Oxfam targets France's Dutreil Pact over massive tax revenue losses

The NGO Oxfam has released a report criticizing the Dutreil Pact, a French tax mechanism established in 2003 designed to facilitate the transfer of family businesses by providing a 75% reduction in inheritance and gift taxes. While intended to protect the industrial fabric of France by preventing the forced sale of companies, Oxfam argues the system primarily benefits the ultra-wealthy.

According to Oxfam, the pact could result in a loss of over 111 billion euros for the French state over thirty years, specifically regarding the transfer of billionaire fortunes. The report notes that approximately 0.1% of heirs receive an average of 13 million euros while paying only 10% of the required inheritance tax. The annual cost of the tax loophole has risen significantly, from 1.2 billion euros in 2020 to over 5.5 billion euros in 2024.

As France prepares its 2027 budget amid rising public debt and deficits, Oxfam proposes several reforms to recoup revenue. These include reducing the tax exemption from 75% to 50% and capping the benefits at 1 million euros per beneficiary. Such measures could potentially reduce the cost of the mechanism to the state by more than 65%.