France Warns Against Wealth Tax Exodus

Paris Urges EU Coordination on Taxing Ultra-Rich

France must coordinate any reforms targeting ultra-wealthy individuals at the European level to avoid triggering a mass departure of millionaires similar to that reported in the United Kingdom, French Economy Minister Roland Lescure said in Paris on February 10, 2026.

While acknowledging that taxation of ultra-rich individuals may require adjustments, Lescure stressed that France cannot act alone. Without coordination, European countries risk entering a “race to the bottom,” competing over tax regimes in ways that could undermine fiscal stability.

Budget Talks Drop Billionaire Tax Proposal

The remarks followed the adoption of France’s 2026 budget after months of tense parliamentary negotiations. A proposal to impose a minimum annual 2% tax on individuals with net worth exceeding €1 billion was ultimately dropped. Plans to toughen France’s exit tax, which had been eased shortly after President Emmanuel Macron took office in 2018, were also shelved.

France faces the challenge of reducing a widening budget deficit while maintaining its reputation as an attractive destination for global investors. The budget process was marked by political fragmentation and repeated no-confidence motions.

UK Reforms Seen as Cautionary Example

Senior French officials appear to view recent UK tax reforms as a warning. The abolition of the long-standing non-domiciled tax regime, which allowed certain residents to avoid UK tax on foreign income, has reportedly led to the departure of several high-profile wealthy individuals and business leaders.

Lescure noted that when policies target a small, highly mobile group of individuals, relocation decisions can be made rapidly. In his view, unilateral action could prompt similar behavior in France.

However, available data suggests that large-scale emigration of France’s wealthiest residents remains limited. A December study by the Council of Economic Analysis found that only 0.2% of the top 1% of French earners emigrate annually, compared with 0.38% of the overall population.

Investment Strategy Focused on AI and Energy

Beyond fiscal debates, France is seeking to strengthen its economic positioning in technology and energy. Lescure highlighted France’s ambition to double electricity-driven energy consumption to 60% by 2030, as part of a broader electrification strategy.

France derives roughly 70% of its electricity from nuclear power, providing relatively low-carbon and competitively priced energy. This has helped attract foreign investment in artificial intelligence and data centres, including projects supported by international partners.

As reported by experts at International Investment, France’s cautious approach to wealth taxation reflects a broader strategy of balancing fiscal consolidation with competitiveness. In an era of mobile capital and global tax competition, coordinated European action is likely to be decisive in shaping investor confidence and long-term capital flows.