Assembly Rejects Cut to Pension Tax Allowance

Overview

• Lawmakers in the National Assembly voted to delete article 3 of the 2027 budget during debate, removing the proposed cap on the 10% pension tax allowance.
• The Assembly adopted identical amendments by 116 votes to 30, a result reported on Thursday that overrode the government's opposition to the change.
• Article 3 would have lowered the annual ceiling on the 10% deduction for pensions from roughly €4,400 to €3,000, a move estimated to yield about €1.4 billion for the state.
• The rejection means the planned revenue will not materialize for now and forces the executive to either find alternative savings or try to reintroduce a modified measure later in the budget process.
• The debate highlights political sensitivity around taxing retirees and shows a clear clash between deputies and the government over how to close France's 2027 budget gap.