Business Tax White Paper: the complete 2026 guide

Before examining each pillar, let us set the scene. Expense and mobility taxation rests on three foundations: VAT (20 % standard rate), the energy excise duty (formerly TICPE) and social security contributions on remuneration. On fuel, deductible VAT depends on the vehicle type: 80 % on petrol for a passenger car, 100 % for a light commercial vehicle, and 0 % on diesel for a private-use vehicle^[1]. It is the vehicle classification, not the price per litre, that opens or closes the right to deduction.

On the vehicle side, the former company vehicle tax (TVS) was replaced in 2023 by two separate annual taxes (a CO₂ tax and an air pollutant tax), which tighten every year through 2027^[2]. On the remuneration side, the benefit-in-kind valuation for company cars was tightened from 1 February 2025: flat-rate assessments rise from 9 % to 15 % of the purchase price for recent vehicles, and from 30 % to 50 % of the annual leasing cost^[3]. On the exemptions side, the sustainable mobility allowance (forfait mobilités durables) saw its exemption ceiling raised to €600 per employee per year from 1 January 2025^[4]. Four levers, four timetables: that is precisely why a unified approach is worth more than four separate files.

1. The energy excise duty (formerly TICPE). The domestic consumption tax on energy products (TICPE) has been renamed the energy excise duty. For road hauliers and taxis, part of this excise duty is refunded subject to conditions. For consumption from January 2025 onwards, refund claims are submitted to the DGFiP. Customs authorities no longer handle this process^[5]. The 2025 flat-rate figures are €29.20/hl for diesel, €31.39/hl for E5 premium unleaded, and €29.39/hl for E10^[5]. The recovery is real, but it does not happen automatically: it requires a precise reconciliation of fill-ups, mileage, and eligible activity. Full details in our guide to optimising TICPE excise duty recovery in 2025.

2. Recoverable fuel VAT. This is the least well-managed lever, because it depends on a technical rule that is rarely made explicit. Since 1 January 2022, VAT on petrol is deductible at 80 % for a passenger car and at 100 % for a light commercial vehicle. VAT on diesel remains non-deductible for a private vehicle (0 %) but fully recoverable at 100 % for a commercial vehicle^[1]. The distinction rests on the vehicle classification (passenger car or light commercial vehicle) as registered on the vehicle registration document. A fleet that does not break down its fill-ups by classification leaves VAT on the table every year. This is also the line item where integration pays off fastest: a fill-up categorised at the point of transaction, rather than entered manually at month-end, eliminates the allocation error.

3. The former company vehicle tax (ex-TVS): CO₂ and pollutant taxes. The old company vehicle tax was replaced by two annual taxes on passenger vehicles used for business purposes^[2]. The CO₂ tax follows a progressive scale by emissions bracket (WLTP method for recent vehicles), with an increase every year through 2027. The air pollutant tax is calculated by category: €0 for electric and hydrogen vehicles, €130 in 2026 for Euro 5 and 6 petrol and hybrid vehicles, and €650 for the most polluting vehicles^[2]. Electric and hydrogen vehicles are exempt from the CO₂ component. This is the most direct fiscal lever for fleet electrification. Note: since 1 January 2025, a 40 % reduction on emissions applies to vehicles running on E85 superethanol^[2]. The return must be filed online in January following the tax period.

4. The company car benefit-in-kind. When a business makes a vehicle available to an employee for private use, this constitutes a benefit-in-kind subject to social security contributions. The decree of 25 February 2025 raised the flat-rate valuations for vehicles made available from 1 February 2025 onwards: 15 % of the VAT-inclusive purchase price for a vehicle under 5 years old (10 % beyond that), compared with 9 % and 6 % previously, and 50 % of the total annual leasing cost, compared with 30 %^[3]. Electrification mitigates this tightening: a 70 % reduction applies to the flat-rate benefit-in-kind for fully electric vehicles, capped at €4,582 per year^[3]. On an electric vehicle purchased for €30,000 including VAT, the benefit-in-kind therefore falls to €810 per year, a gap that carries significant weight in any fleet renewal decision.

5. VAT on expenses and EV charging. Fuel is not the only source of recoverable VAT. Professional expenses (business meals, accommodation, tolls, public transport) each carry variable deduction rights, and charging an electric company vehicle also gives rise to a VAT deduction right, provided the charge is invoiced to the company. This is where expense report taxation meets mobility taxation: a structured, categorised expense report feeds directly into VAT recovery, whereas a paper receipt stuffed in an envelope too often ends in a missed deduction. The reconciliation happens at the point of transaction, not at the point of filing.

6. URSSAF exemptions on employee benefits. Several mobility-related and day-to-day employee benefits are exempt from social security contributions subject to strict conditions: the sustainable mobility allowance (€600/year in 2025, €900 combined with the mandatory public transport subscription contribution)^[4], meal vouchers (employer contribution exempt up to €7.26 per voucher in 2025, provided it represents 50 % to 60 % of the face value)^[6], and Works Council (CSE) gifts up to the applicable ceiling. These schemes are far from minor: they convert a personnel expense into a net benefit for the employee without increasing the employer's cost. But they require rigorous record-keeping. That is the non-negotiable condition for the exemption to hold during an audit.

Fragmented business taxation carries a double cost: in amounts not recovered and in management time. Three errors recur systematically. The first is misallocation: a passenger car fill-up coded as a light commercial vehicle fill-up, or vice versa, distorts both the deductible VAT and the amount subject to the former company vehicle tax. The second is missed recovery: an uncategorised expense report, an excise duty refund not claimed, an EV reduction not applied. These are open rights that go unexercised and accumulate silently across each financial year. The third is a filing delay: the former company vehicle tax must be declared in January, the excise duty refund claim follows its own timetable, and the benefit-in-kind is regularised through the monthly social declaration (DSN). Miss one deadline and a penalty replaces a recovery.

Integration is not a convenience, it is a recovery guarantee. A corporate payment card that categorises each transaction at the moment it occurs automatically feeds deductible VAT, excise duty reconciliation and former company vehicle tax reporting, without any manual re-entry. That is the approach Greenway advocates: a single fuel and mobility card connected to an expense management back office, where every line carries its tax classification. Recovery becomes a by-product of management, not an annual project. The full comparison between cards and mileage reimbursement is set out in our article fuel cards vs mileage reimbursement.

To turn business taxation into a manageable line item, six concrete checks are enough to avoid the most costly errors:

Business expense and mobility taxation is part of a continuous regulatory movement, and the timetable is tightening. The former company vehicle tax scales increase in annual steps through 2027: the air pollutant tax rises from €130 to €160 for Euro 5 and 6 petrol vehicles, and from €650 to €800 for the most polluting^[2]. Benefit-in-kind flat rates were raised in February 2025 and are not expected to be rolled back^[3]. And the digitalisation of filings (excise duty with the DGFiP, former company vehicle tax online, monthly social declaration (DSN) for benefit-in-kind) is turning each deadline into a structured data flow rather than a paper formality.

This tightening has a strategic consequence: taxation produces regulatory data, not just expenses. A business that manages its expenses and mobility within a single reference system already holds the raw material for its filings: deductible VAT, former company vehicle tax base, benefit-in-kind, URSSAF exemptions. Conversely, a business that manages each line item in a silo reconstructs that data every year through extensive spreadsheet work. This is exactly the same mechanism as for CSRD reporting, and it calls for the same response: integration before renormalisation.