CFE and CVAE 2026: Where Local Business Taxes Stand

Quick answer. CVAE is not abolished in 2026. The 2025 finance act deferred its removal to 2030, with the top rate frozen at 0.28% for 2026 and 2027. CFE remains payable every year, computed on the rental value of premises used two years earlier (year N-2), with a minimum base set by the local authority.

Every autumn, business owners ask us the same question: is CVAE finally gone? In 2026, the answer is still no. After several announced abolitions and as many deferrals, French local business taxation feels like a permanent construction site. Yet two taxes continue to shape your budget: the business property contribution (CFE) and the contribution on business added value (CVAE), grouped under the CET label (territorial economic contribution).

This is not an academic point. A misjudged minimum CFE base, a CVAE left out of the forecast, or an ignored start-up exemption directly affect cash flow. This status report sets out what is actually due in 2026, the CVAE timeline, and the trade-offs we manage in the files we handle.

No. CVAE remains payable for 2026. The definitive abolition, originally scheduled for 2027, was deferred to 2030 by article 62 of law no. 2025-127 of 14 February 2025 (the 2025 finance act). This is the third successive postponement of a reform announced back in 2021.

In practice, the top CVAE rate is frozen at its 2024 level for tax due in 2026 and 2027, at 0.28% for companies with revenue above 50 million euros. The rate is progressive: a smaller business applies a markedly lower effective rate, computed under a banded scale.

Are you affected? CVAE applies only where pre-tax revenue exceeds 152,500 euros. Below that, no CVAE return is required. Importantly, since the CVAE due for 2024, the minimum contribution has been replaced by a franchise: CVAE is not due where its annual amount does not exceed 63 euros. Many micro-businesses therefore report added value without paying anything.

On top of CVAE sits an additional tax collected for the chambers of commerce and industry. Its rate is set at 9.23% of the CVAE amount for tax established for 2026 and 2027. This line is often forgotten in forecasts, even though it is mechanically tied to CVAE.

The current trajectory, as reflected in the texts in force in spring 2026, provides for a gradual decline until full removal. Unless a new finance act changes it, here is the target.

Two readings stand out. First, the CVAE rate falls, but the additional tax rises sharply from 2028 to keep funding the chambers of commerce. The net gain for the business is therefore smaller than it appears in the final years. Second, this trajectory remains hostage to budget balances: each finance act can defer it again, as has already happened. We track this point every autumn to adjust our clients' forecasts, and we place it within the overview of 2026 business taxation we keep up to date.

For a dedicated analysis of the transition mechanics, see our article on the CVAE abolition trajectory.

CFE is the most stable component of local taxation. It is owed by any individual or company carrying on a habitual, self-employed professional activity, under article 1447 of the French tax code (CGI). This covers both companies and the self-employed, including those working from home.

The tax base is the rental value of property subject to property tax that the business used during year N-2, under article 1467 of the CGI. For CFE due in 2026, the premises used in 2024 are therefore taken into account. This base is then multiplied by the rate voted by the municipality or inter-municipal body, which explains wide differences between locations.

For businesses without premises or with a very low rental value, a minimum base applies. It is set by the municipality or local authority under a six-band revenue scale provided by article 1647 D of the CGI.

These ranges are revalued each year and the authority selects an amount within the range. The detailed mechanics appear in our article on how CFE works in 2026.

Steps to estimate your CFE#

1. Identify the professional premises used in N-2 and their cadastral rental value.
2. Check whether you fall under the real base (actual rental value) or the minimum base.
3. Obtain the rate voted by your establishment's municipality and inter-municipal body.
4. Add the ancillary taxes and management fees shown on the notice.
5. Confirm your eligibility for start-up or zone-based exemptions.

Several schemes reduce CFE, sometimes automatically, sometimes on election or by decision of the local authority. The main ones to know:

• Year of creation: full CFE exemption in the year the establishment is created, then a 50% reduction of the tax base in the first year of actual activity, under article 1478 of the CGI.
• Small receipts: exemption from the minimum contribution where revenue or receipts do not exceed 5,000 euros, under article 1647 D of the CGI.
• Territorial development zones: optional exemptions in urban free zones, priority urban districts or revitalisation areas, with ceilings revalued each year.
• Activities exempt by nature: certain professions and bodies benefit from statutory exemptions set out in the CGI.

We set out these regimes and their conditions in our article on CFE exemptions. One point of attention: most zone-based exemptions require a decision by the local authority and, in some cases, a specific filing within deadlines. An exemption that is not claimed is not refunded automatically.

Micro-entrepreneur. A micro-entrepreneur owes CFE from the second year of activity, even without dedicated premises and even when working from home. They usually fall under the minimum base, unless revenue is below 5,000 euros. By contrast, CVAE does not concern them as long as revenue stays under 152,500 euros.

Holding company or property company. A company whose activity is limited to managing assets may fall outside the scope of CFE if it carries on no professional activity within the meaning of article 1447 of the CGI. The line between asset management and professional activity is assessed case by case, in light of the actual nature of the transactions.

Multi-site business. CFE is due establishment by establishment, at each municipality's rate. An activity spread across several sites can therefore bear very different charges. This is managed upstream, from the choice of location, and forms part of disciplined bookkeeping and accounts review to allocate rental values correctly.

The underestimated risk. In start-up files, the most common mistake is not the first-year CFE, which is exempt, but the second year. The initial 1447-C return must be filed before the end of the year of creation so the tax office can compute the base correctly. A missed return often results in the maximum minimum base being applied by default, heavier than the real base.

What the tax office looks at. The service checks consistency between the declared rental value, the surface actually occupied and the activity. A purely administrative registered address does not exempt from CFE if the activity is carried on elsewhere. As CFE notices are issued without a systematic annual return, many owners never check the base used, even though an error carries over year after year.

Calendar. The CFE instalment, equal to 50% of the contribution, is due by 15 June where the prior-year CFE was at least 3,000 euros. The balance is due by 15 December. CVAE follows its own filing and payment calendar, separate from CFE.

Local taxation suffers from a lack of planning. Because CVAE has been announced as abolished for years, many owners treat it as a vanishing variable and stop building it seriously into their budget. That is a mistake: it remains due in 2026 and 2027 at the full 2024 rate, with the 9.23% additional tax layered on top.

Recently, the director of a Paris-based services SME approached us after receiving a CFE notice they considered excessive. Reviewing the base, we found that the declared rental value related to premises they had left two years earlier, without updating their situation with the business tax office. The base used was therefore structurally overstated. The correction fixed the contribution going forward: a simple documentary review was enough to make several years of local taxation reliable.

Our reading is this: local taxation is less about the rate than about the base and the filing. That is precisely where legitimate savings and corrections lie. As members of the French Order of Chartered Accountants, we systematically build CFE and CVAE into the forecast and cash-flow monitoring, rather than discovering them on the December notice. This trade-off between anticipation and reaction is part of our business tax advisory, and connects with the accounting obligations of SMEs we follow throughout the year.

Hayot Expertise tip. Do not bet your budget on CVAE abolition: until a finance act enacts it, it remains due. Check the base of your CFE notice each year, file the 1447-C return as soon as you start, and have your eligibility for zone exemptions reviewed. An annual local-tax review costs little and prevents errors carrying over across several financial years.