By Maximilien Dechamps, attorney at law

Nearly fifteen years ago, the 2012 Finance Act introduced an apparently temporary tax, the Exceptional Contribution on High Incomes (CEHR), conceived “in a context of reducing public deficits and restoring our public finances,” intended “to request an exceptional effort from the wealthiest taxpayers.”¹ At the time, the public deficit stood at 103 billion euros, or 5.3% of GDP, and was moreover decreasing compared to 2010.² Parliamentary records show that the originally proposed contribution was to apply only until 2013 income, thus justifying the use of the adjective “exceptional.”³ The Finance Committee of the time—despite being dominated by the right—removed this time limit on the ground that the “Government’s reluctance to tax the wealthiest” was “unacceptable,” without, however, changing the name of this new contribution.

In 2024, the public deficit reached 168.6 billion euros, or 5.8% of GDP—this time increasing compared to the previous year⁴—and not only has the “exceptional” contribution not disappeared, but the lawmakers, still eager to plug a stubbornly persistent deficit, have now given the CEHR a little sister: the “Differential Contribution on High Incomes,” further increasing the tax burden on individual taxpayers supposedly among “the wealthiest,” who have not yet crossed the border.

From this semantic mirage, two lessons may be drawn: first, in tax legislation, the “exceptional” can easily become “structural”; and second, lawmakers, and behind them the Tax Legislation Directorate, have at their disposal a vast lexical field from which to craft reassuring yet misleading names for their newly invented levies.

The terminological proximity of the recent “Exceptional Contribution on the Profits of Large Companies” to the aforementioned CEHR offers little hope as to its own “exceptional” nature. This new levy, which adds itself to the roughly four hundred and eighty taxes, duties, contributions, and social charges already existing in France,⁵ applies to the taxable profits of corporate income tax payers at a rate of 20.6% of CIT for taxpayers with turnover between one and three billion euros, and 41.2% for those whose turnover exceeds three billion euros.⁶ Thus, a company generating more than three billion euros in turnover will face an effective corporate tax rate unprecedented since the Mitterrand era.⁷

The semantic analogy extends as well to the explanatory memorandum, since the ambition is to “contribute to the restoration of our public accounts” by “targeting the largest companies.”⁸ Furthermore, parliamentary records reveal that the measure was indeed intended to be temporary.⁹

The ongoing drafting of the 2026 Finance Bill should naturally prompt the following question among the most attentive observers: will this Exceptional Contribution on the Profits of Large Companies be maintained? It should be noted that, unlike the CEHR—which was codified directly in the 2012 Finance Act—the new corporate profit contribution remains only in the 2025 Finance Act,¹⁰ meaning that absent renewed introduction in the 2026 Finance Act, it would disappear. Thanks for this absence of codification are owed to the Government¹¹—a circumstance that would be reassuring only if the Government still held a parliamentary majority.

As expected, the answer is unfortunately yes. On 14 October 2025, the National Assembly received a draft 2026 Finance Bill whose Article 4 renews the Exceptional Contribution on the Profits of Large Companies for one year.¹² The rates were initially to be halved—from 20.6% to 10.3% and from 41.2% to 20.6%—as had already been anticipated during the adoption of the 2025 Finance Act. But a government amendment passed on 27 October ultimately set the rates at 5% and 35.3%, concentrating the burden on companies with turnover exceeding three billion euros.

The explanatory memorandum to Article 4 states that this renewal applies for only one year. Apart from the limited trust one may place in such statements, we recall that an exceptional contribution on corporate profits had already been introduced for 2017 under similar conditions—albeit with lower rates.¹³ The temporary nature was respected, but the periodic adoption of a similar levy would necessarily render it less “exceptional,” especially since the context used to justify it—namely the public deficit—is itself structural.

The perpetuation or regular re-enactment of this exceptional contribution on the profits of large companies, much like that on high incomes, would be regrettable. Although the contribution is expected to affect fewer than five hundred French companies,¹⁴ and although many point to the fact that the implicit corporate tax rate is higher for SMEs than for large firms,¹⁵ we have recently learned that the 117 companies belonging to the French Association of Private Enterprises (AFEP)—nearly all of which generate turnover above one billion euros—already account for 19% of all taxes and contributions paid by companies in France, while representing only 13% of total value added.¹⁶ This represents a total of 85.1 billion euros; thus, given parliamentary projections that the exceptional contribution on profits will raise eight billion euros in 2025, one understands that this “exceptional contribution” is far from being a mere drop in the ocean of the fiscal burden already borne by large companies.

The explanation for this unfortunate divergence in perception, which encourages ever-increasing pressure on France’s largest companies, lies in the fact that public debate tends to focus on the much-publicized corporate income tax, whose salutary decline since 201817 is more than offset by the exceptional contribution for companies with turnover above three billion euros. This ignores, however, that the largest share of compulsory levies is made up of social contributions, which in 2024 represented a burden of 53.6 billion euros for the 117 AFEP companies—i.e., 62% of their total tax charges.

Beyond this cognitive bias, the overlap of media and political timelines makes it easy to imagine a causal link between the exceptional contribution on large companies’ profits and the controversy surrounding the so-called “superprofits” of Total in 2023, heavily discussed in early 2024. The journalistic and public indignation at the fact that a French company was performing well likely provided all the encouragement needed—if any were needed—to propose a new levy on large corporate profits. Less has been said about the impact of this public pillorying—combined with environmentalist pressure—on the company’s subsequent “sidestep” towards the United States, with the opening of a secondary listing in New York by our national oil major.

Far from enabling any hope of long-term balancing of public accounts, the accumulation of taxes, surtaxes, and exceptional contributions in fact produces destructive indirect effects, as it undermines business investment. In this regard, while French companies have indeed benefited over the past decade from significant incentives—particularly the Research Tax Credit and the now-defunct Competitiveness and Employment Tax Credit—France nevertheless has one of the highest average effective corporate tax rates in the OECD, and indeed the third highest in the European Union,¹⁸ to which, once again, must be added social contributions. More generally, it is always worth recalling that France is the OECD country where tax revenue as a share of GDP is highest (43.8% in 2023),¹⁹ all taxes and contributions combined.

Unfortunately, just as Court of Auditors reports are never read, it seems likely that the relentless accumulation of these publicly available data will not enter into lawmakers’ considerations. Whether or not the exceptional contribution on the profits of large companies is maintained, the trend toward ever-increasing tax pressure will likely continue its course, heading toward the far reaches of a Laffer curve that, in the case of France, has long merged with the axis of ordinates.

But after four hundred and eighty different levies, what new names can be found for future necessary fiscal inventions? After such lexical exertion, where can inspiration be drawn? This is a formidable semantic challenge for the Tax Legislation Directorate; nevertheless, since winning strategies are rarely changed, we need only await—within fifteen years, but certainly sooner—the appearance of the Differential Contribution on the Profits of Large Companies.

¹ French National Assembly, Explanatory Memorandum to the Draft Finance Bill for 2012, 28 Sept. 2011

² INSEE, Public Administration Accounts for 2011, May 2012

³ Finance Committee Debate on the Draft Finance Bill for 2012

⁴ INSEE, Public Administration Accounts for 2024, May 2025

⁵ According to a count by the Foundation for Research on Administrations and Public Policies, published in June 2021

⁶ Art. 48 of Finance Act No. 2025-127 of 14 February 2025

⁷ Until 1985, the corporate income tax rate was 50%; see Caubet-Hilloutou J.N., Girard P., Redondo P., “The reduction of the corporate income tax rate since 1986: an analysis based on individual company data,” Économie & Prévision, No. 98, February 1991

⁸ French National Assembly, Explanatory Memorandum to the Draft Finance Bill for 2012, 10 October 2024

⁹ Senate General Report on the Draft Finance Bill for 2025, Volume II, Part I, 21 November 2024

¹⁰ As well as Ordinance No. 2013-837 of 19 September 2013 adapting the Customs Code, the General Tax Code, the Tax Procedures Code, and other fiscal and customs legislation applicable to Mayotte

¹¹ Senate General Report on the Draft Finance Bill for 2025, Volume II, Part I, 21 November 2024

¹² Article 4 of Draft Finance Bill for 2026 No. 1906, submitted on 14 October 2025

¹³ Article 1 of Amending Finance Act No. 2017-1640 of 1 December 2017

¹⁴ Senate General Report on the Draft Finance Bill for 2025, Volume II, Part I, 21 November 2024

¹⁵ According to a September 2025 INSEE study entitled “Between 2016 and 2022, the implicit profit tax rate was higher for SMEs than for large firms”

¹⁶ AFEP, Tenth Edition of the Survey on the Economic and Fiscal Contributions of Member Companies, September 2025

¹⁷ Article 84 of Finance Act No. 2017-1837 of 30 December 2017

¹⁸ OECD Data

¹⁹ OECD Data