Holiday procedure in France: How does the VAT holiday settlement work?
France VAT Summer Holiday Procedure – 2026 Update
The French tax authorities continue to allow certain VAT-registered businesses filing monthly VAT returns under the standard regime (Régime Réel Normal) to use a simplified summer reporting procedure during the holiday period.
This administrative simplification is commonly referred to as the “holiday procedure” (congé payé TVA). It is designed to reduce the compliance burden during the summer months when many businesses and accounting departments operate with reduced staffing levels.
How the Holiday Procedure Works
Instead of calculating the exact VAT liability for the July reporting period, eligible taxpayers may submit a provisional VAT declaration based on a percentage of the VAT previously declared.
Generally, the VAT due for July is calculated as 80% of the VAT declared for the previous reporting period. The difference between the provisional amount and the actual VAT due is subsequently regularised in the following VAT return.
The exact adjustment is made when the next VAT return is submitted, ensuring that the total VAT ultimately reported reflects the taxpayer’s actual transactions.
VAT Returns and Transaction Reporting
The holiday procedure only affects the calculation of the VAT payment and declaration amount for the relevant summer period.
Businesses must continue to:
- Maintain complete VAT records;
- Process sales and purchase transactions normally;
- Retain supporting documentation;
- Comply with any electronic reporting obligations that may apply.
The procedure does not exempt businesses from their general VAT compliance obligations.
VAT Payment
VAT payments remain due according to the standard French VAT payment timetable.
Where VAT is paid by direct debit, the French tax authorities will collect the provisional amount based on the declaration submitted.
Where alternative payment arrangements are used, taxpayers should ensure that payment is made by the applicable statutory deadline to avoid penalties and interest.
Final Adjustment
Any difference between the provisional declaration and the actual VAT liability is corrected in the subsequent VAT return.
As a result:
- Businesses experiencing lower sales during the summer period may receive a VAT credit or reduced liability in the following declaration;
- Businesses experiencing higher sales may be required to pay additional VAT when the adjustment is made.
Key Considerations for 2026
Businesses registered for VAT in France should:
- Verify whether they are eligible to apply the summer holiday procedure;
- Ensure that provisional VAT calculations are prepared correctly;
- Monitor cash flow implications of advance VAT payments;
- Maintain accurate transaction records to support the subsequent adjustment;
- Review any changes to filing obligations communicated by the French tax authorities.
The French summer VAT procedure remains an administrative simplification rather than a permanent reduction in VAT liability. Any provisional payment made during the holiday period is ultimately reconciled through the taxpayer’s regular VAT reporting process.
Iga Turniak
