At a time when every euro spent and every saving is being scrutinised in the search for ways to reduce France’s deficit, the NGO Oxfam is pointing to another potential source of revenue: very large inheritances.
In a report published on Tuesday 22 September (source in French), the organisation is taking aim at the Dutreil pact, a tax scheme that allows a substantial reduction in inheritance tax when a company is transferred.
The report comes out just as work begins on the preparation of the 2027 budget, against a backdrop of particularly deteriorated public finances.
As the French public deficit and public debt worsen between 2025 and 2026 (rising from 5.1% to 5.4% for the former and from 115.7% to 119.3% of GDP for the latter), the Directorate General of the Treasury believes that major fiscal efforts will be required in the coming years. In this context, Oxfam argues that the budgetary effort could also involve a thorough review of certain tax breaks.
What is the Dutreil pact?
Introduced in 2003 and named after the then Minister for Trade and Crafts, Renaud Dutreil, the Dutreil pact makes it easier to pass on businesses by granting a 75% exemption on gift and inheritance tax. It thus prevents heirs from having to sell the family business in order to pay these taxes.
In return, beneficiaries undertake to keep the shares for a minimum period and to meet activity requirements. The 2026 finance law has already tightened the scheme, notably by extending the holding period and excluding certain non-business assets.
According to Oxfam, transfers carried out under the Dutreil pact have accounted for almost 3 billion euros a year on average over the past four years, with a peak of 5.5 billion euros in 2024, according to the Court of Audit.
And Oxfam believes that maintaining the current rules could mean an even bigger shortfall in future. According to its calculations, passing on the wealth of French billionaires over the age of 70 via the Dutreil pact could deprive the public finances of more than 111 billion euros over the next thirty years.
This figure is a projection rather than an amount that the state would automatically recover if the scheme were scrapped. But for Oxfam, it illustrates the budgetary potential of a reform in this area.
Oxfam targets France’s largest fortunes
For the organisation, the main problem is the concentration of this tax advantage. Oxfam considers that the wealthiest beneficiaries gain far more from the scheme than others.
According to its calculations, the 110 most advantaged beneficiaries, or around 1% of the total, each saved an average of 30 million euros in tax in 2024. By contrast, half of the least advantaged beneficiaries saved less than 40,000 euros on average.
Oxfam uses the term “super-inheritances” to refer to the estates left to the top 0.1% of heirs. The organisation estimates that these inheritances average 13 million euros and that their effective tax rate is around 10%, even though the theoretical marginal rate can reach 45% for the largest transfers.
Oxfam therefore proposes mainly to cap at 1 million euros per beneficiary the exemption granted under the Dutreil pact. It estimates that this reform would leave 90% of current beneficiaries outside the cap, while allowing the state to recover more than 3 billion euros a year.
The debate on the Dutreil pact could therefore find its place in discussions on the draft finance bill for 2027. The key question will be how far this tax advantage can be curtailed without undermining its original aim: to make it easier to pass on businesses and avoid families being forced to sell their tool of trade to pay inheritance tax.
But according to Layla Abdelke Yakoub, Advocacy Manager for Tax Justice and Inequality at Oxfam France, “In setting out the first budgetary options, Prime Minister Sébastien Lecornu was keen to stress that the government would not touch the Dutreil Pact.” Yet, she argues, “this refusal to touch such an unfair tax loophole does not meet French people’s wish to see the largest fortunes contribute more. Oxfam hopes the Prime Minister will have a change of heart; the ball is in his court”,” she explains in the NGO’s press release. (source in French)
Behind the technical debate over the Dutreil pact lies a much more political question: in a France desperately searching for billions to get its public finances back on track, how much of the effort should be borne by the very largest fortunes and the biggest inheritances?