The 2026 Finance Act is Published!

After several months of debate, the 2026 draft Finance Act has finally been adopted following the rejection of the last two no-confidence motions filed after the use of article 49.3 of the French Constitution. And against all expectations, the Constitutional Council has just validated almost all of the 2026 Finance bill, including the new tax on non-professional assets of holding companies and the tightening of the Dutreil pact.

The law has therefore been promulgated and published immediately. You will find below a quick overview of the main new measures concerning individuals and businesses.

Measures concerning individuals

While it was supposed to be frozen, the income tax scale for income earned in 2025, which will therefore be assessed in 2026, has indeed been increased, by 0.9%, to take inflation into account.

Furthermore, the differential contribution on high incomes, introduced temporarily last year, has finally been extended, until the public deficit falls below the 3% mark.

And, importantly, a new incentive scheme for rental investment has been created (“Relance logement”(1)). This will allow, within certain limits, the deduction from property income of depreciation for new or renovated apartments acquired to be rented out unfurnished as a principal residence for at least 9 years, and the charging of any property deficit resulting from this deduction against overall income.

Measures concerning businesses

Regarding measures affecting businesses, the plan to bring forward by 2 years the gradual abolition of the CVAE (Contribution on Business Value Added) has been abandoned. The maximum tax rate for 2026 and 2027 therefore remains frozen at 0.28%, before, in principle, being reduced to 0.19% in 2028 and to 0.09% in 2029. The CVAE is scheduled to be completely abolished in 2030.

Clarification: Among the other abandoned measures is also the lowering of the thresholds for application of the VAT exemption. They therefore remain set at €85,000 for retail, restaurants, or accommodation and at €37,500 for other activities.

Furthermore, the exceptional contribution in relation to the profits of large companies (turnover > €1.5 billion in 2026) has been extended for one year, without halving its rates, as initially planned.

Finally, the Finance Act provides several support mechanisms for farmers, including the renewal of the precautionary savings deduction (DPE) and the extension of the partial exemption from the reintegration of deducted sums, a new tax exemption for compensation received in the event of compulsory animal slaughter and used to rebuild a herd, the creation of a tax credit for collective mechanization expenses for members of a cooperative for the use of agricultural machinery (Cuma(2)) and the extension of tax credits for organic farming and high environmental value (HVE(3)).

(1) Housing stimulus.

(2) Coopérative d’utilisation de matériel agricole.

(3) Haute Valeur Environnementale.