Cross‑Border Tax Forecast 2026 in France

The 2026 Finance Bill measure extends the exceptional contribution to the first two financial years ending on or after 31 December 2025.

Corporate income taxpayers are in scope if their turnover is at least EUR 1 billion for the first relevant year (or the preceding year) and EUR 1.5 billion for the second. The base is unchanged: the average CIT due for the relevant year and the preceding year, computed on all taxable results, before any reductions, credits or other tax receivables. For smoothing in year two, when turnover is between EUR 1.5 billion and EUR 1.6 billion, the 20.6% rate is multiplied by the ratio of:

• the difference between the higher of the two turnover figures and EUR 1.5 billion to
• EUR 100 million. 

From 2026, it applies to large companies corresponding to roughly 300 groups. Unlike 2025, mid-cap companies (ETI) are excluded from the contribution’s scope for 2026.

• Confirm scope: test turnover thresholds for the relevant periods and define the applicable perimeter
• Monitor developments: track administrative guidance and implementation rules of the 2026 Finance Bill and adjust timelines accordingly

The reform is based on French VAT rules. It aims to enable the pre-filling of French VAT returns. The reform covers both purchases (accounts payable or AP) and sales (accounts receivable or AR) made by taxable persons carrying out transactions subject to French VAT, including non-established companies registered for VAT in France. Certain specific transactions are excluded from the scope of the reform. 

As of 1 September 2026:

• all taxable persons established in France will have to be able to receive e-invoices from their French established suppliers
• very large and medium-sized taxable companies will have the obligation, when established in France, to issue e-invoices to their French business clients and, irrespective of their place of establishment, to provide data (e-reporting obligation) on all transactions not covered by e-invoicing and for which the companies are liable for French VAT (e.g. intra-EU acquisitions on the purchase side and B2C transactions on the sale side).

As of 1 September 2027, these obligations will apply to all companies irrespective of their size.

To comply with the reform, it is mandatory to designate an approved platform (PA), i.e. a private company accredited by the French authorities for the transmission of e-invoices and e-reporting files. The reform also affects foreign companies established outside France liable for French VAT, except when French VAT is declared and paid via the One-Stop Shop or Import One-Stop Shop (OSS/IOSS). The formats of e-invoices and e-reporting files accepted under the reform are strictly defined.

• Determine whether the company is liable for obligations under the French reform
• If so, establish the applicable calendar and identify the exact scope of the obligations under the reform (AP and/or AR, e-invoicing, e-reporting etc)
• Based on this preliminary work, select and designate one or more PA

In December 2025, the French Tax Authorities (FTA) updated their official doctrine on transfer pricing (TP) documentation and audit to take into account the provisions of the 2024 Finance Act. TP is expected to remain a key focus of tax audits in 2026.

The provisions of the 2024 Finance Act have amended several articles of the French Tax Code (CGI) with the aim of strengthening the ability of the FTA to detect and take action against abusive uses of TP rules. In summary, these amendments:

• increased the number of companies subject to TP documentation requirements and the penalties that may be applied, and modified the scope of TP obligation
• strengthened the means available to the FTA to audit transfers of hard-to-value intangibles.

The changes introduced by the 2024 Finance Act to TP documentation and audit procedures are substantial and are expected to have significant practical implications.

On documentation of the TP policy:

• for the preparation of documentation, the threshold initially applicable was set at EUR 400 million in turnover or gross assets; this threshold has now been lowered to EUR 150 million
• the minimum amount of penalty for failure to provide documentation has been increased to EUR 50,000
• documentation made available to the FTA is now binding on companies; this new rule introduces a reversal of the principle under which, in TP matters, the burden of proof lies with the FTA.

On the audit of intra-group transfers of hard-to-value intangibles:

• the 2024 Finance Act introduced the possibility for the FTA, for financial years beginning on or after 1 January 2024, to adjust the value of certain assets transferred within a group based on results performed after the financial year in which the transaction occurred. This rule therefore introduces an exception to the principle under which the FTA must assess the transaction as at the time it was carried out when making an adjustment. In order to make this new tool fully effective, the statute of limitations available to the FTA, currently set at 3 years, has been extended so as to expire at the end of the sixth year following the year in respect of which the tax is due.

• Carefully review the TP obligations
• Pay attention to consistency between the implementation of TP policy and its description in documentation
• Review/update of existing intra-group agreements