#2026-363State Grants and Fiscal Equalization Rules for Local Authorities
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This decree updates how France calculates and distributes several state grants and equalization payments for local authorities. It mainly affects municipalities, departments, regions, intermunicipal bodies, and overseas territories, including French Polynesia, Wallis and Futuna, New Caledonia, Saint-Martin, Saint-Pierre-et-Miquelon, and Saint-Barthélemy. The changes adjust data sources, timing rules, road-length calculations, VAT compensation payments, disaster-related equipment aid, and procedures for disputes over fiscal revenue deductions. Local finance teams will need to check the updated formulas and reference years used for grant calculations.
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Key Changes
- Extends and adapts disaster-related equipment support and grant rules to several overseas territories, including New Caledonia, French Polynesia, and Wallis and Futuna.
- Updates reference data and timing rules used to calculate local government grants, including housing data, taxable income references, road length data, and VAT compensation payments.
- Clarifies procedures for fiscal revenue deductions and related administrative court disputes involving local authorities.
Obligations
What this law requires
Beneficiaries of the VAT compensation fund must receive annual payments based on closed accounts; new municipalities must receive quarterly payments, with possible adjustment once final accounts are closed.
When several mayors have served in the same municipality during a calendar year, the statutory recognition payment must be divided between them in proportion to the part of the year each mayor held office.
For calculating relevant municipal housing ratios, authorities must use the number of dwellings recorded by INSEE and available on INSEE's website on 1 January of the distribution year.
For formulas referring to reference taxable income or reference fiscal income, authorities must use the reference fiscal income corresponding to income from the antepenultimate year, rather than the latest known income figure.
For the relevant departmental road-length grant calculations, authorities must use road lengths recorded by the National Institute of Geographic and Forest Information as of 1 January of the applicable distribution year or preceding distribution year, excluding routes categorized as ferry or maritime links and applying a 1.3 multiplier to mountain-zone roads where specified.