An order has been published in the French National Gazette on 30 July, increasing the mandatory terrorism contribution (TERR) with effect from 1 January 2027.
The contribution will rise from EUR 6.50 to EUR 8.50 per insured contract per annum. This increase follows the Finance Budget Law 2026, which raised the statutory ceiling of this contribution from EUR 6.50 to EUR 15.00 with same effective date. This ceiling sets the framework for further incremental increases in future years, up to that maximum.
The revised rate of EUR 8.50 applies to all premiums or contributions falling due on or after 1 January 2027. As a reminder, since 1 January 2024, the tax point date of the TERR contribution follows that of French insurance premium tax (IPT). This is also reflected in the TERR charge settlement process, as TERR charge declaration was incorporated into the French IPT return from that date.
It is also worth noting in this context that, independently of this recent order, the Finance Budget Law 2026 has extended the scope of the TERR contribution with effect from the same date. The contribution currently applies to contracts falling within Business Classes of 3 to 9, covering Land Vehicles, Railway Rolling Stock, Aircraft, Ships, Goods in Transit, Fire and Natural Forces, and Other Damage to Property as defined under Article L422-1 of the French Insurance Code. From 1 January 2027, the scope is broadened to include Class 13 (General Liability), representing a material expansion of the charge that insurers should consider alongside the rate increase.
Insurers should review their portfolio to identify any policies that will fall within the expanded scope and the higher TERR charge rate.
