Corporate Taxation in France: What Is the Simplified Real Tax Regime?

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The tax system for businesses in France varies based on their revenue and type of activity. One of the available tax regimes is the Simplified Real Tax Regime (RSI). This article outlines who qualifies for this regime, how it works, and the obligations it entails.

How Does the Simplified Real Regime Differ from the Standard Real Regime?

Both the Simplified Real Regime (RSI) and the Standard Real Regime (RN) apply to corporate profits and VAT. The main distinction lies in the reporting and accounting requirements: the simplified regime offers lighter administrative duties, making it easier to manage for eligible businesses.

Who Can Benefit from the Simplified Real Regime?

Automatically Applied Based on Revenue

The RSI applies automatically to companies liable for income tax or corporation tax with an annual revenue falling within the following ranges:

  • Between €188,700 and €840,000 (excluding VAT) for commercial activities and lodging services,

  • Between €77,700 and €254,000 (excluding VAT) for service providers.

These thresholds are valid for the years 2023 to 2025.

Optional for Micro-Enterprises

Businesses eligible for the micro-enterprise regime may choose to opt for the simplified real regime instead. This election lasts for one year and is automatically renewed unless a change is made.

A recent reform under the 2022 Finance Act also extended the deadlines for choosing a preferred tax regime, offering greater flexibility for entrepreneurs.

What Happens Outside These Revenue Thresholds?

  • Below the thresholds: Businesses may choose the micro-enterprise regime.

  • Above the thresholds: They are required to adopt the standard real regime.

  • If already under the RSI by default, companies may also opt to switch to the standard real regime.

What Are the Obligations Under the Simplified Real Regime?

Companies under this regime must keep standard financial records, including a balance sheet, profit and loss statement, and notes to the accounts. However, specific simplifications apply:

  • The journal only needs to record actual cash inflows and outflows,

  • Receivables and debts are recorded only at the fiscal year-end,

  • A simplified balance sheet is accepted by tax authorities.

For tax filings:

  • Companies must submit a simplified set of accounting tables (2033 A and following),

  • This is filed with either form 2031 (for income tax) or form 2065 (for corporate tax), depending on the business structure.

What if Revenue Exceeds the Thresholds?

If a company exceeds the RSI thresholds—€840,000 or €254,000—it can retain the simplified regime for one additional year, provided it’s the first time the thresholds are exceeded.

However, if thresholds are surpassed for two consecutive years, the business must switch to the standard real regimestarting the year following the second breach.

How Does VAT Work Under the Simplified Regime?

Businesses under the RSI also benefit from simplified VAT rules, as long as they meet the following conditions:

  • Annual revenue (excluding VAT) between €36,800 and €254,000 for service providers and liberal professions,

  • Annual revenue between €91,900 and €840,000 for commerce and accommodation businesses,

  • VAT due does not exceed €15,000 annually.

Under this VAT scheme:

  • Businesses pay two installments per year (in July and December),

  • They file a single annual VAT return (Form 3517 CA12) by May of the following year, summarizing taxable transactions and determining future payments.

Note:
It’s also possible to be under the simplified profit tax regime while opting for the standard VAT regime. This hybrid arrangement is known as the “mini-real” regime.