Oct
France abolishes simplified VAT regime from 1 January 2027
Who this will interest: Businesses registered for VAT in France under the simplified VAT regime.
Key point(s): The simplified VAT regime which allows annual VAT return filings will be abolished from 1 January 2027. Depending on their turnover, businesses will move to either quarterly or monthly VAT returns.
Action points: Businesses will be moved to the standard regime automatically, no filing or application is required. However, businesses should also prepare for the change in filing frequency.
In detail
Under the simplified VAT reporting regime, qualifying businesses only file an annual VAT return instead of monthly or quarterly periodic returns. To qualify for the regime their annual VAT payable must be lower than EUR 15,000.
From 1 January 2027, the simplified regime will cease and the standard regime will apply to businesses using it. Returns will be filed quarterly where turnover, including taxable acquisitions, does not exceed the following amounts:
- EUR 1,000,000 in the previous calendar year; or
- EUR 1,100,000 in the current year.
Businesses above these thresholds will file monthly VAT returns. Businesses that qualify for quarterly filing may choose monthly filing by sending a request to the tax authorities.
The simplified VAT regime for farmers will not be affected.
Impact on businesses
Businesses VAT registered in France and filing returns under the simplified regime will need to file quarterly or monthly returns from 2027. They should review their internal processes, accounting systems and resources to ensure the switch to the new filing frequency does not lead to any issues.