers meeting is scheduled for Monday where Prime Minister Lecornu will choose the constitutional instrument to finalize the budget’s passage, weighing options between invoking article 49.3 of the constitution or using a budget ordinance. This reflects the tense political context surrounding the budget's approval.

In parallel, the government’s 2026 fiscal agenda also includes restoring progressive income taxation targeting wealthy households, a move aligned with the opposition’s plans to increase taxes on affluent groups. These tax reforms are unfolding amid broader geopolitical tensions, with President Emmanuel Macron calling on the European Union to employ its 'anti-coercion' instrument in response to U.S. tariffs.

This comprehensive approach to taxation and fiscal policy underscores the government's attempts to balance revenue generation, political negotiation, and economic diplomacy in the current French and international context.