The 2025 Finance Law1 introduces a major VAT reform: the abolition of the simplified taxation regime from 1 January 2027.
This change is part of a broader fiscal modernisation movement, in particular with:
- the mandatory electronic invoicing,
- and the introduction of real-time reporting in France.
How does the simplified regime work today (situation in 2026)?
Currently in 2026, the simplified VAT regime applies to companies whose turnover excluding VAT for N-1 does not exceed the following thresholds:
| Type of activity | Turnover excl. VAT threshold (N-1) |
|---|---|
| Sales of goods, restaurant services, accommodation | 945,000 € |
| Provision of services | 286,000 € |
What are the cases of exceeding the thresholds?
The regime may be temporarily maintained even if the thresholds are exceeded, provided that the following limits are not crossed during the year:
- €1,040,000 for sales activities;
- €323,000 for service provision.
How is VAT declared under the simplified regime?
The simplified regime is based on a streamlined reporting structure:
- 2 semi-annual instalments
- 1 annual adjustment return
What changes from 1 January 2027?
From this date:
- The simplified regime will be completely abolished
- All affected businesses will switch to the standard VAT regime
How does the standard VAT regime apply?
The standard VAT regime involves more frequent filings.
| Business situation | Filing frequenc |
|---|---|
| General case | Monthly |
| Turnover ≤ €1 million (year N-1) and ≤ €1.1 million (current year) | Quarterly (by default) |
What happens if the thresholds are exceeded during the year?
If the €1.1 million threshold is exceeded:
- Immediate switch to monthly filing
- Obligation to declare, from the first month concerned, all transactions carried out since the beginning of the quarter
Why is this reform linked to e-invoicing?
The abolition of the simplified regime is part of a broader transformation:
- generalisation of e-invoicing
- automatic transmission of transaction data (e-reporting)
- near real-time VAT monitoring by the tax authorities
What are the consequences for businesses?
This reform involves several significant changes:
- Increased filing frequency
- Adaptation of accounting processes
- Updating of information systems
- Preparation for the transition to the standard VAT regime
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Noémie Almot
Community Manager & Copywriter
Noémie is a specialised content writer at ASD Group. She creates and manages blog articles as well as news updates on our websites, with a focus on VAT, international taxes, customs operations, social regulations, and international trade. With her clear and educational writing style, she makes complex and technical topics easily understandable and relevant for businesses.
