France's 2% Tax on Family Holding Companies: Adopted in Committee, Undone the Next Day

A French parliamentary committee voted on 8 October 2026 to tax family holding companies 2% a year on the investment securities sitting inside them. On 9 October, the same committee voted down the entire revenue section of the 2027 budget that the new tax belonged to. Under Article 42 of the French Constitution, a finance bill's floor debate proceeds on the government's own original text, not the committee's amended one, so that second vote erased the first: the amendment would have to be refiled and adopted again on the floor to survive.

For anyone watching how European governments treat money sitting passively inside a corporate wrapper, the single amendment matters less than the pattern around it. This is the third attempt at taxing the same category of asset inside nine months, and the second one to actually become law.

What amendment I-CF1706 would have done

Charles de Courson, a deputy from the centrist LIOT group, filed amendment I-CF1706 on 4 October 2026 with two co-signatories. It would create a new article, 235 ter ZD bis A, in the General Tax Code: an annual 2% tax on the net value of "titres de placement", investment securities held for yield or capital appreciation rather than control or strategic participation, recorded in a holding company's assets at financial year end. The amendment defines a "family holding" broadly: a single family, including a natural person, their spouse or civil partner, and their ancestors, descendants and siblings, holding 33.33% or more of the company's financial or voting rights, directly or indirectly. The finance committee adopted it on the evening of 8 October 2026.

Why the committee undid its own work the next day

The 9 October vote was not about the holding-company tax specifically. It was a vote on whether the revenue section of the budget, as amended by everything the committee had adopted that week, around 200 amendments out of roughly 1,800 filed, should proceed to the floor at all. It failed 31 votes against, 3 in favour, 2 abstentions. Only Ensemble pour la République, the governing coalition's own party, voted to keep the committee's amended text. The rapporteur general, Philippe Juvin of Droite Républicaine, gave a reason that was arithmetical rather than ideological: his provisional estimate put the combined revenue effect of the adopted amendments at a loss of about €9.6bn, enough to push the 2027 deficit to 5.35-5.4% of GDP against the government's 5% target.

Because a finance bill's floor reading works from the government's initial text under Article 42, that rejection does not simply delete one line. It resets the whole revenue section to the version the government tabled on 1 October, before any committee amendment, including the ones removing other measures the government wanted to keep. The National Assembly opened floor debate on that original text on 13 October 2026, with a solemn vote on Part 1 scheduled for 20 October.

Not the first attempt, and not the only one that stuck

The 2% holding-securities tax has a short history of failing and a longer history of mutating. An almost identical amendment, CF390, was filed on 5 January 2026 and examined and rejected by the same finance committee on 8 January 2026, during debate on the 2026 budget. Nine months and one failed attempt later, de Courson's October version used a different legal vehicle, a new article number, a defined 33.33% family-control threshold, and the narrower term "titres de placement", but the underlying idea, an annual percentage tax on the securities a family holding company holds for return rather than control, is the same one.

A related measure aimed at a different, larger slice of the same category did become law earlier in 2026. Article 7 of the 2026 Finance Act, Law No. 2026-103 of 19 February 2026, created article 235 ter C of the tax code: a 20% annual tax on the market value of non-operational assets, the law's own examples lean toward luxury and passive holdings, inside a holding company when three conditions are all met: total assets of €5m or more, one natural person holding 50% or more of the voting or financial rights, and passive income exceeding half of total operating and financial income. It first applies to financial years ending on or after 31 December 2026 and was enacted as part of a budget that passed without a parliamentary vote, under Article 49.3 of the Constitution. That tax is current law. The October amendment would have added a second, lower-rate, broader-threshold tax on top of it, aimed at a wider pool of family holdings than the 20% measure reaches.

Who voted against the amended text, and why that complicates a simple reading

The 31 votes against the committee's amended revenue section came from the four left-wing groups, the Rassemblement National, Horizons and Droite Républicaine, a coalition that spans most of the ideological range of the Assembly. Only the government's own EPR group voted to keep the committee's text, and Les Démocrates abstained. The rapporteur's stated reason was the revenue and deficit numbers for the section as a whole, not an objection to the holding-company tax by name, and no public breakdown is available yet of which groups opposed which specific measures inside that rejected text. A bloc built from parties that normally disagree about taxing capital voting the same way, for reasons that were given collectively rather than itemised, is the part of this episode that resists a tidy story in either direction.

Whether Charles de Courson refiles I-CF1706, or a version of it, before the floor vote on Part 1 scheduled for 20 October 2026 has not been reported as of this writing.

Take the bear case first: on its own, this amendment is close to nothing. It was adopted by a committee that had its entire output on the revenue side thrown out the following day, under a constitutional rule written for exactly this situation, and the floor now starts from a text that does not contain it. Writing this up as "France is coming for holding companies" overstates a vote that, as of this piece, has already been erased once.

Our reading is narrower and, we think, better supported. Look at the sequence rather than the single vote: an amendment taxing securities inside family holdings was filed and rejected in January 2026, a related measure taxing passive and luxury assets inside larger holdings was enacted two months later through the government's own constitutional tool, and a close cousin of the January amendment came back in October and cleared committee before the whole section collapsed. Three attempts, one success, inside nine months, is not noise. It is a government under deficit pressure returning repeatedly to the same category of asset, structurally passive wealth sitting inside a corporate wrapper, using whatever procedural door happens to be open that month.

The part of this story that cuts against a clean "rising tax risk" narrative is the 9 October vote itself. The bloc that killed the amended budget text included both the parties that would be expected to oppose a new tax on capital and the parties that would be expected to want more of one; the committee's rapporteur cited the revenue and deficit numbers, not the holding-company tax specifically, as the reason to reject the section as a whole. We have not seen a public breakdown of which groups objected to which individual measures inside that rejected text, and we are not assuming one.

What we are watching

- **20 October 2026**: solemn floor vote on Part 1 of the PLF 2027. Whether amendment I-CF1706 or something like it is refiled and adopted on the floor is the thing to check first. - **Around 10 December 2026**: the Article 47 constitutional deadline. A government that reaches this date without a passed budget can legislate the 2027 finances by ordonnance, which would settle the question a different way. - **Financial years ending 31 December 2026 onward**: the first returns affected by the already-enacted Article 235 ter C 20% tax on passive and luxury holding-company assets, independent of whatever happens to the 2% amendment.

Did France pass a 2% tax on holding companies?

Not yet. The National Assembly's finance committee adopted amendment I-CF1706 on 8 October 2026, which would levy a 2% annual tax on investment securities inside family-controlled holding companies. The next day, 9 October, the same committee rejected the entire revenue section of the 2027 budget, and French procedure sends floor debate back to the government's unamended text. The tax would have to be refiled and adopted again on the floor to take effect.

Is this the same as France's wealth tax or exit tax?

No. France abolished its general wealth tax (ISF) in 2018 and replaced it with a property-only version (IFI). The exit tax (article 167 bis of the tax code) is a separate, existing mechanism that taxes unrealised capital gains above €800,000 for residents who have lived in France at least six of the last ten years and then move their tax residence abroad. The 2% amendment discussed here targets a third thing: cash-like investment securities sitting inside a family holding company, regardless of whether anyone relocates.

Why did the same committee pass a tax on 8 October and reject the whole bill on 9 October?

The two votes answered different questions. The 8 October vote was on one amendment among roughly 1,800 filed. The 9 October vote was on whether the revenue section, as amended by all roughly 200 adopted amendments together, should go forward at all. The committee's rapporteur general estimated the combined amendments would cut revenue by about €9.6bn and raise the deficit to 5.35-5.4% of GDP against the government's 5% target, and cited that gap as the reason to reject the section.

Has France already taxed holding companies before this amendment?

Yes, separately. Article 235 ter C of the tax code, created by the 2026 Finance Act (Law No. 2026-103 of 19 February 2026), imposes a 20% annual tax on the market value of non-operational assets inside a holding company when assets total €5m or more, one natural person holds 50% or more of the rights, and passive income exceeds half of total income. It applies from financial years ending on or after 31 December 2026 and is current law, independent of the amendment discussed here.

What happens next, and when does France have to pass a budget?

The National Assembly began floor debate on the government's original 2027 budget text on 13 October 2026, with a solemn vote on Part 1 scheduled for 20 October. Article 47 of the Constitution gives Parliament 70 days from a finance bill's deposit to pass it; the bill was registered on 1 October 2026, putting that deadline around 10 December 2026. If Parliament has not acted by then, the government can put the budget into force by ordonnance.

Does this affect non-French holding structures?

The amendments discussed here apply to companies within French tax jurisdiction, generally those with a French registered office or whose controlling individuals are French tax residents. Nothing in this episode changes the treatment of a holding company structured and resident outside France.