As France hunts for billions of euros to repair its public finances, Oxfam is calling for tighter limits on a tax break for inherited family businesses, saying reform could raise more than €3bn a year.
At a time when every euro spent and saved is being scrutinised in the search for ways to reduce France's deficit, Oxfam is targeting a tax break for inherited family businesses that it says disproportionately benefits the wealthiest heirs.
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In a report published on Tuesday, the NGO called for tighter limits on the Dutreil pact, which exempts 75% of a qualifying company’s value when gift or inheritance tax is calculated.
Oxfam estimates that reforming the scheme could raise more than €3bn a year, as France searches for savings and additional revenue ahead of its 2027 budget.
As the French public deficit and public debt worsen between 2025 and 2026 — with the deficit expected to rise from 5.1% to 5.4% of GDP and debt from 115.7% to 119.3% — the government says significant fiscal measures will be needed 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 is designed to make it easier to pass a family business from one generation to the next.
Under the scheme, only 25% of a qualifying company’s value is taken into account when gift or inheritance tax is calculated. The aim is to prevent heirs from having to sell the business to pay the tax.
In return, beneficiaries must keep the company shares for a set period and meet rules on how the business is run. France tightened the scheme in 2026 by extending the minimum holding period from four to six years and excluding assets not used for the business, such as homes, works of art and jewellery.
According to Oxfam, the Dutreil pact has cost the French state almost €3bn a year on average over the past four years, with a peak of more than €5.5bn in 2024, according to the French Court of Auditors.
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 €111bn over the next 30 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 reforming the scheme.
Oxfam targets France's largest fortunes
For the organisation, the main problem is the concentration of this tax advantage. Oxfam argues 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 in tax between 2023 and 2024. By contrast, the least advantaged half of beneficiaries each saved less than €40,000 on average.
Oxfam uses the term “super-inheritances” to refer to the estates received by the top 0.1% of heirs. The organisation estimates that these inheritances average €13m 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 capping the tax advantage available under the Dutreil pact at one million euros per beneficiary. It estimates that this reform would leave 90% of current beneficiaries unaffected by the cap, while allowing the state to recover more than €3bn a year.
The organisation also recommends reducing the exemption rate from 75% to 50%, restricting it more closely to strictly business-related assets and introducing a requirement to preserve jobs.
The debate on the Dutreil pact could therefore feature in discussions on France’s 2027 draft budget. 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 them to pay inheritance tax.
But according to Layla Abdelke Yakoub, advocacy manager for tax justice and inequality at Oxfam France, Prime Minister Sébastien Lecornu “was keen to stress that the government would not touch the Dutreil pact” when presenting his initial budget plans.
“This refusal to touch such an unfair tax loophole does not meet French people’s wish to see the largest fortunes contribute more,” she said. “Oxfam hopes the prime minister will have a change of heart; the ball is in his court.”
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?
