The draft Finance Bill for 2027 (Projet de loi de finances pour 2027), presented on 1 October 2026, proposes to increase the Insurance Premium Tax (IPT) applied to non compulsory motor insurance covering risks of all kinds relating to land motor vehicles. The headline rate for this class would rise from 18% to 18.9%. The measure is expected to generate approximately €200 million, earmarked to support investment by the departmental fire and rescue services (SDIS) and civil security capabilities through a new capacity pact, following the wildfires of summer 2026.
It is important to note that this remains a draft measure. The Finance Bill is at the start of its parliamentary examination and its provisions, including this rate, may be amended or withdrawn before any final adoption. Insurers should therefore treat the 18.9% rate as proposed rather than confirmed, and should not yet reconfigure tax determination or pricing on the basis of this figure. Comparable increases were put forward in the two previous budget cycles and did not take effect, with a rate of 19% proposed and ultimately abandoned in both the 2025 and 2026 Finance Bills.
Sovos will continue to monitor the parliamentary process and will issue a further update once the measure is confirmed, amended, or dropped.
