Taxes on the Allocation of Passenger Vehicles (Formerly TVS)

Verified on March 21, 2025 – Directorate of Legal and Administrative Information (Prime Minister)

Passenger vehicles are subject to two taxes on their allocation for economic purposes: the “annual CO2 emissions tax” and the “annual air pollutant emissions tax” (which have replaced the former TVS). Sole proprietorships are exempt from these taxes. Below, we provide the necessary information.

A dedicated information sheet on the tax for the allocation of heavy goods transport vehicles (formerly the axle tax) is also available.

Which Companies Are Subject to Taxation?

General Information

A tax is due whenever a vehicle is allocated for economic purposes within a taxable territory.

A vehicle is considered allocated for economic purposes within the taxable territory when:

• It is authorized to operate within the taxable territory
• And it is linked to a company’s economic activity

Note:
The tax amount is proportional to the period during which both of these conditions are met.

Taxable Territories

The tax on vehicle allocation for economic purposes applies in the following territories:

• Metropolitan France
• Guadeloupe
• Martinique
• French Guiana
• Réunion
• Mayotte

Condition 1 taxes: Authorization for the Vehicle to Operate Within the Taxable Territory

All vehicles permitted to use public roads are considered authorized to operate within the taxable territory, regardless of whether:

• They are registered in France or not
• The authorization is temporary or permanent

Thus, the following vehicles are not taxable:

• Those belonging to a category or subcategory exempt from the requirement to hold a registration certificate (even if they are allowed on the road under specific conditions)
• Vehicles without a valid registration certificate or those with a suspended registration certificate
• Vehicles held by a used vehicle center and covered by a destruction certificate
• Damaged vehicles that are banned from circulation (however, taxation resumes once authorization to operate is reinstated)

Exceptions:
Some vehicles are not taxable, even if they are formally authorized to operate, including:

• Vehicles immobilized or impounded at the request of public authorities
• Vehicles authorized to operate exclusively for the purposes of their construction, sale, repair, or technical inspection (only applies to vehicles with a provisional registration certificate “WW” or “W garage” or those designated as “demonstration vehicles”)

Condition 2 taxes: Link to an Economic Activity in France

General Information

A vehicle is considered linked to a company’s economic activity if it meets any of the following three conditions:

1. It is owned by a company and registered in France
2. A company covers professional expenses related to the vehicle’s use in France
3. The vehicle operates in France for the company’s economic activities

Any company that owns a vehicle, pays for its professional expenses, or benefits from its operation is subject to tax obligations, including declarations and payments.

Case 1: Vehicle Owned by a Company and Registered in France

A vehicle registered in France and owned by a company is automatically linked to an economic activity.

A company owns a vehicle if:

• It is the legal owner, provided the vehicle is not leased out on a long-term rental basis
• It leases the vehicle on a long-term basis (without subleasing it)

Note:
Anyone subject to Value Added Tax (VAT) is considered a company for tax purposes.

Case 2: Vehicle Used for Work-Related Expenses in France

A vehicle is considered part of a company’s economic activity if:

• A company partially or fully covers costs related to its acquisition, leasing, operation, or maintenance (e.g., mileage reimbursements, lump-sum allowances)
• The vehicle is used in France for work-related travel (by employees, executives, or similar personnel)

Note:
Commutes between home and work are not taxable under this rule.

Case 3: Vehicle Operating in France for a Business Activity

A vehicle circulating in France for the needs of a business activity is also linked to an economic activity.

This applies to vehicles that:

• Are not registered in France but are used by companies in France (even if the company itself is not based in France)
• Are not owned by companies but are used for a company’s activities for a certain period (e.g., a vehicle lent for free by a non-VAT entity)

Which Vehicles Are Subject to These Taxes?

Affected Vehicles

The two taxes apply to the following vehicles:

• Category M1 vehicles (passenger cars) with “VP” (passenger vehicle) on their registration certificate, seating up to 8 people
• Category N1 vehicles (light commercial vehicles under 3.5 tons that can transport both goods and passengers), including:
  • Vans with at least 3 rows of seats
  • Pick-up trucks with at least 5 seats

Note:
Pick-up trucks used exclusively at ski resorts or for ski lift operations are exempt.

Exempt Vehicles

The following vehicles are exempt from both the annual CO2 and pollutant taxes:

• Vehicles used by sole proprietors
• Vehicles belonging to nonprofit organizations
• Vehicles used for:
  • Public transportation (taxis, chauffeur-driven cars, etc.)
  • Agricultural or forestry activities
  • Driving instruction
  • Competitive sports

Mixed-use vehicles qualify for a proportional tax reduction based on the time they are used for tax-exempt purposes.

Additional exemptions apply to vehicles that are:

• Wheelchair-accessible or adapted for disabled drivers
• Fully powered by hydrogen, electricity, or a combination of both
• Used for rental services (exemption applies only to the rental company)
• Temporarily provided to a customer while their vehicle is being repaired (exemption applies only to the owner providing the loaner vehicle)
• Rented for very short periods (less than 30 consecutive days or one month per calendar year)

How to Calculate the CO2 and Pollutant Tax Amounts

General Rule

The annual tax amount per vehicle is calculated as follows:

• Annual proportion of the vehicle’s use for economic activity
• Applicable annual tax rate based on the vehicle’s characteristics

The final amount is rounded to the nearest euro.

Proportion of Annual Use

The proportion of annual use is determined by:

\frac{\text{Number of days the vehicle is used for economic purposes}}{\text{Total days in the year (365 or 366)}

Example:
If a vehicle is used for business purposes for 219 days in a year, the proportion is:

219365=60%365219​=60%

In most cases, the proportion is 100%, except in cases of:

• Acquisition or sale of the vehicle during the year
• Temporary bans or impoundment