Annual Company Vehicle Tax (TVSF) France 2026: Rates, Calculation and Exemptions
France replaced the old TVS with two new taxes (TVSF) from January 2024. CO₂ component, age component, exemptions for electric vehicles, filing deadlines: the complete 2026 guide for businesses.
Expert note: This article was written by our chartered accountancy firm. Information is current as of 2026. For a personalised review of your situation, contact us.
Since 1 January 2024, France's former taxe sur les véhicules de société (TVS) has been replaced by two cumulative annual levies, collectively referred to as the TVSF. This reform, introduced by the 2024 Finance Act (article 55), splits the tax into a CO₂ emissions component and an age-of-vehicle component. For the 2026 fiscal year, businesses must file their declaration for the 2025 period alongside their Q1 VAT return.
1. Scope: Who Is Affected?#
Corporate entities liable#
Any legal entity subject to corporate income tax (impôt sur les sociétés, IS) or to personal income tax in the industrial/commercial income (BIC) category that owns, leases or uses M1-category passenger vehicles in France is subject to TVSF. This covers:
- SAS, SARL, SA, SNC (when IS-elected), civil companies (SCI) under IS;
- French branches of foreign companies;
- Associations partially subject to IS.
Sole traders and micro-businesses are not in scope.
Taxable vehicles#
M1-category passenger vehicles used in France are taxable, with key exceptions:
- Fully electric and hydrogen vehicles: full exemption (CGI art. 1010-I-1°);
- N1, N2, N3 category vans and trucks: outside scope;
- Ambulances and licensed taxis: excluded.
2. Two Components, Two Calculations#
Component 1: CO₂ Emissions Tax#
For vehicles registered from 1 January 2006, the tax is based on the WLTP (or corrected NEDC) CO₂ figure on the vehicle registration document.
| CO₂ Emissions (g/km) | Rate per gram |
|---|---|
| ≤ 20 g | €0 |
| 21–50 g | €1 |
| 51–120 g | €2 |
| 121–160 g | €4.50 |
| 161–200 g | €9 |
| 201–250 g | €21 |
| > 250 g | €34 |
Example: a vehicle emitting 155 g/km is taxed at 155 × €4.50 = €697.50 per quarter of ownership.
Component 2: Vehicle Age Tax#
This component applies to all non-exclusively-electric vehicles:
| Vehicle Age | Annual Amount |
|---|---|
| ≤ 5 years | €40 |
| 6–10 years | €25 |
| 11–15 years | €15 |
| > 15 years | €10 |
3. Filing and Payment in 2026#
The TVSF is calculated on a quarterly basis and declared annually using form no. 2855, filed alongside the January CA3 (or Q1 CA3 for quarterly filers). Payment is by mandatory electronic transfer when the amount exceeds €1,500.
Late filing carries a 5% surcharge plus 0.20% per month interest (CGI art. 1727).
4. Tax Optimisation Strategies#
- Switch to electric vehicles: zero TVSF and potential 20% VAT recovery on purchase.
- Reclassify as utility vehicles: genuine N1 vans (e.g., cargo variants) fall outside the tax entirely.
- Timing of acquisition: buying on 31 December saves three quarters of TVSF in year one.
- Kilometre allowance vs company car: employees using personal vehicles and receiving mileage refunds do not trigger TVSF.
Frequently asked questions
Is TVSF deductible from corporate income tax?+
No. TVSF is explicitly non-deductible from taxable income (CGI art. 1010). It must be added back in the tax return (form 2058-A or 2033-B).
Does a holding company with a single director's car need to file?+
Yes. Any M1 vehicle owned by a legal entity is subject to TVSF, regardless of the company's size or activity.
How are vehicles used both in France and abroad treated?+
Only the French-use fraction is taxable. A mileage log is required to justify the apportionment. Without documentation, the DGFiP assumes 100% French use.
Are short-term rentals (under 30 days) taxable?+
No. Vehicles rented for fewer than 30 consecutive days are excluded. Beyond 30 days, each started quarter counts.
Can the DGFiP audit TVSF declarations?+
Yes. The DGFiP has access to the vehicle registration database (SIV) and routinely cross-checks it with VAT recovery claims. Undeclared vehicles are a common audit finding.
English practical addendum#
This English section is written for international readers who need to apply the French guidance to a real management decision. The key point for French annual company vehicle taxes is not to memorise every technical rule, but to connect the rule to documents, deadlines, cash impact and governance. For companies operating passenger vehicles, executive cars or mixed fleets in France, the right approach is to identify the decision to be made, collect reliable evidence, and only then choose the accounting, tax, payroll or legal treatment.
The practical decision is whether the company should keep, replace, lease or reorganise vehicles after factoring tax, benefit in kind, mileage and low-emission-zone constraints. That decision should be documented before the year-end close, financing discussion, payroll run, transaction signing or tax filing concerned by the topic. When the matter is material, the file should include who decided, which assumptions were used, and which professional advice was obtained.
Evidence to keep#
- vehicle registration data;
- CO2 and energy category;
- lease or ownership contracts;
- employee-use policy;
- mileage and business-use records;
Vehicle taxation should not be analysed separately from payroll benefits, mileage allowances, ZFE restrictions and the real operating need of the team. A clean file also helps the company answer questions from banks, investors, auditors, tax authorities, employees or buyers. It is usually cheaper to prepare that evidence during the process than to reconstruct it after a dispute, audit or urgent financing request.
Management checklist#
Before acting, management should run a short checklist. First, confirm that the entity, period and perimeter are correct. Second, compare the accounting treatment with the tax, payroll or legal consequence. Third, quantify the cash effect, because a technically valid option may still be unsuitable if it creates a short-term liquidity issue. Fourth, make sure the decision can be explained in plain English to a shareholder, lender, employee or buyer who is not familiar with French terminology.
For French subsidiaries of foreign groups, translation is also a control topic. A term that sounds familiar in English may not have the same legal meaning in France. The safer method is to keep the French source wording in the working file, then add a short English management note explaining the decision, the financial effect and the residual risk.
How Hayot Expertise would frame the work#
In a professional review, the starting point is the business objective. Is the company trying to reduce risk, close the accounts, prepare a filing, obtain financing, retain employees, sell a business or improve reporting? Once the objective is clear, the technical analysis becomes more useful because it is attached to a concrete decision. Hayot Expertise would generally separate the work into three layers: compliance, numbers and management judgement.
The compliance layer answers whether a rule applies and which documents are required. The numbers layer measures the effect on profit, tax, payroll, cash, equity, valuation or working capital. The management layer decides whether the option is consistent with the company's strategy and risk appetite. This separation avoids a common mistake: treating a French technical rule as if it were only an administrative formality.
A fuller decision framework#
For a director who does not work daily with French accounting and tax rules, the safest framework is sequential. Start with the legal form and tax regime of the business. Then identify the income stream, expense, asset, employee benefit, transaction or reporting obligation concerned. Then test the accounting treatment, the tax treatment and the cash effect separately. Only after those three views are consistent should the company automate the process in accounting software or payroll.
This matters because French compliance is document-heavy. A bank feed, invoice, contract, payroll notice or tax form may each be correct on its own, while the overall file remains inconsistent. For example, the accounting entry may not match the tax return, the VAT position may not match the invoice wording, or the management report may not match the board minutes. English-speaking directors should therefore ask for a short reconciliation note whenever the amount is significant.
Questions to ask before closing the file#
- What is the exact French rule or accounting principle being applied?
- Which document proves the amount, date, counterparty and business purpose?
- Does the treatment affect VAT, corporate tax, income tax, payroll or social contributions?
- Is the cash impact immediate, deferred or only visible at sale, audit or financing?
- Who inside the company owns the update next year?
Why this improves SEO and real usefulness#
For an English reader, the value of this article is not a literal translation of the French version. It is the bridge between French terminology and management action. The content should help the reader understand what to verify, what to ask the accountant, and where the risk may sit in the financial statements or cash forecast. That is also the reason the English version keeps the French concepts visible while explaining them in operational language.
When to ask for help#
Professional input is useful when the topic changes the tax result, payroll cost, legal position, financing capacity, valuation or shareholder relationship. It is also useful when the company is growing quickly and the same decision will repeat every month. A small error in a one-off file is inconvenient; the same error embedded in a recurring workflow becomes expensive.
Article written by Samuel HAYOT
Chartered Accountant, registered with the Institute of Chartered Accountants.
Regulated French accounting and audit firm based in Paris 8, built to support companies across France with a digital and decision-oriented approach.
Sources
Official and operational sources cited for this page.
This topic is part of our service Tax accountant in Paris | CIT, VAT & tax audits
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