News / CMA CGM braces for an even greater financial hit from French windfall tax

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French MPs have amended a bill before parliament that would make a temporary windfall tax on the country’s ocean shipping operators permanent.

The tonnage tax regime has also been modified, making it potentially less advantageous, and leaves CMA CGM facing a far greater financial hit than was initially anticipated.

The government, which is well short of an overall majority in France’s lower house, had proposed that the exceptional levy be just that, and only applied in 2025 and 2026 as a fiscal measure aimed at reducing the state’s alarming budget deficit.

The windfall tax, levied on a percentage of operating income, would only apply to French shipping lines with an annual turnover in excess of €1bn – CMA CGM is the only operator in this category.

The group had been braced to pay around €800m over the next two years – €500m in 2025 and €300m in 2026 – CFO Ramon Fernandez warning of consequences for the Marseilles-based operator’s investments, notably on new LNG- or methanol-powered ships to decarbonise its fleet.

The windfall tax was “a form of competitive disadvantage”, compared with rivals who were taxed less, he said, and would have to be limited in time and in quantum “otherwise we won’t be able to make all our investments”.

More recently, last week in an interview with Le Figaro newspaper, CMA CGM chief Rodolphe Saadé said the group was prepared to do its bit “to restore the country’s public finances”, provided it was “limited and fair”. But he added he was “worried” about the “one-upmanship” of the parliament.

“It’s a race to see who can propose the most tax increases, with the main targets, as always in France, being big business and the rich.”

His comments were confirmed to The Loadstar by a CMA CGM spokesperson.

A second amendment to the finance bill concerns a modification to the tonnage tax regime which allows ocean shipping companies to pay a flat-rate tax calculated on the net tonnage of their fleets, instead of on their profits. And the amendment focuses on placing a cap on the scheme, which would make company profits of €500m and above subject to corporation tax.

The MP behind the amendment claimed that if this modification to the scheme had been in place since 2022, “it would have made it possible both to guarantee the global competitiveness of the French group and bring €9bn into the state’s coffers”.

However, budget minister Laurent Saint-Martin slammed the amendment, pointing out that ocean freight ws “a cyclical activity” and that it would be a mistake to introduce “a kind of permanent taxation in a sector where profitability can fluctuate significantly”.

Mr Saade has regularly highlighted the benefits of the tonnage tax regime, which in his view enables companies based in Europe to compete with their Asian counterparts that have a much more advantageous tax regime.

He told Le Figaro: “If it were suspended in France, it would pose a real problem for competitiveness. It would put us out of competition with our European and global rivals. This regime is adapted to maritime transport, which is a highly cyclical activity. The last three years have been exceptional. However, since its creation in 1978, CMA CGM has gone through several difficult periods. In particular, we came close to filing for bankruptcy in 2008-2009.”

The amendments by MPs to the government’s finance bill could be ‘corrected’ during the ‘shuttle’ procedure of the bill, between parliament and the senate, or if the budget is adopted via legislation which allows the government to force passage of a law without a vote. However, recourse to the latter would be extremely unpopular.