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French taxation and 2027 budget developments

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2026-10-27 12:04 UTC → 2026-10-29 11:12 UTC · added ~~removed~~

The French government has launched the 2027 budget debate in the National Assembly, aiming to reduce the deficit to 5% of GDP through 43 to 45 billion euros in spending cuts. While the Socialist Party intends to table a motion to reject the budget, the National Rally (RN) may prevent its passage by voting against it. Fiscal proposals include a 2.1% indexation of income tax scales to inflation and a potential 2.1% revaluation of tax abatements for taxpayers aged 65 and older. Specifically, the allowance for individuals over 65 may reach up to 2,881 euros per person, depending on net global income; for households earning below 18,041 euros, the full allowance applies, while those earning between 18,041 and 29,027 euros receive a reduced amount of 1,441 euros. For couples where both members are over 65, the allowance is doubled. Regarding capital income, deputies are debating amendments to the Social Security financing bill that could increase the flat tax, potentially pushing the total to 32.8% or as high as 41.4%. Pension reforms include a 1.4% revaluation for the Agirc-Arrco scheme, affecting over 14 million retirees, and new rules for combining employment with retirement income. The National Assembly has adopted an amendment proposing an early retirement leave option for workers aged 62 who have completed 42 years of insurance contributions. Additionally, a proposal to cap the 10% pension tax deduction at 3,000 euros was rejected. New amendments to the 2027 budget proposal introduce the ‘Pacte Genevard’ to support the agricultural sector. This includes adapting the ‘Pacte Papin’ to double the fixed capital gains tax abatement to one million euros for retiring farmers transferring holdings to new farmers.

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