France will abolish its simplified VAT declaration regime from January 1, 2027, under Article 38 of the 2025 Finance Law, requiring all businesses above the VAT exemption threshold to transition to monthly or quarterly CA3 filing obligations.
System Changes
The simplified regime's structure of two semi-annual advance payments followed by an annual adjustment declaration (CA12) will be eliminated. All businesses will use the standard CA3 form with filing frequency determined by annual turnover thresholds.
Businesses with turnover below €1,000,000 in the previous year or €1,100,000 in the current year will file quarterly returns by default, with monthly filing required above these levels. When the €1,000,000 threshold is exceeded in a year, monthly filing becomes mandatory from January 1 of the following year.
For mid-year threshold breaches above €1,100,000, businesses must immediately switch to monthly filing from the month of breach, with the first monthly return covering all operations since the start of the current quarter.
Administrative Impact
The reform eliminates an intermediate compliance tier that historically served small and medium enterprises seeking reduced administrative burden. Businesses previously benefiting from simplified reporting will face increased filing frequency, requiring enhanced accounting systems and more frequent VAT reconciliation processes.
Context
This change aligns with France's broader fiscal digitalization efforts, including mandatory electronic invoicing reforms, and reflects a European trend toward more frequent VAT reporting to improve collection efficiency and reduce compliance gaps across member states.
