Business Taxation: What Is the Simplified Real Tax Regime?

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In France, a company’s tax regime depends largely on its revenue and type of activity. One of the available regimes is the Simplified Real Tax Regime (Régime Réel Simplifié, or RSI). What are the eligibility criteria? What obligations does it involve? Here’s what you need to know.

1. Simplified vs. Standard Real Tax Regime: What’s the Difference?

Both the simplified and standard real tax regimes apply to business profits and VAT (Value-Added Tax). The main distinction lies in the complexity of the accounting and reporting requirements.

The Simplified Real Regime offers businesses lighter accounting and tax declaration duties compared to the Standard Real Regime.

2. Who Can Use the Simplified Real Tax Regime?

Automatically Applicable to Some Businesses

This regime is automatically applied to businesses subject to income tax or corporate tax if their annual revenue falls within the following brackets:

  • €188,700 to €840,000 for commercial or accommodation-related activities.

  • €77,700 to €254,000 for service-based activities.

These thresholds apply for tax years 2023, 2024, and 2025.

Optional for Micro-Enterprises

Businesses under the micro-enterprise regime may opt in to the simplified real regime. This choice lasts one year and renews automatically unless otherwise stated.

Thanks to the 2022 Finance Law, entrepreneurs now have extended deadlines to choose their preferred tax regime.

3. What If Revenue Falls Outside These Thresholds?

  • If revenue is below the limits, the micro-enterprise regime is an option.

  • If revenue exceeds the thresholds, the Standard Real Regime applies.

  • Even if your business qualifies by default for the simplified regime, you may voluntarily opt into the standard one.

4. Obligations Under the Simplified Real Tax Regime

Businesses must maintain traditional accounting records, including a balance sheet, income statement, and annexes. However, some administrative obligations are streamlined:

  • The journal only records actual cash flows (received income and paid expenses).

  • Receivables and payables are reported at the fiscal year-end.

  • A simplified balance sheet must be submitted to the tax authority.

Tax Declarations

Companies must submit simplified financial statements using:

  • Form 2031 (for income tax) or

  • Form 2065 (for corporate tax),
    including annexes like tables 2033 A and following.

5. What Happens if You Exceed Revenue Limits?

If a business surpasses the thresholds (€840,000 or €254,000), it can remain under the simplified regime for the first year after exceeding the limit—only if it’s the first occurrence.

If the business exceeds the limits two years in a row, the Standard Real Regime becomes mandatory starting the following year.

6. How Does the Simplified Real Tax Regime Work with VAT?

Eligible businesses under the simplified tax regime can also benefit from a simplified VAT system, provided they meet these criteria:

  • Annual excluding-tax revenue between:

    • €36,800 and €254,000 for services and liberal professions.

    • €91,900 and €840,000 for commercial and accommodation activities.

  • Annual VAT liability must not exceed €15,000.

VAT Payment and Reporting

  • Two installments are paid in July and December.

  • A single annual VAT declaration (Form 3517 CA12) is submitted—usually in May of the following year—summarizing all taxable transactions from the previous year.

This simplifies the reporting process, as businesses only need to file one VAT return per year.

Additional Tip

Businesses can combine regimes: for example, they may be under the Simplified Real Regime for profits and Standard VAT Regime—a configuration referred to as the “Mini-Real” Regime.