The French government’s 2027 Finance Bill, tabled on 1 October 2026, includes several VAT measures. For now, these are only proposals, and Parliament still has to debate and vote on them.
TV services: reduced 10% rate to go
The Bill proposes scrapping the 10% rate that currently applies to TV services. The aim is to simplify the treatment of bundled offers, which increasingly combine TV with on-demand content. On-demand content already falls under the standard 20% rate as an electronically supplied service. The whole package would therefore be taxed at 20%.
Company cars: tightening up the 2025 ruling
As a rule, French businesses cannot recover VAT on passenger cars. However, a tax ruling of 30 April 2025 opened a door. Where a business makes a car available to an employee in return for consideration, such as a financial contribution from the employee, it is supplying a service subject to VAT. It then charges VAT on what the employee pays and can, under certain conditions, recover the VAT on the car.
The problem arises when the employee pays very little: the business charges little VAT but recovers a lot. The Bill aims to fix this imbalance. Where the employee pays less than the open market value of the service, VAT would be calculated on that open market value, meaning what an employee would pay on arm’s length terms or, failing that, what it costs the business to provide the car.
Tax-free shopping: a more secure scheme
Finally, the Bill adapts and secures the VAT refund scheme for travellers and tax refund operators, as part of the wider move towards digital procedures.
