France

Exceptional contribution on the profits of large companies (2025 and 2026)

The Finance Law for 2025 has introduced an exceptional contribution on the profits of large companies (i.e. stand-alone companies liable for corporate income tax [CIT] whose turnover is ≥ EUR 1 billion [turnover generated in France during the current or the previous Financial Year (FY)] or parent company of a tax consolidated group when the aggregate turnover of the group exceeds this threshold).

This contribution was initially only applicable for the first FY ending on or after 31 December 2025.

The Finance Law for 2026 extended the contribution for a second year but only to companies with a turnover greater than or equal to EUR 1.5 billion, (application to FYs ending on or after the day following the publication of the law – the 19 February 2026-).

The taxable basis corresponds to the average of the CIT due for the current FY and the previous one, based on total taxable profits before applying tax reductions, credits and tax receivables of any nature.

The applicable rates are the following:

*25% CIT / 3.3% additional contribution (disregarding relief) / exceptional contribution

**10% CIT/ 3.3% additional contribution (disregarding relief) / exceptional contribution

A smoothing mechanism was introduced to mitigate the threshold effect, for companies whose turnover slightly exceeds these thresholds.

The exceptional contribution is not deductible from the taxable income.

Capital gain on qualifying participation: introduction of a safeguard mechanism

The Finance Law for 2026 has established a safeguard mechanism to secure the benefit of the capital gain exemption regime. This applies to securities representing at least 5% of voting rights in a company or that were acquired through a takeover bid by the initiating company.

Companies can book these securities in a designated section of their balance sheet (‘securities subject to the long-term capital gains regime’). Choosing this option creates an irrebuttable presumption, in the case of a tax audit, that the securities qualify for the capital gain exemption regime, applicable to the capital gain taxation. Note that such booking is binding the taxpayer.

The new provision applies to FY ending on or after 31 December 2025.

Deduction of interest paid to minority shareholders companies

For CIT purposes, interest deductions paid to minority shareholders are in principle capped at the average rates credit institutions charge on variable-rate loans with maturities over two years.

The Finance Law for 2026 allows deduction of interest paid to minority shareholders companies up to the rate obtainable from independent financial institutions under similar conditions. This exception was previously only available to majority shareholders. The new provision applies to FYs ending on or after 31 December 2025.

Tax on capital reductions resulting from the buyback of their own shares by large companies

The Finance Law for 2025 introduced a tax on capital reductions resulting from the buyback of their own shares by large companies (i.e. French companies with individual or consolidated turnover > EUR 1 billion in the last FY). The tax applies to capital reductions resulting from share buyback operations with few exceptions.

The rate of the tax is 8% and the tax base is very specific (and not directly related to the fair value of the shares). It is not deductible from the taxable income.

Tax on non-operational assets of holding companies

The Finance Law for 2026 introduced a tax on non-operational assets of holding companies.

A French company subject to CIT or an individual shareholder (domiciled in France) of a foreign company subject to a tax equivalent to CIT or joint-stock company is subject to this tax if:

• the fair market value of the assets exceeds EUR 5 million
• an individual (defined as the family circle) holds directly or indirectly at least 50% of the shares
• passive income represents more than 50% of operating and financial income (excluding reversals, provisions and depreciation).

Where the holding company is resident, the tax base is the market value of the luxury assets held by the company on the closing date of the FY for which the tax is due (i.e. assets allocated to hunting and fishing ; vehicles not allocated to a professional activity, passenger vehicles, yachts, sailing or motor pleasure craft and aircraft ; jewellery and precious metals [except allocated to a museum or historical monument or exhibition in a place accessible to the public or to the company's employees], racehorses or competition horses, wines and spirits ; dwellings for which the individual retains a right of use [market value minus the debts attached to these assets, under certain conditions]). Please note that assets are excluded from the tax base in proportion to their allocation to an eligible professional activity.

Where the holding company is non‑resident and owned by an individual domiciled in France, the tax base consists of 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.

The tax, at a rate of 20%, applies as of the fiscal year ending on 12 December 2026. The tax is not deductible from CIT.

Public Country-by-Country (CbC) Reporting

In 2023, France implemented the Public Country-by-Country Reporting (CbCR) Directive into the French law to enhance transparency on the activities, results, and taxation of Multinational enterprises (MNEs) in the EU. The obligation to publish a Public CbCR applies to FYs beginning on or after 22 June 2024, with the return to be published within 12 months of the FY's end.

MNEs based in France and non-EU based MNEs operating in France through branches or subsidiaries, with total consolidated revenue exceeding EUR 750 million in each of the last two consecutive FYs, must publicly disclose certain income tax information specified by the French Commercial Code. Companies may choose to present this information in their public CbCR in the same format as their tax CbCR or in accordance with the French Commercial Code provisions.

The public CbCR must be published in the commercial court clerk's office and made available to the public. Companies can defer the publication of sensitive information, provided they state the reasons for non-publication, and publish the deferred information in a subsequent public CbCR within five years. While the French Commercial Code does not specify sanctions for non-compliance, any person can request the court president to compel the publication of the report.

Although tax and public CbCR share similarities, their definitions and interpretations differ. Companies must anticipate this reporting obligation and define how they will present the information in their public CbCR.

Please note that the first CbCR filing concerns groups with a 30 June year‑end and must be submitted by 30 June 2026, in respect of the FY ended 30 June 2025.

Implementation of DAC9

The Financial Law for 2026 introduced the possibility, as from 20 February 2026, for the Tax Administration to ask a constituent entity to file a corrected GloBE Information Return (GIR) if the information provided in the initial GIR contains manifest errors.

New 'green industry tax credit' ('crédit d'impôt au titre de l’investissement dans l'industrie verte' [C3IV])

The tax credit for green industry, introduced by the 2024 Finance Law and initially applicable to investment plans approved by the tax authorities no later than 31 December 2025, was extended by the 2026 Finance Law until 31 December 2028.

Eligible investment are expenditures incurred in connection with activities contributing to the production of batteries, solar panels, wind turbines and heat pumps.

The 2026 Finance Law also adjusted certain parameters of the scheme, such as:

• Eligible activities.
• Conditions to obtain approval.
• Rules for determining the tax credit (i.e. a general reduction by 5% points in applicable rates (now maximum 55%); the maximum total amount of the tax credit, set at EUR 150 million—or, for certain investments, EUR 200 million or even EUR 350 million—is now assessed on a per project basis rather than per company).

These modifications are applicable only to approval applications submitted as from 1 October 2025 and for which approval has not been issued by 31 December 2025.

French Electronic e-invoicing reform

Under the Finance Law for 2026, the e-invoicing framework has been technically refined and legally consolidated without altering its overall architecture.

The Finance Law for 2026 confirms the entry into force as of 1 September 2026, with the following obligations:

• From 1 September 2026:
• all companies must be able to receive electronic invoices though the e-invoicing obligation
• large and mid-sized companies must issue electronic invoices as part of e-invoicing obligation and files as part of e-reporting obligation.
• From 1 September 2027:
• SMEs will be required to issue electronic invoices as part of e-invoicing obligation and files as part of e-reporting obligation.

As of 1 September 2026, the reception of electronic invoices will apply to all companies established in France, whatever their size. In addition, regarding foreign companies not established in France but VAT registered in France, entry date regarding the e-reporting obligation will depend on their size, except regarding purchase e-reporting that will be applicable only from 1 September 2027.

Customs

The Union customs code (UCC), which came into force on 1 May 2016, originally provided for the implementation of interoperable national information systems.

However, the UCC and its delegated regulation granted a transitional period to European Union (EU) Member States to develop and adapt their IT systems by 31 December 2025, with the aim of dematerialising and facilitating the exchange of information between them.

In this context, a new customs clearance service, DELTA I/E (import/export) has been introduced in France.

This transition is now fully completed, and DELTA I/E Import has definitively replaced all existing customs clearance applications (DELTA G, ECS BC, DELTA X import and DELTA X export).

Within the framework of DELTA, I/E, the current customs declaration, the Single Administrative Document (SAD) has now been fully abolished and replaced by an electronic message including approximately 120 data elements.

Moreover, a new EUR 2 small parcel tax applies in France since 1 March 2026 to the importation of low value consignments below EUR 150 when using a H7 declaration. It is declared and paid by the person liable for import VAT. In parallel, the EU customs duty exemption for goods under EUR 150 will be abolished in July 2026, meaning that low value parcels will no longer benefit from the duty-free threshold when importing in the EU. A temporary flat duty rate of EUR 3 will be applied to low-value goods imported in the EU. A European handling fee should then be put in place at the end of the year - the French small parcel tax will then disappear.