French lawmakers narrowly approved an amendment to tax multinationals based on their actual activity in France, but it faces uncertain future in the 2027 budget bill.
French lawmakers pass tax amendment
French lawmakers approved an amendment on October 27 that would require multinational corporations to pay taxes based on their actual activity in France, rather than the location of their headquarters. The amendment, proposed by Nicolas Sansu from the Gauche démocrate et républicaine party, passed by a narrow margin of 74 to 72 votes.Amendment aims to change tax basis
The amendment seeks to shift the tax base from "benefits declared in France" to "the share of global profits actually realized in France." Its goal is to ensure that companies pay taxes in line with the economic activity they conduct within the country, rather than where they are headquartered.Supporters highlight tax avoidance
Emmanuel Maurel, who backed the amendment, argued that multinational corporations often use aggressive tax strategies, sometimes close to tax evasion. He cited an estimate of 36 billion euros in taxes evaded by these methods, suggesting that the amendment would address this issue.Other proposals rejected
Two similar amendments were defeated. One proposed by Jean-Philippe Tanguy from the Rassemblement national received 59 votes in favor and 110 against. Another by Eric Coquerel from La France insoumise got 72 votes for and 72 against, resulting in a tie.Opposition cites international rules
Philippe Juvin, the general rapporteur of the budget from the Droite républicaine, opposed the amendment, saying it would violate international tax agreements. He argued that France can only tax companies based in the country and that taxing foreign profits would require specific bilateral agreements.Government rejects amendment
The government also opposed the amendment. Finance Minister Roland Lescure called it a "very bad idea" and criticized the portrayal of multinationals as "brigands." He emphasized the need to work within international frameworks to negotiate tax agreements rather than acting unilaterally.Amendment unlikely to survive
The amendment is unlikely to be included in the final version of the 2027 budget bill. The legislative process for the finance bill is not yet complete, and parts of the bill may be rejected, as seen with the social security budget.Government may use constitutional tool
The government may use Article 49.3 of the Constitution to adopt the 2027 budget, allowing it to retain elements of its choice from parliamentary votes. Alternatively, it could use ordinances, in which case the original text would remain in place.
