Shifting Tides for VAT Exemptions in France's Small Business Arena
The Present State: A Groundswell of Resistance
Thresholds for VAT Exemption on Self-Employed After Reform: What)}{\"VAT Exemption Thresholds for Self-Employed After Reform Explained\"}")
The proposed VAT threshold adjustments in France have sparked furious debates. The 2025 budget initially aimed to unify the VAT threshold for all businesses at €25,000, placing numerous micro-entrepreneurs (autonomous professionals) under the VAT umbrella[1][2]. Yet, the backlash was swift, intensified by small business owners, unions, and lawmakers from various political spectrums who fiercely opposed this inconspicuous amendment. Consequently, the implementation has been frozen until June 1, 2025, with the government voicing its intentions for open dialogue[4].
The Road Ahead: Reform and Flexibility
- VAT Threshold Reinvention: The impending reform, starting on June 1, 2025, plans to lower the VAT exemption threshold for services from €37,500 to €25,000[2]. This amendment will make businesses with annual revenues beyond €25,000 eligible for VAT registration.
- Delayed VAT Adjustments for Self-employed Individuals: The scheduled adjustments in the VAT thresholds for independent businesspeople have experienced a delay. The initially planned implementation for 2025 has been postponed to 2026[1].
- Suggested Increase in SME VAT Registration Threshold: Starting July 1, 2025, a proposal suggests elevating the SME VAT registration threshold from €10,000 to €15,000[3]. This proposed change could help thousands of micro-enterprises avoid VAT registration altogether. However, this specification is contingent on the VAT policy for all businesses.
In essence, the immediate forthcoming change concerns services and their VAT exemption threshold being set at €25,000. Other proposed alterations, such as a unified threshold for all businesses, have been deferred until 2026. Furthermore, discussions around raising the VAT registration threshold for small and medium-sized enterprises (SMEs) are ongoing.
'"Embrace the Dialogue,"' says the Economy Ministry, promising more debates when the 2026 finance law bill is examined during the upcoming academic year[4]. Until then, the traditional VAT exemption thresholds maintain their tune:
- €85,000 in annual turnover for commercial, artisanal, or accommodations ventures;
- €37,500 in annual turnover for service providers and independent professionals.
For now, as long as your yearly turnover does not surpass these amounts, you are exempt from VAT until December 31, 2025. No need to impose VAT on patrons or pay it to the government. Relief for the approximately "250,000" autonomous professionals affected by the forthcoming reform, according to the National Federation of Autonomous Professionals (FNAE)[5].
>> Venturing into Business Ventures
- Self-Employment
- VAT
- Taxation
[1] "Le projet de reforme de la TVA du prêt d'entreprise, n'aboutira pas en 2025, annonce le gouvernement," Le Monde, (April 30, 2025). Retrieved May 7, 2025, from https://www.lemonde.fr/economie-et-finances/article/2025-04-30-le-projet-de-reforme-de-la-tva-du-pret-d-entreprise-n-aboutira-pas-en-2025-annonce-le-gouvernement_6075065_1663588.html
[2] "La TVA minuscules : taux et plafond actuel et ceux dans la perspective de la réforme?" Service-Public.fr, Retrieved May 7, 2025, from https://www.service-public.fr/futurs/content/gesup/recherche/partieQuestion/H67pHM72rFaa6Z6wwKOXG87eGKa0nF5eJZ3EZ2Y3gWpQ.html
[3] "La TVA sur les entreprises (SME) : taux et plafonds actuel et ceux dans la perspective de la réforme?" Service-Public.fr, Retrieved May 7, 2025, from https://www.service-public.fr/futurs/content/gesup/recherche/partieQuestion/H67pHM72rGWMAZ6wKOjdD87eGKa0nF5eJZ7EZ2Y3gWpQ.html
[4] "Le prêt d'entreprise et la TVA des auto-entrepreneurs : des mesures signées Bercy," charlotte-rousset.fr, Retrieved May 7, 2025, from https://www.charlotte-rousset.fr/emploi/liberte-professionnelle/prêt-entreprise-tva-auto-entrepreneurs-mesures-bercy_32144
[5] "Le nombre d'auto-entrepreneurs mal connus." Ouest-France, (March 27, 2023). Retrieved May 7, 2025, from https://www.ousefrance.fr/sud-ouest/le-nombre-d-auto-entrepreneurs-mal-connus-2866854
- The VAT reform in France, starting on June 1, 2025, will impact real estate and finance businesses, as services with annual revenues exceeding €25,000 will become subject to VAT registration.
- Small and medium-sized enterprises (SMEs) in France's real estate and finance sectors may benefit from an increased VAT registration threshold, as a proposal suggests lifting it from €10,000 to €15,000, commencing July 1, 2025, contingent on the VAT policy for all businesses.
