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France Starts 2026 Under 'Loi Spéciale' as Budget Talks Slip Past Deadline

The stopgap keeps current tax rules in place, leaving new spending and promised incentives on hold.

Overview

  • Existing tax and fiscal rules as of 31 December 2025 continue unchanged on 1 January, and measures from the 2026 budget do not take effect without a voted finance law.
  • New MaPrimeRénov’ applications are suspended, with validated but unpaid files to be paid, and the €130 million aid package for viticulturists is on hold along with 1,600 planned justice hires.
  • The non-indexation of income tax brackets could bring about 200,000 additional households into the income‑tax net in 2026.
  • A decree restricts state spending to prior‑year voted services and initially makes only 25% of ministerial credits available, with the prime minister urging strict austerity.
  • The government says it will defend priority measures for agriculture, overseas territories and certain tax reliefs for retroactive application once a budget passes, and it could resort to exceptional procedures if no compromise emerges in January.