As Paris searches for savings to bring its public finances back under control, the anti-poverty organisation Oxfam France has put a long-standing inheritance tax relief under the spotlight. In a report published on 22 September, the NGO argues that the so-called Dutreil pact — a mechanism designed to smooth the transfer of family businesses — has become a shelter for the country's largest fortunes and could be reformed to raise billions.
The timing is pointed. Work on France's 2027 budget is getting under way against a backdrop of deteriorating fiscal indicators. The public deficit is projected to widen from 5.1% to 5.4% of GDP between 2025 and 2026, while public debt is expected to climb from 115.7% to 119.3% of GDP over the same period. The Directorate General of the Treasury has signalled that substantial fiscal effort will be needed in the years ahead, a message echoed in recent coverage of France's public debt trajectory.
What the Dutreil pact does
Introduced in 2003 and named after Renaud Dutreil, then minister for trade and crafts, the scheme grants a 75% exemption from gift and inheritance tax when a company is passed to the next generation. The rationale is straightforward: without it, heirs could be forced to sell the family firm simply to settle the tax bill. In exchange, beneficiaries must hold the shares for a minimum period and meet activity requirements. The 2026 finance law already tightened the rules, extending the holding period and excluding certain non-business assets.
According to Oxfam, citing Court of Audit figures, transfers made under the Dutreil pact have averaged almost €3 billion a year over the past four years, peaking at €5.5 billion in 2024. The organisation calculates that if the wealth of French billionaires aged over 70 were passed on under current rules, the public purse could forgo more than €111 billion over the next three decades. That figure is a projection rather than a sum the state would automatically recover, but Oxfam presents it as evidence of the scheme's budgetary significance.
A concentrated advantage
The NGO's central complaint is that the benefit is heavily skewed. It estimates that the 110 most advantaged beneficiaries — roughly 1% of the total — each saved an average of €30 million in tax in 2024. By contrast, half of the least advantaged saved less than €40,000 on average.
Oxfam uses the term "super-inheritances" for estates left to the top 0.1% of heirs. It puts the average value of these transfers at €13 million and their effective tax rate at around 10%, even though the theoretical marginal rate can reach 45% on the largest estates.
"This refusal to touch such an unfair tax loophole does not meet French people's wish to see the largest fortunes contribute more," said Layla Abdelke Yakoub, Oxfam France's advocacy manager for tax justice and inequality.
The organisation's headline proposal is to cap the Dutreil exemption at €1 million per beneficiary. On its calculations, that would leave 90% of current beneficiaries untouched while generating more than €3 billion a year for the state.
The political calculation
The debate is likely to surface in discussions over the 2027 draft finance bill. The difficult question is how far the relief can be trimmed without defeating its original purpose: enabling business succession and preventing families from having to sell their outil de travail to pay inheritance tax.
Oxfam acknowledges the political obstacles. According to Abdelke Yakoub, Prime Minister Sébastien Lecornu made a point of saying the government would not touch the Dutreil pact when he set out his first budgetary options. "Oxfam hopes the Prime Minister will have a change of heart; the ball is in his court," she said.
The standoff reflects a broader European argument over how to fund strained public services. Similar disputes are playing out at EU level, where Ireland's push for new EU taxes has become a flashpoint in long-term budget negotiations. In France, the immediate test will be whether a government facing a fragmented parliament and restive public opinion is willing to reopen a tax break that has quietly shaped the country's corporate landscape for two decades.
