France’s lower house of parliament late on Tuesday approved two tax hikes targeting large multinational companies, intensifying pressure on Prime Minister Sebastien Lecornu’s government and heightening uncertainty around the country’s 2026 budget.
Lawmakers backed a new levy linked to global revenues and a doubling of France’s existing digital tax. The proposals, which emerged during the first reading of the budget bill, drew support from parties across the political spectrum. However, Finance Minister Roland Lescure warned the measures could breach international tax agreements and deter global firms from operating in France.
Analysts expect the conservative-controlled Senate to strike down the changes in the next stage of the legislative process.
Higher surcharge rates proposed
Under the amendments, France’s temporary corporate tax surcharge introduced in 2025 would be adjusted to raise roughly €6 billion in 2026 — down from €8 billion this year but about €2 billion more than initially planned in the draft budget, according to Barclays.
The revised structure would tax companies as follows:
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26.25% for firms earning €1–€3 billion
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33.825% for firms earning above €3 billion
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25% for companies below that threshold
Analysts noted that despite the slight moderation versus 2025 peaks, France would still have the highest corporate tax rate among OECD economies.
Impact on French corporates
Barclays estimates the proposed tax increase could trim net income for companies in the SBF 120 index by 5.6 percentage points, lowering 2026 earnings growth forecasts to 6.1% from 11.7%.
Industries most exposed to domestic revenues — including telecom and retail — face the greatest earnings pressure. Companies cited as potentially affected include Orange, Carrefour, Renault, BNP Paribas, Societe Generale, and Thales.
Persistent political friction and fiscal uncertainty are also expected to keep risk sentiment around French equities subdued, analysts added.
