Goodwill Amortization in France 2026: Tax Rules, Accounting and Practical Cases

Goodwill amortization is allowed under French accounting rules (PCG art. 214-3): over the useful life, or ten years where it cannot be reliably estimated, and small companies may elect ten years without justification. Tax deductibility is temporary: it covered goodwill acquired between 2022 and 2025, and the 2026 Finance Act (art. 13) extended it to goodwill acquired up to 31 December 2029. A 2026 acquisition is therefore within the window.

Updated 25 September 2026.

Goodwill amortization in France sits at a crossroads between accounting rules and tax law — and the two have not always agreed. A temporary reform introduced by the Finance Act 2022 (LFI 2022, art. 23) created a narrow window of tax deductibility for business goodwill acquired between 1 January 2022 and 31 December 2025, which the 2026 Finance Act (art. 13) extended to goodwill acquired up to 31 December 2029. Understanding what changed, what remains unchanged, and what to expect for acquisitions made in 2026 is essential before signing any business transfer agreement.

In brief: Before LFI 2022, accounting amortization of goodwill was permitted under PCG rules but was never tax-deductible. LFI 2022 opened a temporary deduction window for qualifying SME acquisitions from 2022 to 2025. For 2026 acquisitions, the default rule — accounting amortization with no tax deduction — should apply again, unless an extension is confirmed (unconfirmed as of the date of this article).

Following the 2015 reform of the French Chart of Accounts (Plan Comptable General, PCG), goodwill may be amortized over its useful life if that life can be reliably estimated. Where no reliable estimate is possible, the PCG requires straight-line amortization over ten years.

However, the General Tax Code (CGI art. 39-1-2) has long excluded the tax deductibility of such amortization. The practical result was a recurring accounting charge that had to be added back in the tax return each year — a compliance burden with no immediate tax benefit.

The Finance Act for 2022 introduced an exceptional derogation: for goodwill acquired (not created) between 1 January 2022 and 31 December 2025, the annual accounting amortization becomes tax-deductible. The 2026 Finance Act (Law no. 2026-103 of 19 February 2026, art. 13) extended the measure by four years: it now covers goodwill acquired up to 31 December 2029, for financial years ending on or after 1 January 2026. The measure applies, with no company-size condition: this temporary tax measure applies to any acquiring business, regardless of its size.

This temporary measure aimed to support business succession in the post-Covid environment by improving cash flow for acquirers during the holding period.

Key conditions of the temporary regime:

• Only acquired goodwill qualifies — not internally generated goodwill
• The acquisition date is determinative: an acquisition after 31 December 2029 will fall outside the window, unless extended again
• The deductible amount is capped at the accounting amortization charge for the year
• Amortization must be calculated over the useful life, or over ten years on a straight-line basis if no reliable useful life can be established
• Impairment testing remains required: every year if the goodwill is not amortized, and whenever there is an indication of impairment if it is

The useful life of goodwill is not an arbitrary parameter. It must be supported by a documented economic analysis covering:

• Customer retention: historical loyalty rates, purchase frequency, competitive intensity
• Geographic anchoring: is the goodwill tied to a physical location (bakery, artisan) or transferable regardless of location?
• Market durability: growing, stable, or declining sector?
• Key-person dependency: does the value depend heavily on the seller remaining involved?
• Brand transferability: can the goodwill and its reputation travel with the business without the seller?

A period of five to ten years is typically retained for standard commercial goodwill. Shorter durations of three to five years may be justified for highly competitive sectors or activities strongly linked to the seller.

At acquisition:

Goodwill is recorded at cost (agreed price plus directly attributable acquisition costs: notary fees, registration duties, advisory fees) in account 207 — Fonds commercial.

Each financial year — amortization:

• Debit: 68111 — Dotations aux amortissements des immobilisations incorporelles
• Credit: 2807 — Amortissement du fonds commercial

Impairment test (PCG art. 214-15):

At each year-end, the business looks for any indication of impairment; the test is mandatory every year if the goodwill is not amortized. Where the recoverable amount of the goodwill is below its net book value (NBV), an impairment loss must be recognized:

• Debit: 68162 — Dotations aux depreciations des immobilisations incorporelles
• Credit: 29071 — Depreciation du fonds commercial

For goodwill within the temporary window (2022-2029 acquisitions):

• The annual amortization charge is tax-deductible: no add-back is required on Form 2058-A
• The tax authorities may challenge the useful life if not supported by documented economic analysis

For goodwill outside the window (pre-2022 or post-2029 acquisitions):

• The annual accounting charge must be added back on Form 2058-A (permanent difference)
• Impairment losses remain deductible under CGI art. 39-1-5 if conditions are met
• Systematic tracking is required in the reconciliation table between accounting profit and taxable income

PCG art. 214-15 requires a review for indications of impairment at each year-end, and a systematic annual test for goodwill that is not amortized. The test compares:

• Recoverable amount (RA): the higher of fair value less costs to sell and value in use
• Net book value (NBV): gross cost minus cumulative amortization and prior impairment

Where RA < NBV: an impairment loss must be recognized.

The underestimated risk: a business owner who acquires goodwill in a competitive sector and does not monitor these indications each year is taking an accounting presentation risk. Deteriorating conditions — loss of key customers, closure of a commercial location, unfavorable market shift — that are not reflected in the accounts may be flagged during a tax compliance review (ECF) or an audit as an irregular understatement of results.

The gain on disposal of goodwill is calculated as (PCG art. 322-9, CGI art. 39 duodecies):

Gain = Sale price minus Net book value (NBV)

NBV decreases as amortization accumulates. For EUR 300,000 of goodwill amortized at EUR 30,000 per year, the NBV after five years is EUR 150,000. If the goodwill is sold for EUR 350,000, the taxable gain is EUR 200,000 — not EUR 50,000 as it would have been without amortization.

The temporary tax deduction during the holding period creates a short-term cash flow benefit, but it inflates the taxable gain on exit. The overall assessment depends on the holding period, the applicable tax rate and how the gain is taxed: at the standard rate for a company subject to corporate tax; for a business subject to income tax, as a short-term gain up to the amortization deducted and a long-term gain above it.

Tax Trade-Off: Holding Period and Corporate Tax Rate#

The treatment decision should never be made without modelling the disposal and its tax consequences.

A limited company (45 employees, EUR 3.2 million turnover) acquires a traditional bakery business in the 12th arrondissement of Paris in March 2024 for EUR 300,000.

Eligibility for LFI 2022:

• Acquisition between 2022 and 2025: yes (March 2024)
• Company-size condition: none (the measure applies regardless of size)

Useful life retained: 10 years straight-line — stable local customer base, solid commercial location

Annual amortization: EUR 300,000 / 10 = EUR 30,000 per year

Tax deductibility: yes, under the LFI 2022 regime. Annual corporate tax saving at 25%: EUR 7,500 per year, giving EUR 75,000 in cumulative savings over 10 years.

On disposal — assumption: sale for EUR 320,000 in 2031, after 7 years:

• NBV in 2031: EUR 300,000 - (7 x EUR 30,000) = EUR 90,000
• Taxable gain: EUR 320,000 - EUR 90,000 = EUR 230,000, taxed at the standard corporate tax rate (the SARL is subject to IS)

A SAS subject to corporate tax acquires the business (fonds de commerce) of a professional supplies wholesaler in January 2026 for EUR 1,500,000.

Eligibility:

• Acquisition in 2026: within the window extended by the 2026 Finance Act (goodwill acquired up to 31/12/2029)
• Company-size condition: none

Treatment:

• Documented useful life: 10 years (recurring B2B customers, limited dependence on the seller)
• Annual charge: EUR 1,500,000 / 10 = EUR 150,000 per year, deductible
• Corporate tax saving at 25%: EUR 37,500 per year
• Review for indications of impairment at each year-end

Our view: the extension does not remove the need to allocate the purchase price between goodwill and separable assets (brand, contracts, inventory), which are treated differently. If signing could slip past 31 December 2029, timing becomes a tax parameter. This should be reviewed with a chartered accountant and, where appropriate, a tax lawyer, before the transaction closes.

1. Amortizing without monitoring indications of impairment

Recording amortization without the review of impairment indications required by PCG art. 214-15 is a presentation error. During an ECF or audit, the absence of the test can be flagged even if no impairment loss was actually due.

2. Misclassification: goodwill vs. brand vs. customer relationships vs. patents

A single acquisition price may bundle several distinct intangible assets. A brand can be separable and amortized differently. Customer relationships may qualify as a distinct asset depending on their contractual nature. The initial allocation determines all subsequent accounting and tax treatment.

3. Useful life not supported by documented analysis

Defaulting to 10 years without economic analysis leaves the file exposed during an ECF. The tax authorities routinely scrutinize the basis for the useful life chosen.

4. Confusing the annual tax saving with the overall economic advantage

The deductions accumulated during the holding period may be partially or fully offset by the increased gain on disposal. A full simulation covering all years of ownership and the exit scenario is essential.

5. Forgetting the add-back for out-of-window acquisitions

For goodwill acquired before 2022 or after 2029, failing to add back the accounting charge in the tax return constitutes a filing error that may trigger interest and potentially penalties.

The Examen de Conformite Fiscale (introduced by decree no. 2021-25 of 13 January 2021) covers the conformity of amortization and impairment charges. For goodwill, the key points reviewed include:

• Existence and conformity of the amortization schedule
• Consistency between the useful life retained and the economic reality
• Performance and documentation of the impairment test
• Correct tax add-back or deduction depending on the applicable regime
• Consistency between the accounting treatment and Form 2058-A

Subscribing to an ECF in the acquisition year and the first amortization years provides documented assurance and protection against penalties on this specific point.

Discover our ECF advisory service

• Window extended to 31/12/2029: the 2026 Finance Act (art. 13) extended the measure. The text includes anti-abuse rules, notably for transactions between related companies: check them in BOFiP (ACTU-2026-00042) before signing.
• Acquisitions currently under negotiation: the signing date of the deed of transfer determines eligibility — plan ahead before the negotiation closes.
• Restructurings and contributions: the LFI 2022 regime applies only to acquisitions for value. Contributions in kind, mergers, and partial asset contributions may follow different rules.
• Change of method: switching from a non-amortized to an amortized treatment requires justification and must be handled as a change in accounting method.

Goodwill amortization is never a standalone decision. It fits within a broader framework: acquisition price, financing structure, intended holding period, exit strategy, legal structure of the owner (sole trader or corporate entity subject to corporate tax), and future exposure to capital gains taxation.

This article reflects the rules in force as of 25 September 2026 and provides general information only. It does not replace a review of your specific transaction documents, acquisition structure, and applicable law at the date of your operation. Sources: Legifrance (PCG art. 214-3, 214-15, 322-9; CGI art. 39-1-2, 39-1-5, 39 duodecies), LFI 2022 art. 23, 2026 Finance Act art. 13, BOFiP BOI-BIC-AMT-10 and ACTU-2026-00042. Reviewed by Samuel Hayot, chartered accountant (expert-comptable), Paris.