Finance Law 2026: Key Takeaways for Your Business

France's Finance Law 2026 (loi n° 2025-1680, published in the Journal officiel on 14 February 2026) introduces significant changes across the full fiscal and social spectrum. Corporate tax, income tax, VAT, employer contributions, CVAE: no area is left untouched.

For most business owners, parsing a budget text running to several hundred articles is a daunting task. This article provides an operational overview: the big picture, the figures that matter, and what you need to plan for concretely. For measures specifically targeting SMEs (reduced corporate tax rate, IR-PME, electronic invoicing), see our dedicated article Finance Law 2026: the 5 key measures for VSEs/SMEs.

The 2026 Finance Bill (PLF 2026) was rejected at first reading in the National Assembly, forcing the government to invoke Article 49.3 to pass a text heavily amended by the Senate. The result is a compromise between fiscal consolidation and support for activity.

The main tax burden falls on large corporations (exceptional corporate tax surcharge for groups with revenue exceeding €1 billion) and certain capital income. SMEs and the self-employed benefit from targeted relief measures. Three key trends emerge:

• Pressure on large groups is maintained — temporary corporate tax surcharge renewed for 2026.
• Administrative simplification advances slowly — a few thresholds raised, reporting obligations marginally eased.
• The CVAE phase-out trajectory is preserved despite calls to freeze it during parliamentary debate.

Extended 15% reduced rate for SMEs

The headline measure: the profit ceiling éligible for the 15% reduced corporate tax rate rises from €42,500 to €100,000 (CGI art. 219 I b, amended by article 31 of the law). Standard rate of 25% applies above this threshold.

Eligibility conditions remain unchanged: turnover below €10 million, fully paid-up capital, held at least 75% by natural persons. Maximum tax saving: €5,312 per financial year for a profitable SME at €100,000 net.

Exceptional contribution for large groups

Companies with turnover exceeding €1 billion remain subject to an exceptional corporate tax surcharge for FY2026. The surcharge rate ranges from 20.6% to 41.2% depending on the revenue bracket, bringing the effective corporate tax rate above 30% for the largest entities.

This measure, initially presented as temporary, is designed to finance part of the public déficit. For directors of mid-market companies (ETIs), the €1 billion threshold is a fiscal warning signal to anticipate in structuring stratégies. Transactions, mergers or group restructurings that could push consolidated revenue above this threshold should be modelled with the tax impact factored in.

Depreciation and provisions: no change in 2026

The declining-balance depreciation and regulated provisions régime is unchanged. However, the deductibility of financing costs remains capped at 30% of fiscal EBITDA (ATAD II rules), a key considération for leveraged holding structures. Interest charges on acquisition debt within a holding company must be carefully tracked to avoid exceeding this cap, which would result in a non-déductible surplus carried forward.

Progressive bracket revaluation

The progressive income tax bracket is revalued by 1.8% to account for inflation (2025 income, declared in 2026):

Flat tax maintained at 12.8% but social levies increase

The PFU (flat tax) remains fixed at 12.8% on capital income (dividends, interest, capital gains). However, the CSG increase under LFSS 2026 raises social levies to 18.6% (from 17.2%), bringing the global flat tax rate to 31.4%.

The option for the progressive bracket remains available and advantageous for households with a marginal rate of 11% or below, given the 40% dividend allowance. Beyond this, the 31.4% flat tax remains generally more favourable.

For a director setting their 2026 compensation strategy, the distinction between salary (taxed at the progressive rate) and dividends (taxed at 31.4% flat) now requires recalibration given the higher social levies.

Family quotient ceiling stable

The maximum benefit from each additional half-part of the family quotient remains fixed at €1,759 per additional half-part. No change is introduced on this point for 2026.

Higher VAT exemption thresholds

Finance Law 2026 raises the VAT exemption thresholds (franchise en base de TVA), allowing more micro-enterprises and independent workers to benefit from the exemption from filing and collecting VAT:

• Général threshold (goods sales): raised to €91,900 (from €85,800).
• Services threshold: raised to €36,800 (from €34,400).
• Tolerance threshold (temporary exceedance): maintained at one calendar year before mandatory switch.

This directly concerns micro-entrepreneurs, independent consultants and craftspeople whose turnover falls within these new bands. If your activity now exceeds the previous threshold but remains below the new ceiling, consult an accountant to evaluate the relevance of voluntarily opting into VAT.

VAT rates: no structural change

The four VAT rates in force remain unchanged for 2026:

• Standard rate: 20% — the vast majority of goods and services.
• Intermediate rate: 10% — catering, renovation works, passenger transport.
• Reduced rate: 5.5% — food products, books, medicines, equipment for disabled persons.
• Super-reduced rate: 2.1% — reimbursable medicines, online press.

E-invoicing: a VAT lever to anticipate

While the e-invoicing reform is technically a separate measure, it has direct VAT implications. The obligation to receive invoices from September 2026 affects all VAT-registered businesses. The e-reporting obligation will require periodic transmission of VAT data to the DGFiP, accelerating automated checks. An update to your invoicing software and déclaration process is now urgent.

CSG increase and impact on social levies

The LFSS 2026 raises the CSG rate on investment income and capital income from 9.2% to 10.6%, bringing total social levies to 18.6%.

SMIC revalued to €1,801.80 as of 1 January 2026

The gross monthly minimum wage (SMIC) rises by 2.2% to €1,801.80 as of 1 January 2026. This revaluation has a direct impact on:

• Employer costs for low-wage positions: approximately €2,200 gross employer cost for a SMIC-level employee, depending on applicable exemptions.
• The threshold for the général employer contribution réduction (applicable up to 1.6x SMIC): higher SMIC means the réduction applies across a wider salary range.
• The calculation of collectively-bargained redundancy indemnities and other allowances indexed to SMIC in certain sectors.

Contribution réduction for home employment and personal services

The home employment tax crédit remains fixed at 50% of éligible expenditure, up to a maximum of €12,000 per year (with higher ceilings for certain family situations). No changes to the scope of éligible services are introduced by Finance Law 2026.

CVAE: phase-out trajectory confirmed

Maximum CVAE rate lowered to 0.19% for FY2026 (from 0.28% in 2025). Full abolition remains scheduled for 2027, subject to confirmation by Finance Law 2027. Only companies with turnover above €500,000 are subject to CVAE; below this threshold, the charge is zero. For businesses above the threshold, the annual réduction in CVAE frees up meaningful cash flow.

CFE: no national change

The business property tax (CFE) is determined by local authorities (communes and EPCIs). Finance Law 2026 introduces no national changes to CFE base rules or rates. Changes to your 2026 CFE depend exclusively on décisions by your local authority.

Important note: the CFE exemption for new businesses (first year of activity) is maintained, as are the temporary exemptions for businesses located in designated territorial development zones (ZFU, ZRR, QPV).

Property tax and contribution on commercial premises

Property tax (TFPB) follows the revaluation of cadastral rental values, indexed to inflation. For 2026, this revaluation is set at +1.7% for both built and unbuilt properties. Owners of commercial premises should anticipate a slight increase in their property tax charge.

Finance Law 2026 is not a tax revolution, but it contains numerous technical adjustments that, taken together, can materially affect your tax burden. The SME corporate tax relief, the income tax bracket revaluation, the higher VAT thresholds, and the CVAE phase-out are positive signals for well-managed businesses.

The increase in social levies on capital income, the large-group surcharge, and the SMIC revaluation require a review of your compensation and cash flow décisions for 2026.