France to Trim Big-Business Surtax, Boost Employee Buyouts in 2027 Budget
France will reduce its temporary corporate surtax in 2027, not scrap it, and introduce new incentives for employee-led buyouts.
Prime Minister Sebastien Lecornu has told business leaders that France will reduce — but not eliminate — the temporary surcharge on very large companies in its 2027 budget. The pledge, made in a letter to executives, is part of a broader effort to offer tax stability while supporting growth.
The surtax was first introduced in 2025 as a one-year measure but was extended into 2026 under a parliamentary compromise. The government, which lacks a majority in the lower house, is expected to present its budget in the coming weeks, though several opposition parties have already indicated they will reject it.
In the same letter, Lecornu announced plans for a new tax incentive aimed at encouraging business transfers, particularly to employees. Under the proposed "Papin Pact," companies taken over by their staff would benefit from accelerated depreciation on new production equipment, with additional support for small businesses.
The Prime Minister also said the government would review existing state support for businesses to assess whether it genuinely promotes investment, innovation, decarbonisation, or domestic production — or has become an ineffective windfall. He ruled out new taxes in the 2027 budget, arguing that France cannot restore its public finances by undermining economic growth.
France's largest employers' organisation, Medef, welcomed the message, saying it was necessary to address the concerns of business leaders.