The decision was unanimously backed by a unit charged with vetting the accounts of the different political groupings, a parliamentary source said.
The political group Europe of Nations and Freedom (ENF) to which Le Pen's party belongs, had claimed 477,780 euros in expenses in 2016 that the Parliament's Budgetary Control Committee deemed unjustified or non-compliant.
It also ruled that 66,427 euros worth of claims for the following year were unjustified.
The audit report for 2016 seen by AFP showed claims for about one hundred Christmas presents worth more than 100 euros each, 230 bottles of champagne, and a Christmas meal for 140 people with a tab of more than 13,500 euros.
A meal with some industrialists at the Parisian restaurant L'Ambroisie cost 449 euros per head.
Le Pen's National Rally party was known until a recent name change as the National Front.
This investigation follows last year's inquiry over the abuse of expenses by National Front parliamentary assistants.
The ENF group brings together 35 MEPs, of which almost half are from Le Pen's party. It also includes members of the Austrian FPO, the Italian League and the Dutch Party for Freedom.
Some of the group's 2018 funds had already been frozen by the parliament as a precaution to ensure it could pay back the money.