The Senate on Saturday rejected the surtax on the profits of large companies. This was one of the main proposals of the government which hoped to generate revenues of four billion euros in its draft budget for 2026.
The upper house, dominated by an alliance between the right and the centrists, rejected this measure by 202 votes to 118.
This exceptional contribution, made via a surcharge on corporate tax (IS), was introduced in the previous budget, with an expected return of 8 billion euros for 2025. The government proposed renewing it in 2026, while dividing it by two.
This Senate vote is not final since the measure will be examined again in Parliament following the budgetary debates.
Compensate with spending cuts
The surcharge would affect around 400 large companies, those with a turnover exceeding one billion euros. “It is incomprehensible that the government would choose this option of taxing businesses rather than reducing spending,” explained Jean-François Husson, general budget rapporteur (Les Républicains), recalling that the executive had assured on several occasions that this contribution would remain limited to the year 2025 alone.
The senatorial majority promises to compensate for this loss of revenue with spending cuts. This vote by senators once again shows the great differences that exist between the National Assembly and the Senate.
In fact, the deputies had not only approved this system but they had increased the rate thanks to a compromise amendment tabled by the government itself, to achieve a return of six billion euros. However, the deputies subsequently rejected the entire finance bill, causing this amendment to disappear from the text submitted to the Senate.
“The desire not to compromise”
The left, for its part, demanded an extension of the measure at least to the level of 2025. “Deleting this article is the demonstration that there is the desire not to have compromise, not to have a budget and to have instability in the country”, regretted Grégory Blanc, senators from the Place publique party which sits within the environmentalist group. “The right is indulging in one-upmanship to give assurances to its electorate,” lamented socialist Thierry Cozic.
The Minister of the Economy, Roland Lescure, defended the government measure, saying that “overtaxing companies that are doing quite well seems more favorable than seeking taxes that hit directly on the middle classes.”
The Senate, on the other hand, adopted a parallel system allowing the taxation of large companies repurchasing their own shares with a view to their cancellation, the result of a convenient alliance between the left and the centrists. But Amélie de Montchalin deemed it ineffective, estimating its yield to be zero.