France – CIBS and CGI : practical VAT impacts for businesses in France

Reminder on the CIBS (Code of Taxes on Goods and Services)

The CIBS (Code of Taxes on Goods and Services) is a new French tax code designed to consolidate all taxes on goods and services.

Launched in 2021, the recodification has been carried out in stages: excise duties, mobility and industry (2022), communications, culture and digital services (2024), followed by the creation of the regulatory section (2025) and the integration of ancillary taxes on electricity (2026).

In this context, Ordinance No. 2025-1247 of 17 December 2025 incorporates and recodifies VAT within the CIBS.

The entry into force is set for 1 September 2026, with transitional measures requiring adjustments by professionals until the end of 2027. In particular, references to the former articles of the French General Tax Code on invoices and other commercial documents will also be permitted until the end of 2027.

The main VAT changes introduced by the CIBS:

The transition from the French General Tax Code (CGI) to the CIBS has several implications:

• A legislative restructuring of VAT
• The codification of case-law principles and concepts
• Clarifications regarding the right to deduct VAT
• Other VAT-related measures

Legislative restructuring of VAT

This ordinance incorporates VAT rules into Book II of the CIBS while introducing a structural and organizational change.

Under this new code, the legislator has chosen to present, on the one hand, the general VAT regime and, on the other hand, the 18 special VAT regimes as coherent blocks, rather than spreading the derogatory provisions applicable to certain sectors of activity throughout the general regime.

Provisions relating to the right to deduct VAT will, however, be scattered throughout all chapters concerning VAT (Scope, Territoriality, etc.) rather than being the subject of dedicated chapters.

Moreover, although the overall volume has not increased, the legislator has chosen to multiply the number of articles in order to shorten their individual content.

In practice, it will now be necessary to refer to multiple articles of the CIBS to fully understand a legal concept, the VAT regime applicable to a transaction, or the specific VAT regime for a particular sector of activity.

Codification of case-law principles and concepts

The legislator has used this recodification to incorporate certain case-law notions and positions, including:

• The essential criteria for characterizing a transaction carried out for consideration and an economic activity, as well as the concept of a direct link between the supply of goods or provision of services and the consideration received
• The principle of general expenses in relation to the right to deduct VAT
• Situations requiring the adjustment of VAT or the right to deduct, particularly in cases of irregular invoicing

VAT Terminology Changes

The text also introduces terminology changes to reflect recent developments:

• Transactions previously called “intra-Community” are now referred to as “intra-European” transactions. Examples: intra-Community supplies/acquisitions become intra-European supplies/acquisitions.
• Introduction of the concepts of “inputs,” “mixed inputs,” and “downstream transactions” for the purposes of the VAT deduction right.
• “Distinct sectors of activity” are renamed “autonomous sectors.”
• Explicit distinction between “functional exemptions” (allowing the right to deduct) and “derogatory exemptions” (not allowing the right to deduct).
• Clarification and naming of derogatory rates (intermediate, reduced, very reduced, and zero rates).
• Replacement of so-called “suspensive” regimes with “exemption” regimes.
• Specific identification of regimes applicable to small actors (small buyers and small sellers) within Europe.
• Introduction into law of definitions previously derived from doctrine or case law (opaque or transparent intermediation, work for hire, off-market transactions, closely related transactions).
• Replacement of the term “travel agencies” with “travel operators.”

Practical VAT Impacts and Consequences for Businesses

Updating Invoice References

As a reminder, when an exemption, reverse charge, or specific regime applies, it is mandatory to indicate on the invoice the reference to the applicable provision of the VAT Directive or national legislation (currently the French General Tax Code).

By the end of 2027, businesses that previously cited articles of the French General Tax Code to justify an exemption, reverse charge, or application of a specific regime will need to update their references:

• Either to refer to the European VAT Directive
• Or to refer to the new CIBS

The table of correspondences between the old and new articles is available here.

New CIBS and Impact on Rulings and Ongoing Legislative Developments

Administrative comments and rulings based on provisions of the French General Tax Code (CGI) remain fully binding until the publication of guidance in early 2026, which will specify the applicable procedures.

The ordinance transposes the provisions of Council Directives (EU) 2025/516 of 11 March 2025 and 2025/1539 of 18 July 2025 (VAT VIDA – VAT in the Digital Age reform), aimed at rationalizing VAT collection. These measures will be implemented gradually from 1 January 2027 to 1 July 2030.

It is specified that the recodification within the CIBS has no impact on the generalization of electronic invoicing, which will take effect on 1 September 2026.

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