France’s National Assembly Blocks Pension Tax Reform
Parliamentarians voted 213-17 to eliminate Article 6 from the draft finance legislation, which aimed to replace the existing 10% deduction retirees claim on their declared income with a fixed €2,000 allowance per household, according to a broadcaster.
The proposal faced resistance from left-wing factions, the National Rally-Ciotti coalition, and Republicans, who had already removed the clause from the bill during committee debates.
The reform, originally suggested by former Prime Minister Francois Bayrou and later adopted by the Lecornu administration, contended that the 10% deduction is no longer warranted for retirees, as it was initially intended to cover professional expenses.
Currently, retirees can subtract 10% of their pension income, capped at €4,399 annually, similar to the deduction available to working taxpayers.
The Court of Auditors estimated that this tax relief cost €4.5 billion in 2023.
Although the fixed €2,000 allowance would have aided lower-income retirees—such as a couple receiving €5,000 in annual pensions each, whose deduction would rise from €1,000 to €4,000—lawmakers argued that pensioners earning over €20,000 annually would be disadvantaged.
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