France will abolish its simplified VAT return regime on January 1, 2027, under Article 38 of the 2025 Finance Law. Businesses currently using the regime will be moved automatically to the standard VAT regime and will have to file regular VAT returns and make regular payments.
How the Two Regimes Compare
The simplified regime reduces VAT reporting obligations. Eligible businesses skip monthly or quarterly returns. Instead, they make two advance payments each year, followed by an annual adjustment return.
The regime applies to businesses with annual turnover, excluding VAT, between EUR 85,000 and EUR 840,000 for sales of goods, catering and accommodation, or between EUR 37,500 and EUR 254,000 for services. An additional condition is that the VAT payable for the previous financial year must not exceed EUR 15,000.
From January 1, 2027, the abolition of France's simplified VAT regime will fundamentally change how affected businesses report and pay VAT. The existing system of two advance payments in July and December, followed by an annual VAT return (CA12/CA12E), will be ended. Instead, businesses will use the standard VAT return, Form 3310-CA3, to report their VAT liabilities.
What Changes in 2027
Under the new rules, quarterly VAT filing will become the default for businesses whose turnover, including taxable acquisitions, does not exceed EUR 1 million in the previous calendar year or EUR 1.1 million in the current calendar year. These businesses can also opt for monthly VAT returns by submitting a request to their local tax office.
However, businesses exceeding either of these turnover thresholds will automatically move to monthly VAT reporting from the month in which the relevant threshold is exceeded. Conversely, businesses already submitting monthly VAT returns that meet the applicable turnover conditions on January 1, 2027, may request to switch to quarterly filing.
How the Transition Works
The Directorate General of Public Finances will automatically transfer businesses from the simplified VAT regime to the new standard VAT reporting system. Businesses will not need to submit a separate application or take any action to initiate the transition. The applicable filing frequency will be determined based on the turnover reported in the most recently submitted annual VAT return. Where no annual return is available, the business will automatically be assigned quarterly filing.
What to Do Next
Businesses in the simplified VAT regime should review turnover and filing frequency, update accounting and ERP systems, adjust cash flow management, and verify their tax authority classification. Notably, the reform does not affect the simplified agricultural VAT regime, which will continue to operate under its existing rules.
