Accounting for CVAE in France: the complete 2026 guide

Updated April 2026 - Accounting for CVAE (Cotisation sur la Valeur Ajoutee des Entreprises, or Value Added Contribution on Companies) requires particular attention in 2026. The 2024 Finance Act introduced a phased abolition of this local business tax: a 50% reduction for the 2024 tax year, followed by complete abolition for income from 2025 onwards. However, companies must still account for prior years' charges, potential adjustments and any remaining liquidations. Understanding the CVAE accounting treatment remains essential for producing reliable financial statements.

The CVAE was one of the two components of the French territorial economic contribution (Contribution Economique Territoriale, or CET), alongside the business property tax (CFE). It was payable by companies whose annual turnover exceeded EUR 500,000. The CVAE rate was progressive based on turnover levels, ranging from 0% for companies below EUR 500,000 in revenue to 1.5% for those exceeding EUR 50 million.

The tax base was the value added generated by the company, determined from income statement accounting data. Value added was calculated using a specific formula set out in the French General Tax Code (Code general des impots), based on operating revenues and expenses.

The CVAE phase-out schedule was established by the 2024 Finance Act (Loi de finances pour 2024):

• ▸For the 2024 tax year: a 50% reduction in the CVAE amount calculated under standard rules. Affected companies therefore paid half of what would previously have been due.
• ▸From 2025 onwards: complete abolition of the CVAE. Income earned in 2025 is no longer subject to this tax, and no 1329-DEF return will need to be filed for that year.
• ▸Residual adjustments: companies may still need to process adjustments for the 2023 and 2024 tax years, particularly in the event of a tax audit or correction of property value declarations.

See also tax filings: VAT, corporate income tax and instalments, business taxation overview and tax return package definition.

The French General Chart of Accounts (Plan Comptable General) issued by the ANC provides a specific account for CVAE accounting: account 6351, titled "Cotisation sur la valeur ajoutee des entreprises (CVAE)". This account belongs to Class 6, subclass 63 "Impots, taxes et versements assimiles" (Taxes and similar payments), category 635 "Autres impots et taxes" (Other taxes and duties).

Account 6351 must be used to record the CVAE charge in the income statement. It should not be confused with account 691 "Employee profit-sharing" or with corporate income tax accounts (Class 69). The CVAE is a production tax linked to the company's economic activity, not a tax on profits.

CVAE accounting follows a two-stage calendar: advance payments made during the year, followed by the final liquidation after the financial year closes.

Recording advance payments

Companies liable for CVAE were required to pay two advance instalments during the year, calculated based on the most recent filed return. Each advance payment generates the following entry:

• ▸Debit account 44551 "Taxes payable" (or directly account 6351, depending on the method chosen)
• ▸Credit account 512 "Bank"

The most common practice is to debit account 6351 directly when the advance is paid, then adjust during the final liquidation. This approach simplifies tracking but requires particular attention during year-end closing work.

Final liquidation and adjustment entries

After the financial year closes, the company files its 1329-DEF return, which determines the definitive CVAE amount. The difference between advance payments made and the final amount triggers an adjustment entry:

• ▸If the final amount exceeds the advances: debit account 6351 for the balance, credit account 44551 for the remaining liability.
• ▸If the final amount is less than the advances: debit account 44551, credit account 6351 to recognise the overpayment (which may be refunded or offset against other taxes).

Balance sheet treatment: provisions and accrued charges

At year-end, if the final liquidation has not yet been determined, the company must recognise an accrued charge under account 44551 for the estimated remaining CVAE due. This estimate is based on available accounting data: turnover achieved, average headcount and fixed asset values. The French General Chart of Accounts requires that charges relating to the financial year be recorded even if not yet settled (accrual principle, Article 123-12 of the French Commercial Code).

Hayot Expertise advice: CVAE-related accounting confusion most often comes from poor calendar management. When advance payments, the final return and the closing entries are all treated separately without a coordinated approach, the year-end closing becomes unnecessarily messy and the risk of error increases. The best practice is to maintain a separate tracking schedule for each tax year, detailing advances, liquidation estimates and the corresponding adjustment entry.

The CVAE abolition has direct consequences for financial statement presentation. For financial years ending in 2025 and beyond:

• ▸2024 financial year: the CVAE charge recorded in account 6351 corresponds to 50% of the standard amount. Companies must retain their calculation supporting documents for potential audits, even though the tax was reduced.
• ▸2025 and subsequent financial years: no CVAE charge should be recorded in account 6351, as the tax has been abolished. Account 6351 should therefore show a nil balance for these years, except for late adjustments relating to prior years.
• ▸Retroactive adjustments: if a tax audit results in a CVAE correction for the 2023 or 2024 tax years, the accounting adjustment must be treated according to the rules applicable to changes in estimates or errors, in accordance with ANC provisions.

Several errors recur frequently in the CVAE accounting treatment:

Confusing CVAE and CFE. The business property tax (CFE) is recorded in account 6352, separate from 6351. Mixing the two distorts expense analysis by nature and complicates reconciliation with tax returns.

Forgetting accrued charges. Many companies fail to recognise the accrued charge at 31 December when the final liquidation has not yet occurred. This omission understates the year's expenses and delays recognition of the corresponding liability.

Misprocessing adjustments. A CVAE overpayment should not be recorded as exceptional income but should reduce account 6351 for the relevant year. Conversely, a CVAE shortfall must be recognised as an expense of the year to which it relates, even if payment occurs the following year.

Leaving advances in suspense accounts. Some files keep CVAE advances in account 44551 without transferring them to expense. This practice is contrary to the accrual principle.

The disappearance of the CVAE simplifies the tax landscape for companies, but it requires updates to accounting processes:

• ▸verify that account 6351 is no longer being charged for financial years ending from 2025;
• ▸ensure that adjustments for prior years are correctly processed;
• ▸update dashboards and internal reporting that included CVAE in expense analysis;
• ▸inform accounting teams of the abolition to prevent habitual entries being posted in error.

We can help you review the CVAE accounting treatment, advance payment entries and final liquidation, as well as correctly handling adjustments for prior financial years.

👉 Improve the reliability of your business tax accounting and year-end closings

Is the CVAE completely abolished in 2026?

Yes, the CVAE has been abolished for income from 2025 onwards. No CVAE is therefore due for the 2025 tax year and subsequent years. However, companies may still need to process adjustments for the 2023 and 2024 tax years, particularly in the event of a tax audit or return correction.

Which accounting account should be used for CVAE?

CVAE is recorded in account 6351 "Cotisation sur la valeur ajoutee des entreprises (CVAE)", as provided by the French General Chart of Accounts (ANC). Advance payments can be charged directly to this account or pass through account 44551 "Taxes payable" before adjustment.

How should a CVAE overpayment be treated in accounting?

A CVAE overpayment (where advance payments exceed the final amount) should reduce account 6351 for the relevant financial year. It is not classified as exceptional income. If the overpayment is refunded by the tax authorities, the refund is offset against the third-party account used for the initial recognition.

Do companies still need to declare CVAE in 2026?

No. The 1329-DEF return is no longer required for income from 2025 onwards. Companies that were subject to CVAE should, however, retain their returns for prior years within the tax assessment limitation period (generally 3 years).

In 2026, CVAE accounting primarily concerns adjustments for prior financial years, as the tax was abolished from 2025. Companies must ensure that charges for the 2023 and 2024 tax years have been correctly accrued, that adjustments are treated in accordance with the French General Chart of Accounts, and that account 6351 shows no further movements for financial years ending from 2025. This vigilance is essential for producing reliable, defensible accounts in the event of an audit.

📞 Want a review to verify that your CVAE accounting treatment is consistent across your filings and accounts? Our firm can review the entries and the filing timeline. Book an appointment with an expert

(Official sources: form 1329-DEF 2026 on impots.gouv.fr, BOFiP on CVAE, ANC General Chart of Accounts as of 1 January 2026, 2024 Finance Act Article 7 on CVAE abolition)