French tax news 2026: what changes for SMEs

Quick answer. The 2026 Finance Act (Act no. 2025-1680 of 14 February 2026) raises the reduced corporate tax (IS) rate cap to €100,000 for eligible SMEs, extends the exceptional surcharge on large groups above €1.5 billion in revenue, confirms the phase-out of the CVAE local tax by 2030, and finalises the general rollout of mandatory e-invoicing from 1 September 2026. On the case-law side, the Conseil d'État clarified in February 2026 the standard of proof for VAT fraud (Cap Nord 595 ruling no. 498332) and the procedure applicable to tax-consolidated groups (Karalius ruling no. 495116).

The pace of French tax changes has accelerated since 2024. Three sources must now be tracked in parallel: the annual Finance Act, doctrinal updates on the BOFiP (the French tax authority's official guidance database, with more than 200 updates over the past twelve months) and Conseil d'État rulings on corporate tax litigation. Add to this European directives — notably the ViDA (VAT in the Digital Age) package — whose first transposition deadlines hit France as early as 2026.

For an SME owner, the goal is not to absorb the entire flow but to spot quickly what changes obligations, trade-offs or accounting provisions. This article gathers the 2026 French tax updates that we, at Hayot Expertise, consider structuring for companies between €250k and €50m in revenue.

Content reference date: 17 May 2026. Each figure is verified against the official source at the time of writing.

15% reduced rate extended to €100,000 of profit#

The headline measure for small structures is the increase in the cap for the 15% reduced IS rate. It moves from €42,500 to €100,000 of taxable profit, under article 31 of Act no. 2025-1680 amending article 219 I b of the French Tax Code. Beyond this cap, the standard 25% rate applies.

To qualify, three cumulative conditions must be met:

• annual revenue (excluding VAT) below €10 million;
• fully paid-up capital;
• at least 75% ownership by individuals (directly or through qualifying entities).

Concrete impact. An eligible SME generating €100,000 of taxable profit now pays €15,000 of IS, compared to €20,750 previously (15% on €42,500 + 25% on €57,500). Maximum saving: €5,750 per fiscal year. For our SASU vs EURL comparison, this measure materially shifts the structural trade-off for owners whose profit caps around €80k–€120k.

Exceptional IS contribution: threshold raised to €1.5bn#

The surcharge on large companies' profits is renewed for 2026, with a markedly higher threshold. It now targets only groups whose consolidated revenue exceeds €1.5 billion (up from €1 billion in 2025), explicitly excluding family-owned mid-caps.

Our dedicated article on the 2026 exceptional IS contribution details the tax base, instalments and capping rules applicable to consolidated groups.

The thresholds of the micro-entreprise regime are revalued for 2026-2028 in line with the INSEE mercurial index.

Mixed activity. Total revenue must remain at or below €203,100, with the service portion not exceeding €83,600.

Exit from the regime. Exceeding these thresholds for two consecutive calendar years triggers exit from the micro regime on 1 January of the third year, with a switch to the simplified real regime and accrual accounting obligations.

For the full set of accounting and reporting duties applicable to micro-entrepreneurs in 2026, see our guide on the 2026 micro-entreprise regime: VAT, income tax and duties.

2026 basic franchise thresholds#

The VAT basic franchise thresholds remain differentiated by type of activity in 2026. The single €25,000 threshold floated in the 2025 Finance Act has been definitively dropped after consultation with professional federations.

ViDA and platform reporting duties#

The European VAT in the Digital Age (ViDA) package, adopted in November 2024 by the Council of the European Union, introduces three pillars: structured e-invoicing and near-real-time VAT reporting for intra-EU transactions, expanded One-Stop Shop, and extended platform liability (short-term rentals, passenger transport). In France, the first obligations enter into force between 2026 and 2030 depending on the pillar. Self-employed individuals selling via Amazon, Etsy, Vinted or Leboncoin remain affected by the strengthened collection and transmission of information by platform operators.

The 2026 Finance Act confirms the progressive elimination of the CVAE (a tax on companies' added value). The official schedule is:

This phase-out concerns companies whose annual revenue exceeds €500,000. The CFE (territorial business tax) is not affected and remains due. Finance directors must adjust multi-year forecasts accordingly — something we systematically embed in our financial steering work for mid-cap clients.

The mandatory e-invoicing calendar is now stabilised, in two distinct phases.

Reception obligation (all companies)#

From 1 September 2026, all VAT-registered companies established in France must be able to receive structured e-invoices (Factur-X, UBL or CII formats) through a platform certified by the French tax authority (PA — formerly PDP).

Issuance obligation (staggered)#

Our 2026-2027 e-invoicing calendar for SMEs details the practical steps: selecting a certified platform, VAT configuration, training sales and back-office teams.

The monthly case-law analyses published by the Conseil d'État are a first-rank source. Three rulings issued between January and April 2026 deserve attention.

1. Cap Nord 595 ruling of 18 February 2026 (no. 498332) — Using fictitious invoices to claim VAT deductions only qualifies as fraudulent manoeuvres under article 1729 CGI when committed knowingly. The intentional element must therefore be evidenced by the tax authority, which shifts the standard of proof in VAT audits.
2. Karalius ruling of 24 February 2026 (no. 495116) — For tax-consolidated groups, omitting the financial impact in the rectification notice addressed to the parent company does not deprive the procedure of the usual safeguard. In practice, this strengthens the need to maintain an up-to-date matrix of adjustments per subsidiary.
3. Mr A. ruling of 16 February 2026 (no. 500909) — The special complaint deadline for withholding taxes violates the principle of equality when shorter than the ordinary deadline for similar income. The ruling opens reclaim opportunities for taxpayers time-barred for 2023 and 2024.

Patrimonial holding companies#

The 2026 Finance Act introduces a specific tax on patrimonial holdings whose assets are mainly passive financial holdings, with precise contours still being clarified by the BOFiP. Owners who structured wealth through a holding must revisit their animation pattern and formalise the parent company's operational activity (centralised management, intragroup services, management fees). Our dedicated dossier on patrimonial holding structuring details the arbitrations involved.

Real-estate civil-law partnerships (SCI)#

SCIs taxed under IS must factor into their forecasts the scheduled end of the CVAE (which some owed above the threshold) and the e-invoicing rollout for commercial leases. Our real-estate and SCI accounting expertise supports more than 80 patrimonial structures on these developments.

Liberal professions taxed under BNC#

The withholding tax instalments for BNC are adjusted in 2026, notably the downward modulation when forecast profit deviates by more than 5% (vs 10% previously). Doctors, lawyers and consultants in liberal practice can therefore smooth cash flow more efficiently during atypical years.

• Do not confuse micro-entreprise thresholds with VAT franchise thresholds. The two regimes are independent: a micro-entrepreneur may be liable for VAT when exceeding €37,500 or €85,000 of revenue while remaining in the micro tax regime.
• Verify full capital paid-up before claiming the SME reduced IS rate. An SME with only 50% paid-in capital is excluded, even if it meets the revenue and ownership conditions.
• Plan the e-invoicing switch six months ahead. Setting up a certified platform, reconciling with accounting software and training teams typically takes four to eight weeks of active mobilisation.
• Provision CVAE at the 2026 rate (0.19%), not at the 2025 rate, to avoid overstating the tax expense in interim accounts.

The 2026 season confirms a three-year trend: French tax law is becoming more complex for the largest companies and marginally simpler for SMEs. Available arbitrations for SME owners (€1m-€10m revenue) concentrate on three levers — the reduced IS rate, owner remuneration optimisation (see our dividends versus salary trade-off in 2026) and proactive monitoring of sector-specific tax credits.

Recently, the owner of an industrial SME in the Paris region (€4.2m revenue, 22 employees) approached us after receiving a rectification notice covering three fiscal years. The internal audit we conducted revealed that VAT deduction on company cars had been applied incorrectly relative to the BOFiP doctrine update of 30 April 2025. Voluntary regularisation enabled us to reduce the proposed adjustments by 28% and avoid the 40% penalty for deliberate breach. This case illustrates the importance of structured monitoring: an owner operating alone simply lacks the bandwidth to absorb 200+ BOFiP annual updates.

At Hayot Expertise, a firm registered with the Order of Chartered Accountants of Paris Île-de-France, we have formalised a three-layer monitoring system: daily RSS feed on BOFiP and the Official Journal for the responsible partner, monthly synthesis sheet for subscribed clients, and individualised alerting within 72 hours whenever an update affects an active file. This reproducible method can be adapted by an in-house CFO with one to two hours of weekly bandwidth.

Hayot Expertise tip. Build your own four-line tax monitoring dashboard: legislation (Finance Act, Social Security Financing Act, decrees), doctrine (BOFiP, published rescripts), case law (Conseil d'État, CAA, Cour de cassation) and EU soft law (directives in transposition). Assign a named owner and set frequencies (weekly for legislation, monthly for doctrine). Without a structured system, the risk of missing an opportunity — or a pitfall — grows proportionally with company size.

• The 2026 Finance Act (Act no. 2025-1680 of 14 February 2026) raises the SME reduced IS rate cap to €100,000.
• The exceptional IS contribution now applies only to groups above €1.5bn in revenue (20.6% then 41.2%).
• The CVAE is gradually removed between 2026 (0.19%) and 2030 (full removal).
• E-invoicing is mandatory for reception by all companies from 1 September 2026; for issuance from 1 September 2026 (large companies and mid-caps) and 1 September 2027 (SMEs and micro-entreprises).
• The Conseil d'État clarified in February 2026 the VAT fraud standard of proof and the procedure for tax-consolidated groups.
• A structured tax monitoring system across BOFiP, the Official Journal and case law is now indispensable for SME owners.