A true sea serpent, reducing the number of tax loopholes is on the menu of the 2026 budget project presented this Tuesday by the Lecornu government. While France is “one of the OECD countries that uses the highest number of tax expenditures” with 474 measures at a cost of 85 billion euros, “it proposes to eliminate 23 tax loopholes considered obsolete or ineffective,” reads the document consulted by BFM Business.
These are three types of niches. First, those that benefit few people and whose benefits to those who benefit from them are usually limited. These are generally small tax expenditures, such as “the exemption from income tax for the treatment associated with the Legion of Honor, the military medal and the labor medal” or “sums received in the context of the award of the Nobel Prize or equivalent.” The latter receive 11 million Swedish crowns (1 million euros), which will possibly be distributed among the winners if there are several.
Also covered are “deductions for expenses incurred by professional athletes for recycling”, the “property tax exemption on unbuilt properties in favor of wetlands”, or even the “axle tax exemption on heavy vintage vehicles”.
Taxation of diets for long-term illness
The draft budget also plans to end niches that are “larger in scale but whose justification or effectiveness is questionable.” For this reason, the text proposes taxing allowances for long-term illnesses, which should amount to 700 million euros.
Likewise, the tax reduction for secondary and higher education fees should be eliminated. The same applies to the special rate for B100 fuel (which benefits from reduced rates in favor of the road or rail transport sector) or with the progressive reduction of the tax advantage (special rate) for E85 fuel.
Finally, the draft budget aims to put an end to tax loopholes that no longer produce any budgetary effect. These include, in particular, exemption from income tax on financial aid for the creation or acquisition of a company and interest on deferred payment granted during the transfer of an agricultural holding, exemption from corporate tax on “French Tremplin” aid and aid to companies affected by the water crisis in Mayotte in 2023 or even tax credits for the training of business leaders and for the purchase of a company by its employees…).
However, the most expensive niches for the State seem to have been saved. Let us remember that 15 regimes alone represent more than half of the total cost of the niches, the most expensive being the tax credit for research (7.7 billion euros) and the tax credit for hiring an employee at home (6.8 billion euros).
Source: BFM TV
