France: Recodification of VAT into the CIBS might be postponed.

Juli 21, 2026 EU-Umsatzsteuer-Update

Introduction

Historically, VAT rules in France were codified within the Code Général des Impôts (CGI), alongside with a wide range of other taxes.

The recodification of VAT within the code des impositions sur les biens et services (CIBS) was planned to take effect from 1st September 2026 but thus may be postponed to 1st January 2027. An order amending the CIBS is indeed expected before autumn 2026, to confirm the postponement of its entry into force until 1 January 2027.

In this article, we explore the objective, scope, and consequences of the transfer of VAT provisions from the CGI to the CIBS.

  1. Background: from the CGI to a new tax code.

The idea behind the CIBS was to regroup all taxes related to goods and services in a dedicated code. This new codification will now include VAT, excise duties and other indirect taxes linked to consumption.

  1. Objective of the VAT recodification

Improving legal clarity

One of the principal goals is to:

  • enhance the readability and accessibility of VAT law
  • harmonise the taxation of goods and services
  • clarify the legal concepts of VAT
  • bring French law in line with the European VAT Directive
  • enhance legal certainty by incorporating case law

Facilitating compliance and administration

By simplifying the structure of VAT rules:

  • Businesses should be able to easily identify their obligations
  • Tax advisors and lawyers can interpret the law more efficiently
  • Tax authorities can streamline enforcement and guidance

This aligns with broader efforts to modernise public administration and reduce compliance costs.

  1. Scope of the reform: what changed and what did not

Formal rather than substantive reform

A key characteristic of the recodification is that it is primarily formal:

  • The legal rules governing VAT (tax base, rates, exemptions, etc.) remain largely unchanged
  • The reform does not introduce new tax burdens or significantly alter existing ones but instead, it focuses on reorganising existing provisions into a clearer framework.

This recodification goes beyond a simple renumbering and restructuring of the VAT provisions. In particular, the tax authorities have codified a number of fundamental concepts arising from the jurisprudence of the Court of Justice of the European Union (CJEU), such as the notions of a direct and immediate link and a fixed establishment, together with principles governing the VAT treatment of leasing activities and transactions subject to the travel agents’ margin scheme.

  1. Alignment with European Union law

As VAT is a harmonised tax within the European Union, governed largely by the EU VAT Directive (Directive 2006/112/EC). The recodification into the CIBS also reflects an effort to:

  • Align French legal drafting more closely with EU terminology
  • Facilitate interpretation in conformity with EU law
  • Improve legal certainty in cross-border transactions

By reorganising VAT provisions in line with the directive’s structure, the reform enhances France’s integration within the European VAT system. The tax authorities have also taken this opportunity to transpose, in whole or in part, certain directives (Directive VIDA (EU) 2025/216 of 11 March 2025 regarding reporting obligations; E-commerce Directive (EU) 2025/1539 of 18 July 2025 concerning the obligations of platforms facilitating the distance sale of imported goods).

  1. Practical Implications

For businesses

Businesses should benefit from:

  • Easier access to VAT rules
  • Reduced time spent on legal interpretation
  • Improved ability to ensure compliance

However, during the transition period, companies need to adapt to:

  • New article numbering
  • Updated references in contracts, invoices and documentation
  • Adjust ERP system

For the Tax Administration

The administration benefits from:

  • A clearer legal base for guidance and audits
  • Improved communication with tax payers
  • Enhanced efficiency in managing VAT-related procedures

However, despite its advantages, the recodification has certain limitations as VAT remains technically complex due to its intrinsic nature and EU constraints.

Schlussfolgerung

The recodification of VAT into the CIBS represents a significant modernisation of French tax law. While it does not fundamentally alter the substance of VAT, it transforms its presentation and accessibility. However, the change in approach, the breaking down of the old articles and the adoption of updated terminology have altered the way texts are handled.

As tax systems continue to evolve, particularly under the influence of EU law and digitalization, the CIBS provides a more flexible and structured foundation for future developments in indirect taxation.

Businesses should take appropriate steps to update:

  • legal references
  • contract and invoices
  • ERP’ set up

If you have any questions please feel free to contact us.

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