FRANCE Trends and Developments Contributed by: Hugo Sanchez de la Espada, Robin Gaulier, Magalie Dansac Le Clerc and Aurore Cormary, Baker McKenzie Paris
Recent reforms have introduced several tax increases targeting both large companies and high-income indi - viduals. For companies, the Finance Acts for 2025 and 2026 introduced and extended a temporary additional contribution on the profits of large enterprises, which can bring the effective corporate tax rate up to 36% for the largest groups, while the planned phase-out of the local cotisation sur la valeur ajoutée des entre- prises (CVAE, a local value-added tax on businesses) has been postponed until 2030. For individuals, the Finance Act for 2025 introduced a comprehensive reform of management packages, under which capital gains realised on equity instru - ments by managers and employees are now in prin - ciple taxed as salaries, together with a Differential Contribution on High Incomes (CDHR) ensuring a minimum 20% effective tax rate on the highest earn - ers. The Finance Act for 2026 further introduced a new 20% annual tax on certain assets held by patrimonial holding companies, while the Social Security Financ - ing Act for 2026 raised the social security contribu - tions on capital income from 9.2% to 10.6%. Despite this tightening, France remains an attractive jurisdiction from a corporate tax standpoint for foreign corporate investors. The country benefits from one of the world’s most extensive networks of double tax treaties, with approximately 120 bilateral conventions in force, allowing investors to mitigate withholding tax leakage and secure the tax treatment of cross-border flows. The French tax framework also offers a number of tax incentives and a particularly competitive environment for innovation, supported by the Research Tax Credit ( Crédit d ’ impôt recherche ), the Innovation Tax Credit ( Crédit d ’ impôt innovation ), the Patent Box regime taxing qualifying IP income at 10% and the Young Innovative Company ( Jeune Entreprise Innovante ) regime, which together position France as one of the most attractive European jurisdictions for R&D and innovation activities. Intellectual Property and Data Protection France offers a robust and modern legal framework that effectively protects innovation and intangible assets, fully harmonised with EU standards. The
National Institute of Industrial Property (INPI) plays a central role, with fully dematerialised filing procedures and updated guidelines for the filing of registered rights. In addition to registered rights, the French land - scape covers the full spectrum of intellectual property rights including copyright, trade secrets and know- how, and is supported by specialised IP chambers within French courts as well as efficient interim relief mechanisms. French companies and IP practitioners also benefit from the Unified Patent Court, which has rapidly built up its case law since 2023 and is now firmly established as a key forum for European patent litigation. Data protection is equally well established in France, with the GDPR fully embedded in business practices and the Commission Nationale de l ’ Informatique et des Libertés (CNIL) recognised as one of Europe’s most active and influential supervisory authorities. The framework provides legal certainty for businesses while ensuring a high level of protection for personal data, supporting France’s positioning as a trusted environment for data-driven innovation. Recent developments confirm the dynamism of this area. The most significant is the progressive applica - tion of the EU AI Act (Regulation 2024/1689), with key obligations for high-risk AI systems originally set to enter into force on 2 August 2026, but currently sub - ject to a proposed deferral to late 2027 under the EU’s Digital Omnibus simplification package. The CNIL has been designated as the French lead authority and has published a series of practical guidelines articulating the AI Act with the GDPR, providing welcome clar - ity for businesses developing AI solutions in France. In parallel, the EU Data Act (Regulation 2023/2854), applicable since 12 September 2025, introduced a new framework for access to and sharing of data generated by connected devices and cloud services. Together with the GDPR, these texts form a coherent European framework that strengthens legal certainty in the digital economy and reinforces France’s attrac - tiveness for data-driven and AI-related investment. Dispute Resolution France offers a structured and diversified dispute res - olution system built around commercial courts ( tribu- naux de commerce ), civil courts ( tribunaux judiciaires )
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