France addresses costly tax loopholes and retirement savings regulations

France is managing a vast network of nearly 470 tax loopholes, also known as tax expenditures, which represent a significant loss in state revenue. According to the 2026 Finance Bill, these measures cost approximately 89.4 billion euros in 2024 and are projected to reach 91.8 billion euros in 2025, accounting for about a quarter of net tax revenue.

The Court of Accounts has expressed concern regarding the stability of the number of these loopholes despite stated goals of rationalization and elimination. These mechanisms, which include tax exemptions and reduced rates, are intended to support specific economic sectors or assist vulnerable populations, but some remain under scrutiny for their limited effectiveness or niche benefits.

In conjunction with broader fiscal adjustments, the government is also tightening regulations on the Plan d'Épargne Retraite (PER) to prevent abusive tax optimization. Recent changes include prohibiting the opening of PER accounts for minor children to prevent wealthy households from deducting those contributions from their own taxable income. Additionally, contributions made to a PER after the age of 70 are no longer deductible from taxable income, a measure designed to stop retirees from using the tool primarily for tax avoidance or estate planning.