Among the many tax changes introduced by the 2026 Finance Act, the issue of taxing holding companies is attracting particular attention from business leaders. Against a backdrop of seeking new sources of revenue and strengthening anti-tax avoidance measures, the legislator has sought to impose stricter controls on certain wealth structures deemed ‘unproductive’.

Holding companies

Whilst holding companies play a central role in the organisation of business assets and overall structuring, wealth management strategies must now adapt to these new tax guidelines. Whether for cash management, dividend payments or investment strategies for the companies concerned, every objective must be analysed and addressed in the light of our legal and tax environment. Both active holding companies and so-called ‘passive’ holding companies will therefore need to pay particular attention to their organisation and operations.

The conditions for applying this 20% tax

Discussions regarding the taxation of holding companies have mainly focused on certain companies whose activities are considered to be primarily asset-based or financial. The stated aim of the legislator is to limit certain tax optimisation effects linked to the hoarding of undistributed income. The tax will apply to companies meeting all of the following conditions:

• Being more than 50% owned (directly or indirectly) by at least one natural person,

• Having assets with a market value exceeding €5 million,

• Deriving the majority of their income from passive sources (dividends, coupons, royalties, rent, etc.).

This 20% tax is therefore levied on the total market value of the following so-called ‘luxury’ assets:

• Assets used for hunting or fishing,

• Vehicles not used for professional purposes (passenger cars, yachts, pleasure boats, aircraft),

• Jewellery and precious metals (with certain exceptions),

• Racehorses,

• Wines and spirits,

• Residential properties occupied free of charge, or for an insufficient rent, by the individual partner.

Pursuant to Article 235 ter C of the CGI (General Tax Code), these provisions will apply to financial years ending on or after 31 December 2026.

In light of these changes, forward planning – which is essential in implementing any wealth management strategy – becomes all the more important for business leaders building their wealth or preparing to pass on their business. Holding companies remain useful tools for organising business assets, managing investments and preparing for business succession.

Finankap’s wealth management advisers will support you in analysing your financial, tax, professional, social and legal situation in order to put in place a coherent and sustainable overall strategy, tailored to your needs, objectives and constraints. Contact us!

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