French tax reform sparks business concerns

A tax reform introduced by the French government aims to promote fiscal justice but has raised concerns among business groups, especially the Movement of Medium-Sized Enterprises (Meti), which worries it may raise the cost of passing family businesses to the next generation.

Details of the deferred tax mechanism

The reform targets a mechanism known as "apport-cession," which allows entrepreneurs to delay paying taxes on capital gains when transferring shares to a holding company before reselling them. In some cases, this tax can be permanently waived during estate transfers through a holding company.

Government estimates and political responses

The government reported that 34 billion euros of capital gains were placed on deferred taxation by the end of 2023. The reform is expected to generate 500 million euros in revenue by 2027. Deputy LFI Shéhérazade Bentorki called the proposal "finally somewhat in the right direction," noting that two-thirds of the 34 billion euros involved only 84 wealthy tax households.

Amendments narrow the scope of the reform

Following debates, deputies approved an amendment from budget general rapporteur Philippe Juvin (LR), which limits the new taxation to certain donations and excludes inheritances. The revised measure applies to shares resold (cessions) within eight years of being transferred to a holding company (apport), under specific reinvestment conditions. The tax can also be paid over ten years.

Sub-amendment extends the reform's reach

A sub-amendment by ecologist Eva Sas, also adopted, extended the reform's application to older operations for donations made from October 1, 2026. This means entrepreneurs who used the tax arrangement in the past could be affected if they later transfer their estate by donation.

Reform narrowly passes in late-night session

The article was adopted in extremis by 25 votes against 23, just minutes before midnight. Some deputies criticized the timing, with Gérault Verny (UDR) calling it "ubuesque" that the reform could apply as early as October 1, before the law is even passed. The minister of Public Accounts, David Amiel, acknowledged that the wording still needed refinement during the parliamentary process.

Parliament faces heavy workload ahead

At the end of the session, over 2,800 amendments remained to be reviewed on the first part of the budget, which focuses on state revenues. The vote on this section is scheduled for Tuesday. If deputies fail to complete the review, discussions could be paused but not beyond November 17, the deadline for sending the text to the Senate.