The French government has announced a progressive reduction of tax rates applicable to CVAE (Contribution sur la valeur ajoutée des entreprises). This abolition of the tax, applicable to all companies with an annual turnover of more than 500.000 euros, was planned for the 2024 tax year, but the government has decided to backtrack to offset the effects of inflation and the current global economic uncertainty.

Thus, it has included in the project of Loi de Finances for 2024 a progressive reduction in tax rates over the next four years, and their total elimination in 2027.

The starting point on this reform was the 50% reduction of tax rates for the 2023 fiscal year, and it will continue in 2024 with the elimination of the minimum contribution, which will benefit around 300.000 French companies, mostly SMEs. Consequently, more than half of the companies subject to this tax will be exonerated in the 2024fiscal year, without greatly affecting the tax collection, since it is the companies with the highest results that provide the bulk of the tax revenue from this tax. The CVAE reform will last for the next four years, during which the maximum tax rate will be reduced to 0,28 % on the taxable income obtained in 2024 to 0,19 % on the taxable income obtained in 2025, and 0,09 % on the taxable income obtained in 2026; to be finally abolished in 2027.

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All information contained in this publication is up to date on 2023. 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.