France to Abolish Simplified VAT Regime from January 2027

Starting from 1st January 2027, France will abolish the Simplified VAT Taxation Regime (Régime Réel Simplifié de TVA), marking a significant shift in its fiscal landscape. This reform, introduced under the 2025 Finance Law, aims to modernize tax collection and tighten oversight as part of a broader push toward digitalization.

Key Changes to the VAT Framework
The current simplified regime allows businesses below specific turnover thresholds to file a single annual VAT return and pay via two semi-annual installments. From 2027, this option will disappear in favor of more frequent reporting:

Quarterly Filing Requirement:
Annual filing will be replaced by mandatory quarterly returns for eligible taxpayers.

Uniform Thresholds:
The reform introduces a new turnover threshold of €1 million (potentially €1.1 million for the current year).

Abolition of Installments:
The system of semi-annual installments will be removed, requiring businesses to calculate and pay VAT on a quarterly basis.

This abolition is part of a broader fiscal modernisation movement in particular:

Regime 42 (2026):
Effective January 1, 2026, France is also ending the “Regime 42” simplification for non-EU importers, forcing them to register for French VAT directly.

E-Invoicing Mandate (2026):
A massive transition to mandatory e-invoicing and e-reporting begins in September 2026, which will eventually integrate with these new reporting frequencies.

New Tax Code:
A consolidated tax code (Code de l’imposition des biens et services) will take full effect by September 2026, reorganizing existing regulations for better clarity.

Impact on Businesses
Small and medium-sized enterprises (SMEs) previously benefiting from the simplified regime will face higher administrative requirements. Firms must transition from yearly to quarterly accounting cycles, which may require upgrades to their accounting software and closer monitoring of cash flows.