Accounting for CVAE in France: complete 2026 guide

Accounting for the CVAE still matters: no, the CVAE is not abolished in 2026. France's 2025 Finance Act (article 62) postponed its final removal to 2030. The cap rate remains 0.28% for turnover above EUR 50 million in 2026 and 2027, and the returns and advance payments continue to apply for eligible companies.

Updated April 2026 - Accounting for CVAE (Cotisation sur la Valeur Ajoutee des Entreprises, or Value Added Contribution on Companies) requires particular attention in 2026. France's 2025 Finance Act (article 62) postponed the phased abolition of this local business tax: the CVAE is maintained in 2025, 2026 and 2027, then reduced in 2028 and 2029, before final abolition on 1 January 2030. Liable companies must therefore keep accounting for CVAE advance payments, the annual liquidation and adjustments. 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 Économique Territoriale, or CET), alongside the business property tax (CFE). It is payable by companies whose annual turnover exceeds EUR 500,000 (the 1330-CVAE return itself is required from EUR 152,500 of turnover). The rate is progressive based on turnover. The historical maximum rate of 1.5% no longer applies since 2020: after successive reductions, the cap rate for companies with turnover above EUR 50 million is 0.28% in 2026 and 2027.

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 impôts), based on operating revenues and expenses.

The CVAE schedule was revised by the 2025 Finance Act (Act no. 2025-127 of 14 February 2025, article 62), which postpones the abolition to 2030:

• From 2024 to 2027: the CVAE remains due, with the cap rate held at 0.28% for turnover above EUR 50 million.
• From 2028 onwards: the cap rate is phased down (0.19% in 2028, 0.09% in 2029) before final abolition on 1 January 2030. Until then, the CVAE is still declared and paid.
• 2025 exceptional top-up: an exceptional contribution equal to 47.4% of the 2025 CVAE was introduced, paid in full on 15 September 2025 and adjusted in early May 2026; it is excluded from the CET cap.

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

The real timeline, revised by France's 2025 Finance Act (article 62 of Act no. 2025-127 of 14 February 2025), keeps the CVAE in force until 2029 and only removes it on 1 January 2030. Here are the cap rates for companies with turnover above EUR 50 million:

Source: Act no. 2025-127 of 14 February 2025 (art. 62), economie.gouv.fr.

The French General Chart of Accounts (Plan Comptable General) issued by the ANC provides a specific account for CVAE accounting: account 6351, whose official title in the General Chart of Accounts is "Impôts directs (sauf impôts sur les bénéfices)" (direct taxes other than taxes on profits); the CVAE is posted here, usually via a dedicated sub-account (63512 or 635112). This account belongs to Class 6, subclass 63 "Impôts, taxes et versements assimiles" (Taxes and similar payments), category 635 "Autres impôts 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 447 "Other taxes, duties and similar payments" (or directly account 6351, depending on the method chosen)
• Credit account 512 "Bank"

The most common practice is to débit account 6351 directly when the advance is paid, then adjust during the final liquidation. This approach simplifiés 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 447 for the remaining liability.
• If the final amount is less than the advances: debit account 447, 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 4486 "Accrued expenses" (linked to account 447) 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.

Postponing the CVAE abolition to 2030 has direct consequences for financial statement presentation. For financial years ending from 2025:

• 2024 financial year: the CVAE remains due, with a cap rate of 0.28% for turnover above EUR 50 million. Companies retain their calculation supporting documents for potential audits.
• 2025 to 2027 financial years: the CVAE remains due and is recorded normally in account 6351. For 2025, the charge includes the exceptional 47.4% top-up contribution. Account 6351 only reaches a nil balance from 2030, once the abolition is complete.
• 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 the same account 6351, on a separate sub-account (63511, "Contribution économique territoriale"): the General Chart of Accounts has no dedicated 6352 account for the CFE. 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 447 without transferring them to expense. This practice is contrary to the accrual principle.

The planned abolition of the CVAE by 2030 should be anticipated, without lowering vigilance on the current years when the tax is still due:

• keep recording the CVAE charge in account 6351 for each year it is still due (2025 to 2029);
• ensure that adjustments for prior years are correctly processed;
• update dashboards and internal reporting that included CVAE in expense analysis;
• track the annual rate reductions through to 2030 to adjust the amount accrued each year.

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