This article was first published on Tax@Hand, and is reproduced on this blog with the authorization of its authors.
The text of France’s 2027 draft finance bill was presented to the Council of Ministers on 1 October 2026 and has now been published. Among the most significant proposed measures are two incentives schemes that may be of interest to companies in connection with their future productive investments. Note, however, that these two proposals will only enter into force if adopted by Parliament as part of the legislative process.
Proposed expansion of the scope of the Green Industry Investment Tax Credit (C3IV)
The C3IV was introduced in the 2024 Finance Act and extended through 2028 by the 2026 Finance Act to support investments in production capacity across four key sectors driving the environmental transition: batteries, wind turbines, solar panels, and heat pumps, while also strengthening France’s industrial sovereignty.
The scheme enables companies to benefit from a tax credit on expenditures incurred for the production or acquisition of tangible and intangible assets required to manufacture the equipment, essential components, and raw materials used in the eligible value chains.
The tax credit rate ranges from 15% for large enterprises to 35% for small enterprises, with a cap of EUR 150 million per project. Higher rates and ceilings may apply when the investment is carried out in a regional assisted area.
Article 9 of the 2027 draft finance bill proposes to strengthen the C3IV by expanding its scope to include additional sectors and activities considered strategic for France’s industrial and energy sovereignty. The proposed expansion would cover the production of products related to electricity grid technologies, solar thermal technologies, battery packs for electric vehicles, and permanent magnets used in electric propulsion technologies.
The list of eligible equipment, essential components, and raw materials whose production qualifies for the C3IV would be updated to include the new sectors and activities referred to above.
Proposal to introduce a new exceptional accelerated depreciation regime to support the modernization of the production assets of small and medium-sized enterprises (SMEs) and mid-sized companies (ETIs)
This new accelerated depreciation regime, set out in article 9 of the 2027 draft finance bill, is intended to support eligible companies in modernizing their industrial facilities and thereby enhancing their competitiveness.
Inspired by the former “robotics” accelerated depreciation scheme, which supported the modernization of SMEs’ production assets for equipment acquired or manufactured up to 31 December 2020, this new measure would also be available to ETIs and would specifically target investments in Industry 4.0 technologies such as robotics, 3D printing, digital twins, generative AI, advanced analytics, and related technologies. (SMEs are defined as companies with fewer than 250 employees, and either turnover no greater than EUR 50 million or a balance sheet no greater than EUR 43 million; ETIs are defined as companies with 250 to 4,999 employees, and either turnover no greater than EUR 1.5 billion or a balance sheet no greater than EUR 2 billion.)
Assets acquired new between 1 January 2027 and 31 December 2029 (or acquired new as from 1 January 2030, provided the order was placed during the aforementioned period) would be eligible for a superdeduction of 40% to 80% (and higher rates in the case of investments carried out in a regional assisted area). These assets must be capitalized on the balance sheet and used in an industrial activity falling within specific eligible categories, including robotics and collaborative robotics (cobotics), additive manufacturing, and digital or programmable production equipment, among others.
The additional depreciation deduction would be spread on a straight-line basis over the asset’s normal useful life.
Assets held under standard lease arrangements would not be eligible for the scheme. However, an exception is provided for lessees under finance lease agreements or lease-purchase arrangements, subject to certain conditions.