Commission votes to raise French income tax bands in boost for taxpayers

France’s parliamentary Finance Commission has voted to raise income tax bands in line with inflation as part of the late 2026 budget.

If approved, tax thresholds would rise by about 1.1%, matching 2025 inflation. This would prevent households paying more tax - or starting to pay tax - simply because wages have increased to keep up with rising prices.

Without the change, around 200,000 households are estimated to reach the first income tax threshold or to see more of their money move into higher tax brackets, leading to higher bills.

This was an initial concern when the budget failed to pass in December. 

The exact income limits will be confirmed if the measure is formally adopted. The current tax bands are here.

Tax bands in France are usually increased annually in line with inflation, but this increase is not automatic (unlike, for example, the January 1 minimum wage increase) and has to be included as a part of the country’s annual budget.

It follows a similar pattern to last year, when the 2025 budget also failed to pass and hundreds of thousands of households were at risk of higher tax bills. The indexing to inflation (then 2024s) was manually added to the late-passing 2025 budget. 

Measure still not guaranteed to be included

Despite the increase receiving support from the Finance Commission, there is no guarantee that the final budget will include the measure. 

The government’s initial draft 2026 budget included a freeze on income tax bands, which would generate extra tax revenue, as part of a bill aimed at cutting France’s spiralling debt.

However, the freeze was later voted out of the text by MPs before the bill ultimately failed in December.

A slimmed-down version of the budget (omitting many measures that were planned to come into force from January 1) must now be passed. As income tax bands are not relevant until spring income declarations, they can be included in the bill, but if they are not included they remain at current (2025) levels. 

However, an initial draft of the watered-down bill containing a partial freeze on the bands remained in place when debated in the right-wing dominated Senate. 

Some centrist MPs, including both those aligned to the government and part of independent groups, continue to oppose the measure, arguing there is no budgetary capacity. 

Opposition is not limited to the right and centre; Eric Coquerel, MP for the far-left La France Insoumise and head of the Finance Commission, abstained from the group’s vote on the measure. 

He argued for a reverse partial freeze, with the lower brackets rising with inflation but the higher brackets kept frozen at last year’s levels, with only higher-income households seeing tax increases.

The form of the future slimmed-down budget ultimately rests with a vote by MPs (or with the government if it attempts to bypass MPs through controversial article 49.3, although this is not expected to be used).

Voting patterns from MPs during the original debates point towards a complete indexing of bands.