The Dutreil agreement, a French tax rule that allows a 75% exemption on the value of family businesses when they are transferred, has sparked renewed debate as lawmakers prepare to discuss the 2027 budget. Critics, including the international charity Oxfam, argue that the agreement unfairly favors the wealthiest individuals, with the top 0.1% of heirs receiving an average of 13 million euros in tax benefits. In contrast, only 4% of those who benefit from the agreement are small business owners. Oxfam says the mechanism is more about enabling tax optimization for large corporations than protecting small and medium-sized enterprises (SMEs). According to the Court of Audit, over half of the tax advantages go to companies with more than 500 employees. Oxfam highlights the disparity in benefits, noting that the 1% most advantaged received an average tax reduction of 30 million euros between 2023 and 2024, compared to less than 40,000 euros for the 50% least advantaged. In total, 3.5 billion euros in tax benefits were given to just 110 privileged individuals in 2024. The charity also points out that the tax rate for transferring a business worth 2 million euros under the Dutreil agreement is lower than for a main residence worth 200,000 euros—4% versus 5%. In some cases, the rate can fall as low as 0.7% for larger donations. Oxfam argues that the agreement fails to protect French industry from foreign interests, as only 13% of transferred businesses are SMEs or mid-sized enterprises. They estimate that keeping the agreement as is could cost France over 111 billion euros over 30 years in lost tax revenue. Supporters of the Dutreil agreement, including the Senate Finance Committee, argue that France is relatively less favorable in business transfer taxation compared to several OECD countries. For example, Italy offers a 0% tax rate on transfers of up to 20 million euros. A 2026 Senate report, based on research from the Family Enterprises Chair at Paris-Dauphine University, states that 15 other OECD countries have more favorable tax rules for business transfers. The report also notes that 70% of French mid-sized family-owned companies are expected to transfer or sell their businesses within the next decade, with 90% of those managers having used the Dutreil mechanism. The Court of Audit and the Institute of Public Policies acknowledge that the Dutreil agreement has helped maintain family control over businesses, with more than 70% of companies that used the mechanism retaining the same type of shareholder control six years after a transfer. This is higher than the less than 60% retention rate for companies that did not use the agreement. The Court also found fewer foreign investors entering after transfers under the agreement, suggesting it has a “real effect” on preserving family control. However, the Court found no major impact on employment or investment, with similar rates of investment and job stability observed regardless of whether the agreement was used. The cost of the agreement to public finances was estimated at 3.3 billion euros in 2023 and 5.5 billion euros in 2024. Minister Sébastien Lecornu has signaled that the Dutreil agreement will likely remain in the 2027 finance bill, unless Parliament decides otherwise. Oxfam has proposed reforms, including limiting the tax benefit to one million euros, reducing the exemption rate to 50%, and strengthening tax oversight to ensure fairer distribution of benefits.