In France, as is the case elsewhere across Europe, exemption limits are in place that exclude small businesses from the need to collect or pay VAT on sales and services.
The exemption limits that apply in 2025 differ by the business activity:
For service and trade-based activities the current turnover limit is €37,500.
For the sales of tangible goods, sales for consumption on the premises or the provision of accommodation services the limit is €85,000.
It is possible to temporarily exceed these limits for two consecutive years (période de tolérance), except in the first year of activity.
There are slightly different rates for authors, lawyers and artists.
In December 2024, the government passed a law reducing the VAT exemption limit for all activities to €25,000 annual turnover. The new limit was to apply wef 1st March 2025.
The result of that would have been that many thousands of small businesses would be obliged to charge VAT (TVA) on their products and services, potentially putting their business at risk. There would also be significant new administrative and accounting obligations.
Nevertheless, it would enable owners to recover VAT on purchases, and for those selling business to business, it might have no impact on sales.
However, such was the outcry from small business associations that the government suspended the introduction of the new limit until 1st June 2025, to allow for consultation with all sides.
The outcome of that consultation became clear this week, when the Minister of the Economy, Éric Lombard, announced a further suspension of the measure to the beginning of 2026.
“We note that the proposed reform does not have unanimous support, either for or against," said the the minister.
As a result, there would be further consultations, when the measure would be considered again as part of the budget process for 2026.
UPDATE: In June 2025 the French Parliament voted unanimously not to change the exemption threshold.
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