France delays CVAE abolition, adjusts rates and CET cap. The provisions are mandatory for financial years beginning on 1 January 2025.
France announced on 19 November 2025, a postponement of the definitive abolition of the Cotisation sur la Valeur Ajoutée des Entreprises (CVAE) and updated key rates under Law No. 2025-127 of 14 February 2025 on Finance for 2025.
CVAE rate adjustments
Article 62 of the law extends the timeline for CVAE abolition by three years, now scheduled for 2030. The maximum CVAE rate, set at 0.19% for 2025, will rise to 0.28% for 2026 and 2027, before decreasing to 0.19% in 2028 and 0.09% in 2029. Relief for companies with turnover below EUR 2 million will be adjusted proportionally.
CET cap rate changes
The cap rate of the Contribution Économique Territoriale (CET) based on value added will gradually decrease from 1.438% in 2025 to 1.25% from 2030.
Accounting standards update
The Accounting Standards Authority (ANC) has adopted Regulation No. 2022-06 on 4 November 2022, amending ANC Regulation No. 2014-03 of 5 June 2014 concerning the general chart of accounts. Key changes include a new definition of extraordinary income and reclassification of certain transactions contributing to extraordinary income into operating income.
Under the principle of tax-accounting connection, the value added used as the CVAE tax base is determined according to accounting standards applicable to individual financial statements. Companies must refer to the accounting standards in force for the relevant tax year to classify income and expenses.
Doctrinal comments have been updated to reflect the tax consequences of these accounting changes, providing clarifications on the determination of the CVAE tax base for companies covered by I, IV, and V of Article 1586 sexies of the French General Tax Code.
These provisions are mandatory for financial years beginning on 1 January 2025.
