France Sees Tax Revenue Increase in 2025, Eyes E-Invoicing Mandate

Tax revenues collected by the French General Directorate of Public Finances (DGFIP) increased from €570 billion to €610 billion in 2025, marking a 7% rise. This growth outpaces France’s GDP increase of 2% for the same period. While Value Added Tax (VAT) remains relatively stagnant, gains in corporate tax (IS) and income tax (IR) are driving the overall increase.

Key Revenue Drivers

The increase in tax revenue is attributed to several factors:

• Corporate Tax (IS): Despite a gradual reduction in the corporate tax rate to 25%, revenues have increased due to strong corporate profits and the elimination of the Tax Credit for Competitiveness and Employment (CICE).
• Income Tax (IR): Revenues are boosted by increases in labor income, indexed to inflation, and capital gains.
• Exceptional Contribution on Large Company Profits: Introduced by François Bayrou, this measure generated an additional €7.5 billion in revenue.

Modern and Existing Tax Measures

A new “differential contribution” on high incomes, initially projected to yield €1.9 billion, generated only €400 million. Both the “exceptional contribution” and the “differential contribution” have been renewed for 2026.

Despite the increase, France’s overall tax burden as a percentage of GDP remains lower than the European average. However, the country distinguishes itself with high social security contributions and production taxes.

France’s E-Invoicing Mandate

France is likewise implementing a comprehensive e-invoicing mandate, overseen by the DGFIP. The mandate includes the following timeline:

• Receiving Electronic Invoices: Mandatory for all companies from September 1, 2026.
• Sending Electronic Invoices:
  • Large companies: Mandatory from September 1, 2026.
  • Medium-sized companies (ETI): Mandatory from September 1, 2026.
  • SMEs and micro-enterprises: Mandatory from September 1, 2027.
• E-Reporting Information Transmission:
  • Large companies: Mandatory from September 1, 2026.
  • Medium-sized companies (ETI): Mandatory from September 1, 2026.
  • SMEs and micro-enterprises: Mandatory from September 1, 2027.

The DGFIP has certified Partner Dematerialization Platforms (PA) to assist businesses with compliance. Basware is one such certified PA.

VAT Reporting for Non-Established EU Businesses

Businesses based in an EU Member State without a permanent establishment in France, but conducting VAT-taxable transactions there, are required to identify themselves, report these transactions, and pay VAT to the DGFIP. More information on VAT requirements can be found on the French tax authority website.

Resources

• French Tax Authority (VAT Information)
• French General Directorate of Public Finances (DGFIP)
• European Commission – France VAT e-Commerce One Stop Shop
• Basware – France e-Invoicing Mandate