France to Ease Corporate Tax Surcharge and Encourage Employee Buyouts in 2027
Key Measures in France's 2027 Budget Plan
Reduction of Corporate Tax Surcharge
PARIS, Sept 9 (Reuters) - France plans to reduce, but not abolish, the exceptional corporate tax surcharge imposed on very large companies in its 2027 budget, Prime Minister Sebastien Lecornu said in a letter to executives on Wednesday, pledging tax stability to support growth.
Political Context and Budget Proposal
• The government, which lacks a majority in the lower house, is set to propose its budget in the coming weeks though several opposition parties have already said they would reject it.
History of the Corporate Surtax
• France introduced the temporary surtax on large companies in 2025 that was only supposed to last a year, but was rolled over into 2026 under a budget compromise.
Incentives for Employee Buyouts and Business Transfers
• In the letter, Lecornu also said that the government planned to introduce a new tax incentive to encourage business transfers, particularly to employees.
The "Papin Pact" and Accelerated Depreciation
• Under the planned "Papin Pact", companies taken over by staff would benefit from accelerated depreciation of new equipment needed for production, with enhanced support for small businesses.
Review of State Support for Businesses
Assessment of Investment and Innovation Incentives
• Lecornu said the government would review state support for businesses to determine whether they genuinely promoted investment, innovation, decarbonisation or production in France, or had become ineffective windfalls.
Commitment to No New Taxes
• He said there would be no new taxes in the 2027 budget, arguing that France could not restore its public finances by undermining economic growth.
Reaction from Employers’ Organisation
Medef's Response
• France's largest employers’ organisation Medef said it welcomed Lecornu’s message, saying it was necessary to address the concerns of business leaders.
Reporting Credits
(Reporting by Charlotte Van Campenhout; Editing by Alison Williams)
