French Finance Bill 2027: what are the key VAT measures for businesses?

The French Finance Bill for 2027 (PLF 2027), presented to the Council of Ministers and submitted to the French National Assembly on 1 October 2026, contains several important measures relating to value added tax (VAT). At this stage, it remains a draft bill and may therefore be amended during the parliamentary debates.

Against a challenging budgetary backdrop, the French Government is forecasting €511 billion of expenditure within the spending norm and a budget deficit of €156.4 billion. Net tax revenue is expected to reach €375.7 billion in 2027, including €107 billion representing the State’s share of VAT revenue, confirming the significant contribution made by VAT to French State revenue.

Three aspects of the French Finance Bill for 2027 are of particular interest from a VAT perspective: the application of the standard VAT rate to television services, an adjustment to the VAT taxable amount applicable to certain company cars, and several technical changes associated with the recodification of French VAT rules in the CIBS.

Abolition of the 10% intermediate VAT rate for television services

Article 16 of the French Finance Bill for 2027 proposes to abolish the 10% intermediate VAT rate currently applicable to the reception of television services in mainland France and Corsica. These services would therefore become subject to the standard 20% French VAT rate.

The French Government cites the simplification of the VAT treatment of composite offers as the rationale for this measure. Such offers may combine, in particular, linear television services subject to the 10% rate with on-demand multimedia content subject to the standard 20% rate, and may currently require a detailed analysis to determine the appropriate VAT treatment.

While the objective of simplification is understandable, the solution adopted may nevertheless come as a surprise: rather than retaining the intermediate rate for genuine television services, the complexity resulting from the coexistence of two VAT rates would be resolved by abolishing it. In practice, this tax simplification would therefore result in an increase in VAT on television services that currently benefit from the 10% rate, including where they are marketed independently of any composite offer.

For television operators and distributors of audiovisual services, the issue will therefore be both economic and tax-related: whether to absorb all or part of the VAT increase or pass it on through the VAT-inclusive prices charged to consumers.

Company cars: a new “open market value” rule for VAT purposes

Article 25 of the French Finance Bill for 2027 introduces a new corrective mechanism concerning the VAT treatment of company cars made available to employees or company directors.

Since the French tax ruling published on 30 April 2025, making a passenger car available in return for genuine consideration may, subject to certain conditions, constitute a supply of services for consideration subject to VAT and give rise to a right to deduct the input VAT incurred. This development created a genuine opportunity for the businesses concerned to recover VAT.

The French Finance Bill for 2027 now proposes to regulate this arrangement where the consideration paid by the employee is below the open market value. In such circumstances, VAT would no longer be calculated solely on the amount actually paid, but on the price that would have been charged under arm’s length conditions or, where no comparable service exists, on the costs incurred by the employer. Without challenging the principle of VAT deduction itself, this measure could therefore significantly reduce the financial benefit of the arrangement.

One important question nevertheless remains unresolved: can a benefit in kind constitute sufficient consideration for VAT purposes? Several parliamentary questions have been submitted on this issue since June 2025, but none has received a response to date. The latest, submitted by Laurent Marcangeli on 27 January 2026, is still awaiting a reply. Although this question remains legally significant, its financial implications could nevertheless become less substantial following the introduction of the open market value rule.

Under the initial wording of the Bill, this new rule would enter into force on 1 January 2027, with no retrospective effect provided for in respect of earlier periods.

Property VAT and the CIBS: several technical adjustments

Article 19 of the French Finance Bill for 2027 accompanies the recodification of indirect taxation within the French Code of Taxes on Goods and Services (Code des impositions sur les biens et services – CIBS).

Several measures directly concern French property VAT and invoicing obligations:

• an option to subject the letting of undeveloped land to VAT;
• an exemption, with the option to tax, for lettings under certain leases conferring rights in rem;
• VAT on supplies of buildings to be constructed becoming chargeable upon receipt of payment;
• an exemption from the invoicing requirement for certain transactions subject to the zero rate of VAT.

Article 19 also contains measures relating to energy excise duties, together with various technical corrections and coordination measures connected with the recodification work undertaken since 2021.

Other VAT measures

Article 32 of the French Finance Bill for 2027 also provides for stronger penalties in connection with the French VAT retail export scheme, particularly in relation to proof of export and the activities of VAT refund intermediaries.

The proposed measures include a penalty of up to €60 per document where certain requirements relating to proof of export are not met, subject to a maximum of €1 million per year and per taxable person, as well as a penalty equal to 50% of the VAT improperly exempted or refunded in cases involving fraudulent intervention. Article 32 also provides for penalties applicable to VAT refund intermediaries operating without the required authorisation.

French Finance Bill 2027: a draft that may still change

The French Finance Bill for 2027 was submitted to the French National Assembly on 1 October 2026 and is currently undergoing its first reading.

Following examination in committee and in plenary session, the Bill will be referred to the French Senate. Amendments, the parliamentary navette between the two chambers and, where applicable, consideration by a joint committee (commission mixte paritaire) may still result in significant changes to the tax provisions proposed by the French Government.

Once the Bill has been definitively adopted by the French Parliament, the French Constitutional Council (Conseil constitutionnel) may be asked to review it before the Finance Act is promulgated.

The measures analysed above should therefore, at this stage, be regarded as proposals rather than provisions of French law that have been definitively adopted.

BtoBnice will continue to monitor the VAT provisions throughout the parliamentary debates and will provide further updates on the measures ultimately adopted in the French Finance Act for 2027.

For any questions regarding the impact of the French Finance Bill for 2027 on your business or your VAT obligations in France, please contact our experts at contact@btobnice.com

Source : French Finance Bill 2027