Tax incentives: After Amélie de Montchalin's announcements, Matignon slows down the implementation process

Tax Credit for Personal Services: Amélie de Montchalin's Perspective

In the whirlwind of tax discussions, Minister Amélie de Montchalin has sparked debate with her mention of a possible adjustment to the tax credit for hiring a domestic employee. This credit benefits approximately 4.4 million French households, yet the Prime Minister's office is urging patience before any decisions are made.

"Bercy might have jumped the gun and suggested paths that shouldn't have been," a close source to the Prime Minister told BFMTV on June 12. Matignon insists on patience. This discussion touches on sensitive topics such as personal services, childhood, and elderly care. Amélie de Montchalin's team plans to examine the side effects of eliminating tax loopholes.

Tax Loopholes: The Big Budget Debate

With a mission to find 40 billion euros in savings for the 2026 budget, tax loopholes are prominent on Bercy's radar. The tax credit for hiring a domestic employee currently allows individuals to benefit from a fiscal advantage equivalent to 50% of the expenses incurred, up to 12,000 euros per year, covering 26 personal services.

In the past, Amélie de Montchalin has announced intentions to eliminate 5 to 10% of the 467 existing tax loopholes, which together cost around 85 billion euros annually. However, personal services had not been discussed. The Court of Auditors, in a 2024 report, proposed reducing the rate of this tax credit for "activities of daily life" and lowering the ceiling to 3,000 euros, generating approximately 1 billion euros in savings.

Tuesday, May 10th, on RTL, Amélie de Montchalin already ruled out two personal care services from any potential budget cuts: "childcare" and "accompanying the elderly". "I solemnly state: these two areas are useful, they are effective (...) there will be no change," she assured. The 26 personal care professions are currently under review by the Court of Auditors to answer questions listed by the minister, including the perimeter, reimbursement rate, encouragement of undeclared work, and proper use of public money.

Sector Response to Potential Changes

Wecasa, a home cleaning service platform, has raised an alarm about the implications of weakening the tax credit for personal services. The organization claims that 72% of its users declare that the immediate credit of the tax credit allowed them to access home cleaning, making it a genuine factor of accessibility. The French Federation of Personal Services and Proximity reports that the personal care sector generates more than it costs, warning against potential job losses and increases in hidden work if tax credits were reduced.

Tax Cuts and Revenue-raising Measures

The primary focus of tax changes for 2026 is not on personal services tax credits, as the context leans toward income tax bracket cuts, standard deductions, and revenue-raisers like increasing tariffs and repealing certain clean energy incentives.[1][5][3] There are currently no publicized plans to reduce the tax credit specifically for personal services as part of budget negotiations or major tax reform proposals for 2026. [1][5][3]

"The ongoing discussions on tax policies involve the potential reconsideration of the tax credit for personal services, with Amélie de Montchalin revealing plans to review 26 personal care professions," the recent report by RTL revealed on May 10th. Concerns have been raised in the general news about the potential impact on sectors such as home cleaning services, with organizations like Wecasa warning that weakening the tax credit could lead to an increase in hidden work and job losses.

Tax incentives: After Amélie de Montchalin's announcements, Matignon slows down the implementation process