The French Tax Authorities have recently introduced a series of changes to the previous TVS (Taxe sur les véhicules de société), which was replaced by two separate taxes in 2023: The annual CO2 tax, and the annual car age tax. This year, further adjustments have been made to these taxes, which will remain in effect until 2027.

What does this vehicle reform consist of? 

The main objective of these reforms is to encourage companies to adopt environmentally friendly vehicles in France. These measures are in line with the objectives outlined in Agenda 2030 for Sustainable Development. 

As part of these changes, the annual CO2 tax will gradually increase through 2027. The tax will be based on three citeria: the Worldwide Harmonised Light Vehicles Test Procedures (WLTP), the New European Driving Cycle (NEDC) and the date of first use of the vehicle.    

Additionally, thedefinition of taxable vehicles has been updated. Vehicles involved in transporting goods and passengers will now fall under the N1 category, and only vehicles with at least three rows of seats will be classified as passenger vehicles.

Deductions and VAT filing and reporting 

Hybrid vehicles are no longer exempt from the annual CO₂ tax, maintaining only some allowances provided that the CO₂ emissions do not exceed 250 g/km.   

The taxation period for both taxes is annual, and the filing method depends on the taxpayer’s VAT system:

  • Normal VAT regime: taxes must be declared using Form 3310A, attached to the VAT return due in January.
  • Not subject to VAT: the taxpayer must submit the declaration using Form 3310A by January 26th each year
  • Simplified VAT regime: taxes must be reported on F0rm 3517 for the relevant fiscal year, with a deadline of May 3rd for companies whose fiscal year matches the calendar year, or within three months after the fiscal year-end for others.

Finally, companies located in France are required to keep an annual record of all vehicles assigned to their activity during the fiscal year. In addition, the report will include, among other things, technical parameters, date of registration, assignment conditions and assignment periods. 

The fight against climate change is leading some States to create new taxes to reduce emissions. Therefore, if you wish to comply with these tax obligations in France, do not hesitate to contact Auxadi! 

Can Auxadi help?

Auxadi can become your ideal partner. We offer a one stop shop value added outsourcing services in the areas of accounting and reporting, tax compliance, payroll management and representation services, among others.

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All information contained in this publication is up to date on 2024. This content has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this chart without obtaining specific professional advice.No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this content, and, to the extent permitted by law, AUXADI does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this chart or for any decision based on it.