Newsletter March 2025

Declaration of property occupancy: a new paper form

Since 2023, all property owners—whether individuals or businesses—have been required to declare the occupancy status of their residential properties through the online service “Gérer mes biens immobiliers” on the French tax website (impots.gouv.fr).

This requirement helps the tax administration determine the applicability of the housing tax on second homes or the tax on vacant properties.

While the tax authorities prioritize digital declarations via the online portal, a paper form (No. 1208-OD-SD) is now available on impots.gouv.fr for owners without internet access. This form must be submitted to the local public finance center.

Coverage of employee transportation costs

Good news for employees using public transport or public bike rental services for their commute: employer contributions will remain exempt from income tax and social security contributions up to 75% of the subscription cost in 2025.

Employers are required to cover at least 50% of their employees’ public transport or public bike rental subscription costs. This contribution is tax- and social security-exempt. However, to support purchasing power and encourage the use of public transport, the exemption has been increased to 75% of the subscription cost. Initially planned for 2022–2024, this measure has been extended under the 2025 Finance Law.

Reduced VAT rates on renovation work: end of the simplified certificate

Administrative procedures to benefit from reduced VAT rates on renovation work are being simplified! Construction professionals are no longer required to have the simplified certificate (cerfa 1301-SD) filled out. Instead, a simple mention on the invoice or estimate is now sufficient.

Since the tax authorities have not yet published the exact wording required, the French Building Federation has suggested the following temporary mention:

« En qualité de preneur de la prestation, j’atteste que les travaux réalisés se rapportent à des locaux à usage d’habitation achevés depuis plus de deux ans et respectent les conditions prévues par les articles 279-0 bis et 278-0 bis A du code général des impôts, et notamment que les travaux effectués sur une période de deux ans au plus n’ont ni concouru à la production d’un immeuble neuf au sens du 2° du 2 du I de l’article 257 du code général des impôts, ni même conduit à augmenter la surface de plancher des locaux existants de plus de 10 %.»

Cash register software: certification by an accredited body becomes mandatory

The 2025 Finance Law ends self-certification for cash register software. Since February 16, 2025, software providers can no longer certify their tools’ compliance with tax regulations. Lawmakers argue that self-certification facilitated the inclusion of fraudulent features allowing transaction concealment and tax evasion.

From now on, certification by an accredited body is mandatory to ensure data integrity, security, storage, and archiving. While this measure aims to strengthen the fight against VAT fraud, its impact on small businesses is raising concerns.

Reform of employer contribution relief: what changes in 2025

The 2025 Social Security Financing Law (LFSS) introduces a gradual reform of employer social contribution relief. Starting January 1, 2025, the eligibility thresholds for reduced rates have been lowered:

• Employer health insurance contribution: the ceiling is reduced from 2.5 to 2.25 times the minimum wage (SMIC).
• Employer family allowance contribution: the ceiling is reduced from 3.5 to 3.3 times the SMIC.

In 2026, a complete overhaul is planned: reduced rates will be abolished, and a single, gradually decreasing general reduction will apply up to 3 times the SMIC. This measure aims to simplify the exemption system and encourage wage increases.

Additionally, “value-sharing bonuses” (Prime de Partage de la Valeur – formerly called Prime Macron) paid since October 10, 2024, will now be included in the calculation base for general employer contribution reductions.

These changes will significantly impact payroll management and social charges, requiring businesses to adapt their compensation practices and comply with the new legal provisions.

Company cars: increased benefit-in-kind valuation for vehicles provided from February 1, 2025

The company car benefit-in-kind corresponds to the private use of a company-provided vehicle, which is considered part of an employee’s remuneration and subject to social security contributions. It is assessed either as a flat rate (a percentage of the purchase or rental cost) or based on actual costs, affecting the calculation of social charges.

A decree issued on February 25, 2025, has modified the valuation of the benefit-in-kind for vehicles made available to employees from February 1, 2025. The flat-rate assessment is adjusted as follows:

• Vehicle purchased less than 5 years ago:
• Without fuel: from 9% to 15% of the gross purchase price.
• With employer-covered fuel: from 12% to 20% of the gross purchase price.
• Vehicle purchased more than 5 years ago:
• Without fuel: from 6% to 10% of the gross purchase price.
• With employer-covered fuel: from 9% to 15% of the gross purchase price.
• Leased vehicle:
• Without fuel: from 30% to 50% of the total annual rental cost.
• With employer-covered fuel: from 40% to 67% of the total annual rental cost.

This change significantly increases the taxable value of company-provided vehicles, leading to higher social charges for both employers and employees.