Tax exemption cut for retirees

The French government has proposed reducing the tax exemption for retirees in 2027, limiting it to 3,000 euros from the current 4,439 euros. This change is part of a broader 1.2 billion euro savings plan aimed at reducing public spending.

Household-level application

The new rule would apply at the household level, meaning that couples both receiving pensions would not be able to combine their exemptions. This could affect how much tax retirees pay depending on their household income.

Tax impact for lower-income retirees

If the proposal is adopted, retirees with pensions under 30,000 euros in 2026 would not pay additional taxes in 2027. This is intended to protect lower-income retirees from increased financial burden.

Current exemption for non-retirees

The current tax exemption for non-retirees is 14,555 euros, and this amount is expected to be adjusted for inflation in the future. This exemption is higher than what would be offered to retirees under the proposed changes.

Opposition and legal challenges

The proposed tax change has faced opposition, with several amendments introduced during a plenary session at the National Assembly that aimed to invalidate the measure. These amendments reflect concerns from lawmakers about the impact on retirees.

Uncertain future for the proposal

The future of the budget proposal remains uncertain, as the government could still adopt it using Article 49.3 of the Constitution, which allows it to choose which amendments to accept. The debate over the budget is expected to continue until the end of the year.