Newsletter October 2026

Fuel allowance: up to €1,000 exempt in 2026

The tax-exempt limit applicable to the fuel allowance has been temporarily raised to €1,000 per year per employee for amounts paid through December 31, 2026. Employers who have already granted an allowance may therefore, if applicable, supplement their payment up to this new annual limit.

The fuel allowance, also known as a transportation allowance, allows employers to cover all or part of the expenses incurred by an employee for travel between their usual residence and their workplace. It remains optional: no employee may require their employer to pay it.

Up to €1,000, the allowance is exempt from social security contributions and income tax. The eligibility requirements have been temporarily relaxed: the availability of public transportation serving the employee’s home or workplace no longer precludes payment. For 2026, the program would be open to all employees who use their personal vehicles to commute between their usual residence and their workplace. The restrictions typically related to place of residence, public transportation availability, or work schedules would be temporarily suspended. The allowance could also be combined with coverage for a public transportation pass.

On an exceptional basis, the allowance may also be combined in 2026 with coverage for a public transportation pass. The amount and eligibility criteria must be established by a company-level or inter-company agreement, by an industry-wide agreement, or, failing that, by a unilateral decision of the employer after consulting the social and economic committee, where one exists.

Not all regulatory texts have been published yet. However, the Official Social Security Bulletin and Urssaf authorize employers to apply these new rules in advance in their 2026 filings.

Artificial intelligence: what resources are available to train teams and take action?

Implementing artificial intelligence tools does not necessarily require a significant IT investment. Several programs enable companies to train their employees, identify relevant applications, and prepare a structured project.

Employers can ask their skills development organization (OPCO) to fund AI training as part of the skills development plan. Funding depends on the industry sector, the company’s size, and the available budget. It is therefore best to contact the OPCO before signing a contract with a training provider. France Num and Bpifrance also offer free online training courses.

For more advanced projects, Bpifrance’s Diag Data IA is designed for SMEs and mid-sized companies with between 10 and 2,000 employees. An expert works with the company for eight days to identify use cases, assess their cost and return on investment, and develop an action plan. France 2030 covers 40% of the service cost, reducing the company’s out-of-pocket expense from €10,000 to €6,000 (excluding tax), provided the application meets eligibility requirements.

In Auvergne-Rhône-Alpes, industrial companies and firms providing services to the industrial sector can benefit from the “Région Industrie – Conseil Industrie du Futur” program. It funds up to 50% of consulting services, up to a limit of €16,000, particularly for projects involving smart systems, computer vision, predictive maintenance, or data analysis.

Finally, Bpifrance’s “Boost IA” loan can help finance software, consulting services, automation, and training. However, this is a loan that must be repaid, not a grant.

LMNP: depreciation cap proposed for 2027

The draft 2027 Finance Bill provides for a significant change to the non-professional furnished rental regime, or LMNP.

Currently, a landlord operating under the actual income method can deduct expenses incurred for the property as well as depreciation calculated on the building and furnishings. This mechanism often results in a significant reduction in the taxable income from rental activity.

The government proposes to cap the annual depreciation deduction, effective in 2027, at 2.5% of the depreciable value, up to a limit of €7,000 per year per tax household. The bill provides for an even lower cap for certain furnished vacation rentals.

This reform could increase the taxable income of property owners whose depreciation exceeds the new limits. Its impact will, however, depend on the property’s value, its financing, deductible expenses, the amount of rent, and the accumulated depreciation from previous years.

At this stage, this is merely a bill introduced in the National Assembly. The proposed rules may be amended or eliminated during the legislative process. It is therefore premature to adjust an investment strategy based solely on the initial text, but investors can already assess its potential impact.

Electronic invoicing: initial assessment and grace period through the end of 2026

As of September 1, 2026, all French companies subject to VAT must be able to receive electronic invoices through an approved platform. The requirement to issue electronic invoices already applies to large companies and mid-sized companies.

According to the reform’s first monitoring committee, 75% of VAT-registered businesses had designated their receiving platform as of October 4. More than 20 million electronic invoices, representing over 70 billion euros, had already been exchanged.

Several practical challenges remain: the clarity and cost of offers, software adaptation, platform changes, and incorrect transmission of processing statuses. An update to the getting-started guide should provide additional guidance to businesses.

The Minister of Public Action and Accounts announced that no penalties will be imposed before the end of 2026. However, this grace period does not postpone the obligations. SMEs and microenterprises will be required to issue electronic invoices starting September 1, 2027. They would therefore be wise to verify the compatibility of their software now, choose their platform, and ensure the accuracy of their customer files.

Construction: a subsidy of 20 centimes per liter of non-road diesel

Temporary assistance is being provided to small construction and public works companies that rely heavily on non-road diesel (GNR).

It takes the form of a subsidy equal to €0.20 per liter of GNR invoiced, up to a limit of €4,000 per company per month. It applies to construction and public works companies with no more than 50 employees that operate in one of the eligible subsectors, which include, in particular, earthwork, road and utility network construction, demolition, structural work, roofing, and framing.

For GNR invoiced in September 2026, the application must be submitted online no later than October 31. The application package must include, among other things, purchase invoices, a summary table, bank account information, and a declaration regarding any public aid already received.

The company must be current with its tax and social security obligations, must not be subject to insolvency proceedings, and must comply with the European de minimis aid ceiling.

A monitoring clause stipulates that, in certain situations, aid exceeding €600 must be repaid if the gross operating surplus for the fiscal year remains close to or exceeds that of the previous fiscal year. Supporting documents must therefore be retained for five years.