French National Assembly Extends Tip Tax Exemption Amidst Tense 2026 Budget Debates

On October 27, 2025, the French National Assembly voted to extend the tax exemption on tips paid by credit card until 2028, a measure initially set to expire at the end of 2025. Proposed by Laurent Wauquiez, leader of the Republican deputies, the amendment passed with 142 votes in favor and 48 against, receiving support from the National Rally and the right-wing. This decision aims to benefit both employers and employees in the hospitality sector, where tips contribute significantly to earnings. Wauquiez highlighted the measure as a support for the working population in France. However, Economy Minister Roland Lescure and some members of the left, including Finance Committee president Éric Coquerel, warned the extension could lower salary pressures and negatively impact worker morale. Lescure proposed a shorter extension until 2027 instead.

Meanwhile, the Social Affairs Committee of the National Assembly started examining the Social Security Financing Bill for 2026. The bill aims to reduce the solidarity system deficit from €23 billion in 2025 to €17.5 billion in 2026. The proposed savings have sparked opposition from various lawmakers, including government allies. Work on this bill was delayed by four days to integrate a rectifying letter addressing the suspension of the pension reform since April 2023, requiring updated budget conditions and trajectory.

In addition, the debate on the controversial Zucman tax, a measure targeting wealthier taxpayers, was postponed by Minister Lescure due to his overseas commitments. He stressed the importance of his presence for the discussion of several amendments related to his portfolio. Discussions on the 2026 budget, including fiscal measures and social security financing, will continue between the National Assembly and the Senate until at least mid-December, indicating ongoing intense parliamentary negotiations.