France Calls for “Exceptional” Economic Contribution from Companies to Help Balance Public Finances
This temporary measure, first introduced by Barnier, marks the end of seven years of corporate tax reductions.
The new French Prime Minister, conservative Michel Barnier, had previously hinted at this temporary measure, although without detailing it, which brings an end to seven years of tax cuts.
The French government will impose a two-year “exceptional contribution” on around 400 companies based on their profits earned in France, according to the 2025 budget proposal presented this Thursday aimed at restoring public finances.
The measure, which will apply to profits earned in France in 2024 and 2025, will affect companies with at least €1 billion ($1.09 billion) in revenue. It is expected to generate a total of €12 billion ($13.1 billion) for public coffers between 2025 and 2026.
This temporary measure, first introduced by Barnier, marks the end of seven years of corporate tax reductions initiated by center-right President Emmanuel Macron.
Barnier took office at a time when public debt reached 112% of GDP by the end of June, and his government hopes to reduce the deficit to 5% by 2025, down from 6.1% this year, amid ongoing disciplinary proceedings by the European Union.
To achieve this, the plan includes €40 billion ($43.75 billion) in public spending cuts and €20 billion in increased taxes on large corporations and wealthy individuals.
In terms of revenue, the plan also introduces a special tax on large maritime transport companies, expected to bring in €800 million between 2025 and 2026. Regarding the aviation sector, the government is also considering raising taxes, though specifics are still under review.
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