Companies that own or use passenger cars in France are subject to specific taxation. Since the 2022 reform, the former company vehicle tax (TVS) has been replaced by two annual taxes: one based on CO₂ emissions, the other on air pollutant emissions.
For a European company that sends staff to France, or leases or owns vehicles there, these taxes are often overlooked. This article sets out how they work, the information to gather vehicle by vehicle and the points to watch.
From the TVS to two annual taxes
The company vehicle tax (TVS) disappeared with the 2022 reform. It was replaced by two separate taxes, which can both apply to the same taxable vehicle. The logic has changed clearly: there is no longer a single scale, but two environmental criteria.
Two taxes, two criteria
- a tax based on the vehicle’s CO₂ emissions;
- a tax based on air pollutant emissions, which depends notably on the fuel and the age of the vehicle.
These taxes target passenger cars held or used by the company. The calculation rules (scales, allowances, pro rata rules) are technical and change over time: they must be checked for each tax year.
Information to gather for each vehicle
To file correctly, you need each vehicle’s characteristics, the period during which the company uses it and any exemptions that may apply.
| Information | Why it matters |
|---|---|
| CO₂ emissions | They form the basis of the first tax. |
| Fuel | It plays a part in the air pollutant tax. |
| Date of first registration | It determines the age of the vehicle, hence the applicable rate. |
| Period of use | Only the period of use by the company is taken into account. |
| Possible exemptions | Certain uses or types of vehicle may qualify, subject to conditions. |
A changing fleet: tracking entries and exits
A fleet that changes during the year requires rigorous tracking of entries and exits: a vehicle acquired or leased mid-year, sold, replaced, or temporarily used by a seconded employee. Each movement changes the taxable period.
Common pitfalls
Most errors come from the data rather than the calculation. A few situations deserve particular attention before filing.
- Incomplete vehicle data: missing registration dates or emission figures make it impossible to apply the right scale.
- Ignoring short periods of use: a vehicle used for only part of the year should be taxed for that period only, which requires reliable records.
- Forgetting leased or seconded-staff vehicles: use by the company can trigger the taxes even where it is not the owner.
- Overlooking exemptions: where an exemption may apply, the supporting evidence needs to be kept and be ready to produce.
A simple fleet register, updated whenever a vehicle enters or leaves, avoids most of these problems and makes each annual filing much faster.
One tax among other local and direct taxes
These taxes come on top of other levies a foreign company may face once it sets up in France: CFE, property tax and payroll tax. For the overall picture, read our article on local taxes for an establishment in France.
If you later find that a tax was miscalculated, a tax relief claim may be possible within the applicable time limits.
How Hanoutax can help
Hanoutax acts as your French VAT agent (mandataire fiscal). We list your fleet, identify the taxable vehicles, calculate both taxes and file the returns.
The service is described on our Annual company vehicle taxes page. To discuss your situation, get in touch.
FAQ
Does the TVS still exist?
No. Since the 2022 reform, the former company vehicle tax has been replaced by two annual taxes: one based on CO₂ emissions and the other on air pollutant emissions.
Which vehicles are affected?
Passenger cars held or used by the company in France. Certain uses or types of vehicle may be exempt, subject to conditions. Each vehicle should be assessed individually rather than reasoning on the fleet as a whole.
Is a vehicle used for only a few months taxed?
The period of use by the company is taken into account: a vehicle held or used for part of the year is not taxed like one present all year round. That is why entries and exits must be tracked precisely.
Do I have to file if I lease vehicles in France?
It depends on the situation: the tax can cover vehicles used by the company, not only those it owns. The contracts and the actual use should be reviewed before reaching a conclusion.
Can I get help with these filings?
Yes. An agent can list the fleet, identify taxable vehicles, calculate both taxes and file the returns under a written mandate, the company remaining liable for the tax.
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Related reading
Informational content, not legal advice. The rules that apply depend on your situation.
