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France Finance Bill 2026: Key Provisions Explained

January 27, 2026

AGN EMEA Tax Committee News

This article provides an overview of the key provisions of France’s Finance Bill 2026, with a focus on the proposed tax on patrimonial holdings. Although the Finance Bill 2026 has yet to be formally adopted due to political uncertainty, its main revenue measures are now known. The article examines one of the bill’s flagship proposals, outlining the entities concerned, the conditions for liability, and the practical implications for both French and foreign taxpayers.

Introduction

Given the French political context and the lack of a majority in parliament, the finance law for 2026 has still not been adopted. Nevertheless, after a very long and eventful parliamentary process, the revenue part of the finance law is now known. Here is the presentation of one of its flagship measures, the focus on the tax of patrimonial holdings.

The entities concerned

The tax would apply to companies that have their registered office in France and are subject to corporate income tax (subject to specific exemptions for some investment entities, venture capital companies or listed real estate investment companies and equivalent foreign bodies). It would also apply to foreign corporations that are subject to a tax equivalent to corporate income tax or that are corporations.

Companies would only be subject to the tax if certain conditions are met:

The market value of all the assets they hold is greater than or equal to €5 million
At least 50% of them are owned by a natural person and his or her family circle. When the holding company is foreign, the above natural person must be tax resident in France
They receive passive income representing more than 50% of the cumulative amount of operating income and financial income over the entire year. Passive income includes dividends, interest, royalties, copyrights, rents and proceeds from the sale of assets generating the above-mentioned income

Taxpayers

When the holding company has its registered office in France, the text provides that it is the holding company that would be liable for the tax.

When the holding company has its registered office outside France, the tax would be payable by natural persons who hold 50% or more of it and who have their tax domicile in France.

The tax base

The tax base would vary depending on whether the holding company is French or foreign.

Where the holding company is French, the rate of 20% would apply to the sum of the market value of the assets exhaustively listed, held by the company on the closing date of the financial year in respect of which the tax is due: assets used for the exercise of hunting or fishing; passenger vehicles, yachts, sailing or motor pleasure craft, aircraft and vehicles not used for a professional activity; jewellery, precious metals, (except those used for the operation of a museum or a historical monument or exhibited in a place accessible to the public or to the company’s employees, with the exception of their offices); racehorses or competition horses; wines and spirits; housing that the controlling natural person reserves the right to use, housing occupied free of charge or for a rent below the market price, housing rented notionally (with, for the latter assets, a complex system of control of deductible debts). These assets are not taken into account (or only partially) if they are used (in whole or in part) for the exercise of an industrial, commercial, artisanal, agricultural or liberal activity during the financial year in respect of which the tax is due.

The basis of assessment of the tax would be different in the case of a foreign holding company. In this case, the person liable for the tax being the natural person who owns 50% or more of the holding company, the tax base would correspond to the fraction of the market value of the shareholdings held in the company having its registered office outside France representing the value of the assets mentioned above.

Practical application procedures

The procedures for declaring and collecting the tax vary depending on whether the holding company is French (in which case these terms are aligned with those of corporate tax) or foreign (in which case these terms are aligned with those of income tax).

Specificities applicable to natural persons liable for the tax

Natural persons who are members of foreign entities and liable for the tax for this reason would benefit from the possibility of offsetting against the tax similar foreign taxes on the same basis.

A system of capping the tax according to income would also be set up on the model of the one that currently exists in the field of IFI (wealth tax on real estate).

Coming into force

The tax would be due, when it is imposed on a French holding company, for financial years ending on or after 31 December 2026.

Relationship between the tax on holding companies and the IFI

As the tax on holding companies affects the assets of holding companies without excluding real estate, it risks being combined with the tax on real estate wealth and creating double taxation. This is why the text provides that shares in companies theoretically taxable to IFI for year N would be exempt from this tax when they have been subject to the tax on holding companies for the company’s financial year ended during the year preceding 1 January of year N.