VAT-CIBS Reform 2026, Postponed to 1 January 2027: What Your Business Must Prepare For

1 January 2027 is a date to mark in your fiscal calendar. Every VAT rule applicable in France — spread across Articles 256 to 310 HA of the Code général des impôts (CGI) for decades — transfers into the Code des impositions sur les biens et services (CIBS), apart from the CGI provisions whose repeal is deferred until the regulatory texts that take them over come into force, such as Article 287 on returns. The reform is presented as carried out "at constant law" (à droit constant): no rate increases, no new substantive obligations. Yet its practical implications are real and require active preparation before the pivot date.

Quick answer. The ordinance organising the recodification applies from 1 January 2027 (postponed from 1 September 2026), with a transitional period running to 30 June 2028. No VAT rates, no filing regime and no deduction mechanism is modified by this ordinance; the simplified VAT scheme (CA12), however, is abolished on the same date by the 2025 Finance Act. However, article numbering changes, terminology is partially updated, and accounting software must incorporate the new references.

The Code des impositions sur les biens et services was created by the ordinance of 22 December 2021. Initially restricted to taxes on specific products (tobacco, alcohol, electricity, fuel), it is designed to become the single reference for all indirect taxes on goods and services in France.

The legislator has three ambitions:

• Modernise an ageing legal framework, partly inherited from the 1960s.
• Harmonise definitions and terminology with European directives and recent Court of Justice of the European Union (CJEU) case law.
• Improve readability for businesses and practitioners by organising rules thematically rather than by legislative history.

The result: approximately 230 CGI articles devoted to VAT are replaced by close to 1,000 CIBS articles, organised into five thematic titles.

The phrase is reassuring but deserves some nuance. "At constant law" means that no substantive change is introduced by the mere act of transfer: VAT rates, deductibility rules, exemptions and filing regimes are not modified by the recodification. The simplified VAT scheme (CA12) nonetheless disappears on 1 January 2027, under a separate text: the 2025 Finance Act (Article 38).

Three operational changes are nevertheless unavoidable:

1. Article numbering changes. An internal document citing "Article 271 of the CGI" for input VAT deduction will need to reference the corresponding new CIBS article. The correspondence tables published by the tax authority will be the essential working tool throughout this transition.

2. Terminology is partially updated. The expression "intracommunautaire" disappears in favour of "intra-européen" throughout the corpus. Certain key definitions (taxable person, chargeable event, taxable amount) are reformulated to align with recent CJEU case law. These adjustments do not affect substantive law, but they require an update of contracts, internal tax instructions and document templates.

3. ERP systems and software that automatically generate legal references will need to incorporate the new CIBS references in their interfaces and in the automatic mentions appearing on invoices or VAT schedules.

Every VAT-registered business in France is affected by the transition to the CIBS, regardless of size, sector or filing regime. The practical impact varies, however, depending on the complexity of the business's VAT exposure.

Note: mandatory e-invoicing (reception from 1 September 2026, emission for SMEs from 1 September 2027) follows its own separate timetable; the CIBS switch was postponed to 1 January 2027 so that the two would not coincide.

Communications around the CIBS emphasise the "neutral" character of the reform. This is correct in terms of substantive law. But in client files involving complex VAT, the most frequent friction points during transitions of this type are rarely linked to the underlying rules — they are linked to documentation and software automation.

Three concrete risks deserve attention:

The software risk. Certain ERP systems and invoicing tools automatically generate legal mentions referencing CGI articles (notably the article covering an exemption or reverse charge on an invoice). If the software is not updated, invoices issued after 1 January 2027 will carry obsolete references. This is not an immediate criminal risk during the transitional period, but it is a source of confusion during a tax audit.

The straddling audit risk. For businesses subject to a tax audit covering both 2025–2026 and subsequent periods, teams will need to master both reference systems simultaneously. Preparing an internal correspondence table before any audit commences is a sensible precaution.

The contractual risk. Long-term contracts (leases, recurring service agreements) that cite CGI articles to define the applicable VAT treatment will need to be reviewed. During the transitional period the CGI reference is read as a reference to the CIBS article that takes over the cited article; after 30 June 2028, ambiguity could arise if the parties interpret differently how the applicable rule has evolved.

A mid-sized industrial SME with regular intra-EU transactions and an ERP configured several years ago illustrates the CIBS transition challenges well.

During a preventive VAT audit carried out ahead of the reform, three findings emerged: the reverse-charge mentions on subcontracting invoices automatically referenced Article 283-2 of the CGI in the ERP template; the internal tax instructions given to the sales administration team cited the old texts without any update since the 2024 franchise en base reform; and the framework agreement with a German customer mentioned "in accordance with Article 262 ter I of the CGI" to document the VAT exemption on intra-EU supplies.

The compliance work involved identifying the four affected document templates, contacting the ERP vendor to schedule the reference update, producing an internal note with the new CIBS references, and adding an amendment to the framework agreement replacing the obsolete CGI reference with its CIBS equivalent, before the transitional period expires.

Overall timeframe: approximately six weeks, primarily dependent on the ERP vendor. Costs were contained because the work was anticipated. The same exercise completed urgently following a finding during a tax audit would have been significantly more expensive in time and risk.

It is equally important to be clear about what remains stable after 1 January 2027:

• VAT rates (20 %, 10 %, 5.5 %, 2.1 %) remain rigorously unchanged.
• The franchise en base thresholds as set by the 2024 Finance Act (applicable since 2025) are not modified by the CIBS.
• Filing regimes do not change because of the CIBS, but the 2025 Finance Act abolishes the annual CA12 return and the simplified VAT scheme on the same date: the CA3 return is then quarterly if turnover, including taxable acquisitions, has exceeded neither €1,000,000 in the previous calendar year nor €1,100,000 in the current year, and monthly above that.
• Deductibility rules and pro-rata calculations are maintained identically.
• VAT ruling procedures (rescrit fiscal) remain valid; rulings obtained before 1 January 2027 retain their scope.
• The intra-EU VAT number (now referred to as "intra-European") does not change.

Real estate and property development. VAT rules on real estate transactions (deliveries of new buildings, input tax on construction works, option to charge VAT on rents) appear, alongside Titles I and II, in the chapter on immovable property and construction works of Title III of Book II of the CIBS (cross-sector special regimes). SCI companies (sociétés civiles immobilières) that are VAT-registered, and property developers, will need to master the new references for their files and notarial deeds.

Healthcare professions and medico-social establishments. VAT exemptions applicable to healthcare professions and the partial taxation rules for mixed establishments are carried over into the CIBS. Affected organisations must check that their internal procedures and recoverable VAT declarations cite the correct articles.

Digital and e-commerce. The OSS mini-window rules, VAT on electronic services and the intra-EU distance selling rules are reproduced in the CIBS, but not all of them on 1 January 2027: most of the special declaration and payment schemes of the OSS and IOSS one-stop shops (Articles 298 sexdecies F to H of the CGI) stay in the CGI until the regulatory texts that take them over come into force. For multi-country e-commerce operators, updating tax documentation is a priority.

Agriculture and forestry. The agricultural flat-rate VAT scheme and the option rules are codified in the sector-specific block. Farming operations and their advisers will need to update their references.

Associations. Associations that are partially VAT-registered — managing both taxable and exempt activities — must verify that their deduction coefficient and pro-rata documentation cite the new CIBS references.

Now — Priority actions

• Identify all internal documents citing CGI VAT articles (accounting instructions, tax procedures, internal notes, invoice templates, recurring contracts).
• Contact your ERP or invoicing software vendor to find out the update date for CIBS references.
• Brief accounting, finance and legal teams on the new numbering.
• Download the CGI/CIBS correspondence tables as soon as they are published on impots.gouv.fr or the BOFiP.

November and December 2026 — Compliance actions

• Update invoice and VAT schedule templates (legal mentions, exemption or reverse-charge references).
• Update internal tax instructions with the new CIBS references.
• Review long-term contracts containing references to CGI VAT articles.
• Verify that your ERP has been effectively updated before 1 January 2027.

Before 30 June 2028 — Supplementary actions

• Produce an internal CGI/CIBS correspondence table to facilitate audits covering the transitional period.
• Update any contracts not yet amended before the transitional period expires.
• Archive tax rulings obtained under the old numbering together with their CIBS equivalents.

The CIBS reform is a natural opportunity to conduct a preventive VAT audit — reviewing the rates applied, chargeability rules, deduction mechanisms, documented intra-EU transactions and tax options exercised.

For businesses with straightforward VAT and up-to-date procedures, a full audit is not necessarily warranted: a targeted review of documents and software will suffice.

For businesses with complex transactions (real estate, international activity, digital, SCI structures, mixed activities), the preventive audit offers a favourable cost-benefit profile. Identifying and correcting an anomaly before an audit is consistently less expensive than a reassessment — in time, in penalties and in reputational risk.

The CIBS reform is one of several major fiscal changes in 2026. It sits alongside other measures from the Finance Act, notably the exceptional surcharge on corporate tax (contribution exceptionnelle sur l'IS), which applies to businesses whose results exceed certain thresholds. A comprehensive view of your 2026 tax position is preferable to a measure-by-measure approach. For the general VAT framework, see also our guide VAT for SMEs: rates, returns and deductions.

There is no specific penalty, at this stage, attached to the use of old CGI references during the transitional period (until 30 June 2028). Throughout that period, CGI references in invoices, contracts and administrative acts are read as references to the CIBS articles that take them over.

After 30 June 2028, however, the use of obsolete CGI references in formal tax documents (invoices, returns, correspondence with the tax authority) could generate:

• Difficulties during a tax audit if the auditor cannot locate the CGI article cited in the company's documentation.
• Contractual ambiguity if a tax clause cites a CGI article whose content has been reformulated in the CIBS.
• A risk of being found in breach of the documentary obligation in certain cases.

The transitional period is generous. It should not become a pretext for indefinitely deferring documentary compliance.