France Promulgates 2026 Finance Act Following Constitutional Council Approval
PARIS, 21 February 2026 – The French government has officially published the 2026 Finance Act (Loi de finances pour 2026) in the Journal Officiel, marking the end of a protracted legislative battle. The enactment follows a decisive ruling by the Constitutional Council on 19 February, which validated the core pillars of the budget despite multiple legal challenges and the frequent use of Article 49.3 during its parliamentary journey.
Fiscal Consolidation and Deficit Targets
The 2026 budget is designed as a rigorous fiscal consolidation tool, aiming to reduce France’s public deficit to 5% of Gross Domestic Product (GDP), down from an estimated 5.4% in 2025. To achieve this, the government has introduced a combination of spending restraints and targeted tax increases. Public debt is projected to reach 118.2% of GDP by the end of the year, a factor that continues to draw scrutiny from international rating agencies and the Cour des Comptes.
Key measures include a significant overhaul of corporate taxation for large entities. Companies with a French turnover exceeding €1 billion will face a temporary surtax, with rates reaching up to 36.30% for those with turnover surpassing €3 billion. Additionally, the Act confirms the implementation of Pillar Two rules, ensuring a minimum effective tax rate of 15% for multinational enterprise groups.
Key Measures of the 2026 Finance Act
| Measure | Details |
|---|---|
| Small Parcel Tax | €2 levy per item for imports valued under €150 from non-EU countries. |
| E-Invoicing Mandate | Confirmed amendments to the timeline for mandatory electronic reporting. |
| Wealth Taxation | New income tax measures targeting high-net-worth individuals. |
| VAT Consolidation | Transfer of VAT provisions to a new Consolidated Tax Code effective 1 September 2026. |
E-Invoicing and Customs Reforms
The 2026 Finance Act provides much-needed clarity on the French e-invoicing and e-reporting mandate. Following several delays, the law confirms the technical framework and deadlines for businesses to transition to digital reporting. Furthermore, the budget introduces a specific €2 tax on small parcels imported from third countries (outside the European Union). This measure is intended to level the playing field for domestic retailers and address the environmental impact of high-volume, low-value e-commerce shipments.
While the Constitutional Council validated the majority of the bill, it issued two specific “interpretative reserves.” One notable reserve concerns the eligibility of non-EU foreign nationals for certain housing benefits (APL), ensuring the law remains compliant with constitutional principles of equality.
Frequently Asked Questions
When does the 2026 Finance Act take effect?
The law was promulgated on 20 February 2026, following its publication in the Journal Officiel. Most tax measures apply to the 2026 fiscal year, though specific provisions like the VAT code consolidation have a deferred start date of 1 September 2026.
What is the new tax on small imports?
The Act introduces a flat fee of €2 per item for small parcels valued at less than €150 that are imported into France from outside the European Union. This is aimed primarily at large international e-commerce platforms.
Did the Constitutional Council reject any part of the budget?
The Council validated the “essential” parts of the budget. It did not censor any major financial measures on their merits, though it did strike down a few “cavaliers budgétaires” (non-financial provisions incorrectly included in a finance bill) and issued two specific interpretative reserves.