As of January 1, 2027, French VAT reporting rules will change. The reform includes, in particular, the abolition of the simplified tax regime (*régime simplifié d’imposition* – RSI) and an adjustment to the criteria used to determine whether VAT returns must be filed on a monthly or quarterly basis.
For foreign companies registered for VAT in France, the abolition of the simplified tax regime will generally have a limited impact, as many of them already file CA3 returns under the standard VAT regime.
On the other hand, the new frequency for VAT filings warrants particular attention: some businesses may be able to switch from monthly to quarterly reporting, while others might, conversely, be required to file their returns on a monthly basis.
Abolition of the simplified VAT regime in 2027
Until December 31, 2026, the simplified tax regime allows eligible businesses to make two VAT installment payments during the year and to file an annual CA12 tax return.
As of January 1, 2027, this regime will be abolished. The affected businesses will transition to a system based on monthly or quarterly CA3 tax returns.
For the majority of non-established businesses supported by Eurotax, this development will not fundamentally alter their existing obligations. In fact, many are already subject to the standard VAT regime, particularly those whose activities involve imports.
The main issue at stake in the reform therefore concerns, more specifically, the frequency with which CA3 tax returns must be filed.
New criteria for quarterly declarations
Currently, a business subject to the standard actual tax regime (*régime réel normal*) may file its CA3 VAT returns on a quarterly basis when the amount of VAT due is less than €4,000 per year.
From 2027 onwards, this criterion will be replaced by one based on adjusted turnover.
Pour pouvoir bénéficier d’une périodicité trimestrielle, celui-ci devra respecter les seuils suivants :
- a maximum of 1 million euros for the preceding year (N-1);
- A maximum of 1.1 million euros for the current year (N).
Above these thresholds, VAT returns must be filed monthly.
This represents a significant change: the actual amount of VAT due will no longer be the deciding factor in determining whether a business is eligible to file its VAT returns on a quarterly basis.
What is adjusted revenue?
The calculation of the adjusted turnover represents one of the key areas requiring close attention under the reform.
It does not solely take into account the sales and services carried out by the company. Certain transactions for which the company itself is liable for VAT are also included.
This concerns, in particular, intra-Community acquisitions, certain purchases and imports subject to the reverse-charge mechanism, as well as certain removals from suspensive regimes.
This new calculation method may therefore have a particular impact on foreign companies that carry out significant volumes of transactions in France.
Regarding non-established businesses, the analysis presented in the documentation suggests focusing on transactions for which the place of taxation is in France, rather than on the business’s global turnover. However, specific administrative guidance on this reform is still awaited to confirm this point.
Monthly or quarterly: what changes for businesses?
The reform can lead to two situations.
A business that currently files its VAT returns on a monthly basis may potentially request to switch to a quarterly filing schedule, provided it meets the new thresholds. This would reduce the number of CA3 VAT returns filed from 12 to 4 per year.
Conversely, a business currently filing on a quarterly basis may be required to switch to a monthly filing schedule if its adjusted turnover exceeds the established thresholds. This may particularly apply to businesses that carry out significant volumes of intra-Community acquisitions or imports subject to the reverse-charge mechanism.
The 1.1 million euro threshold should also be monitored throughout the year. If this threshold is exceeded, the reporting frequency will switch to a monthly basis, effective from the month in question.
Pay attention to the impact on VAT credits
Switching to quarterly reporting may seem attractive, as it reduces the number of filings that need to be submitted.
However, this choice must also be examined from the perspective of cash flow.
A business that files monthly returns can request refunds of its VAT credits more frequently. If it files on a quarterly basis, it must wait until the end of the quarter to submit such a request.
For businesses that are regularly in a VAT credit position, maintaining monthly filings may therefore remain more advantageous, even though this entails a greater number of filings throughout the year.
How can one prepare for the 2027 VAT reform?
As January 1, 2027, approaches, businesses registered for VAT in France would be well-advised to anticipate these changes.
It will be necessary, in particular, to analyze the “increased” turnover (chiffre d’affaires majoré), identify the transactions that may be included in its calculation, and determine whether a monthly or quarterly reporting frequency is applicable or preferable.
For foreign companies, this analysis is particularly important in order to avoid an unanticipated change in reporting frequency and to ensure compliance with their filing obligations in France.
Eurotax supports you with your VAT compliance
Eurotax assists foreign companies in managing their VAT obligations in France and throughout Europe.
Our teams handle the various stages of VAT compliance: registration, preparation and filing of returns, monitoring of tax obligations, and assistance with the recovery of VAT credits.
In the context of the reform taking effect on January 1, 2027, Eurotax can also analyze your situation to identify the impact of the new thresholds on your reporting frequency and assist you in preparing for the necessary changes.
Is your company VAT-registered in France? Contact Eurotax to assess the impact of the 2027 reform on your reporting obligations.
