After a marathon of parliamentary procedure, France finally has a budget for 2025. On Thursday, February 6, the Sénat passed the budget, meaning it was definitively adopted.
The legislation is meant to help contain the country's public deficit at a level of 5.4% of GDP in 2025 – a slightly less ambitious target than the 5% figure that had been the short-lived government of Prime Minister Michel Barnier, which had drafted a budget before collapsing in December. Barnier's successor François Bayrou succeeded in navigating a divided Parliament to pass the budget after a record delay.
Here are the main measures included in the legislation, which still has to be examined by the Constitutional Council before it becomes effective.
See a measure in the budget:
Major companies will have to pay an exceptional surtax on their profits. Their corporate income tax will be increased by 20.6% or 41.2%, depending on the scale of their total sales revenue. For a group like LVMH, which has said it pays €2.3 billion in corporate income tax, this could represent an additional €900 million. This has sparked the anger of Bernard Arnault, LVMH's CEO, who has joined together with several other major French business leaders in an anti-tax crusade.
This temporary surtax should affect some 440 companies with sales revenues above €1 billion. It is expected to generate €7.8 billion for the public treasury in 2025, before disappearing in 2026.
This was one of the new taxes that Barnier's government had come up with to fill up state coffers and that survived after that government was toppled. It aims to tax share buybacks – an increasingly widespread financial practice in which a publicly traded company (such as BNP Paribas, TotalEnergies or Airbus) buys back its own shares in order to take them off the market, thereby systematically increasing the value of its shareholders' remaining shares and enabling them to be indirectly remunerated, without going through dividends. The new tax measure is expected to generate €400 million for the government budget in 2025.
The "Tobin tax" on financial currency transactions, which also applies to purchases of shares in large publicly traded French companies, has been raised. While some MPs had campaigned for the expansion of the types of transactions concerned by the tax, the government chose to increase the tax rate instead. It will rise from 0.3% to 0.4% on April 1, which should bring in around €600 million more in yearly revenue.
The corporate added value contribution (CVAE) is a production tax that has been decried by business leaders, which affects all companies subject to the corporate land contribution (CFE) with sales revenues above €500,000. Its gradual abolition, which had been supported by Macron's coalition, has finally been postponed – from 2027 to 2030.
However, as the vote on the 2025 budget had been delayed, a reduction in the CVAE rate planned for January 1 had already come into effect. Rather than retroactively going back on it (which would have implied legal risks), lawmakers instead adopted a "complementary contribution" measure, which aimed to cancel out the effects of the reduction that had already been applied. In the end, the CVAE tax increase should bring in €4.24 billion in 2025.
An "anti-tax optimization" tax on the country's highest-income individuals has been established, to ensure that these taxpayers at least pay a minimum tax rate of 20%.
Those affected by the measure will be taxpaying households with a reference taxable income above €250,000 for a single person (€500,000 for a couple) – around 24,000 tax-paying households (0.06% of the total nationwide). This temporary surtax is expected to bring in €1.87 billion in 2025, before being replaced with a "perennial measure to combat unfair tax optimization," in 2026.
The solidarity tax on airplane tickets has been paid by passengers on commercial flights departing from France since it was implemented, in 2006. The budget's raising of this tax will, in the end, be less significant than it had been in the version of the budget discussed last fall: It is set to rise from €2.63 to €7.40, for economy class flights to European destinations. In addition, new categories of flights will be subject to a surtax: Long-haul flights, for which the tax goes from €7.50 to €40; and business aviation, for which passengers will have to pay €420 for a short-haul flight and €2,100 for a long-haul one. The tax revenue from this measure is expected to rise from €460 million in 2024 to almost €1 billion in 2025.
A tax credit that allows companies (particularly those classified as self-employed entrepreneurs and micro-businesses) to avoid charging value-added tax (VAT) has been restricted: The cap on sales revenues eligible for VAT exemption has been lowered from €37,500 to €25,000. Moreover, a prior exception for businesses providing accommodation, whose revenue threshold had been set at €85,000, has been abolished.
The National Federation of Self-employed Entrepreneurs (FNAE) has estimated that an additional "250,000 autoentrepreneurs" will now have to include VAT in how much they charge for their services. This measure, which had not featured in the Barnier government's version of the budget, was introduced by the Sénat, which saw it as a means of "simplifying" the system and combating "distortions of competition" that were harmful to small companies and other European businesses.
Since its creation, in 1983, the research tax credit (CIR) has become France's leading tax break. This measure has enabled companies to render a large proportion of their research and development spending exempt from taxes. In 2024, the government had, through this tax break, "given back" €7.7 billion to companies. The final version of the budget restricts eligible expenditures and does away with some of the CIR's flagship provisions, such as a 200% tax exemption for young doctors' salaries.
Local authorities throughout France will see their budgets cut by a total of €2.2 billion in 2025, as the state is set to drain more money from their revenues. This figure represents half of the €5 billion savings effort they had been asked to make in the Barnier government's version of the budget bill.
Lawmakers listened to regional authorities' angry reactions, as the level most affected by the cuts, and, in particular, their fears of plummeting local investment. In particular, they dropped a much-criticized measure, the "reserve fund," which had aimed to withdraw €3 billion from the operating revenues of the 450 largest local authorities, ranging from the regional to the municipal level.
Environment-related public spending this year will be cut by almost 14%, reduced to €21 billion. One of the victims of this spending cut was the "green fund," which finances environmental transition investments at the local level. While the Socialists claimed its non-abolishment as a victory, it has been greatly cut down, going from €2.5 billion to €1.1 billion. As noted by the website Reporterre, it now also covers additional types of spending, such as a bicycle path construction program.
The budget for MaPrimeRénov', one of the government's main programs to support household energy renovation, was also reduced, going from €3.3 billion to €2.3 billion. The government has justified this by pointing out that the program's 2024 budget had been far from fully consumed, and that stepping up the fight against fraud will allow more money to be saved.
Lawmakers decided to freeze the level of spending for State Medical Aid (AME), the only healthcare coverage available to undocumented migrants, rather than apply the 9% increase that the Bayrou government had planned for 2025, which had been aimed at covering costs linked to rising inflation and an expected increase in the system's number of beneficiaries.
However, this spending cut, which had been pushed by the right, did not come with any measure to tighten the conditions for access to the AME, nor any cap that would limit spending. It is, therefore, not certain that the AME budget will actually decrease this year.
The public budget for higher education and research has been cut by €1 billion compared with 2024, standing at €31.3 billion.
One of the measure's biggest impacts will be on research: A quarter of the research budget will be cut for the field of sustainable energy, development and mobility (reduced by €480 million), and the budget for economic and industrial research will be almost cut in half (it was set to €347 million, compared with €678 million in 2024).
The budget for culture, which has been cut by €150 million, is still set to stand at just over €4 billion. Cultural creation was the only item to have seen its funding increased, to €45 million. The sums allocated to national heritage projects have fallen by €200 million, the "transmission of knowledge and democratization of culture" has lost €20 million, and the "Culture Pass," a program to help young people access cultural events and products, has seen its budget drop from €97 million to €72 million.
The development aid budget has been slashed by €1.2 billion, down 18.6% compared to 2024. This budget cut was even more severe than that which had been anticipated in the fall, in the Barnier government's budget bill. As indicated in the first draft of the bill, the 2025 budget also marks an end to a system that had automatically allocated a part of certain taxes to development aid, notably a tax on financial transactions and the solidarity tax on airplane tickets.
The budget allocated to sports is down by 10% compared to 2024, standing €695 million. This reduction was smaller than what the Bayrou government had initially planned, as it had wanted to cut a further €34 million. However, when faced with uproar in the sporting world, lawmakers rejected this proposal.
The blow to the sports budget has been cushioned by the removal of a cap on the tax on online sports betting: The additional €80 million unlocked by this measure are due to be directly allocated to the budget of the National Sports Agency. In addition, revenues from other taxes have also been earmarked for the sports budget, such as the "Buffet tax" on television broadcasting rights for sporting events.
Public broadcasters will receive €80 million less this year than they did in 2024, a sum which could even reach almost €150 million, given the €69 million that was promised, and then canceled, to finance transformations to the public audiovisual companies. France Télévisions, the broadcaster with the biggest budget, will therefore have to make the biggest sacrifice (€43 million), while Radio France will have to operate with €8 million in budget cuts. Both companies – as well as France Médias Monde (which operates France 24, RFI, MCD) – were already in the red at the end of 2024.
A measure to eliminate 4,000 jobs in the national education system, which had been proposed by the Barnier government in the fall, has not been included in the final version of the budget bill. Prime Minister François Bayrou dropped this measure, which would have represented a €50 million budget cut, at the request of the Socialists. On the other hand, the national education budget has still been cut by €50 million, with a reduction in funding for the "support for national education policy" program, which is notably aimed at supervising teachers.
The education budget (€88.6 billion) has been cut by €225 million compared to 2024.
The Interior Ministry, led by Bruno Retailleau, has secured a 2.7% funding increase for its "security" mission, which combines police, gendarmerie and civil security budgets, standing at a total of €26 billion.
The Justice Ministry was one of the few spared from budget cuts. Though it had previously been threatened with cuts, in the end, its budget is set to reach €10.5 billion (a €400 million increase), in line with commitments made in a 2023 justice programming law. This boost, which Justice Minister Gérald Darmanin has hailed, was intended to finance the recruitment of 1,600 additional civil servants in 2025.
Translation of an original article published in French on lemonde.fr; the publisher may only be liable for the French version.