VAT Threshold Delay for Autoentrepreneurs
- A controversial reform concerning the VAT exemption threshold for autoentrepreneurs in France has been postponed until the fall budgetary discussions.
- Minister Lombard stated that the government observed a lack of consensus regarding the proposed changes.
- Though, Hurel cautioned that "this is a suspension, not a suppression."
VAT Exemption Reform for Autoentrepreneurs in France Delayed Until Fall
A controversial reform concerning the VAT exemption threshold for autoentrepreneurs in France has been postponed until the fall budgetary discussions. The initial implementation, already suspended until June 1st, failed to garner unanimous support, according to Economy Minister Eric Lombard’s declaration in the National Assembly on Wednesday.
Minister Lombard stated that the government observed a lack of consensus regarding the proposed changes. Consequently, the decision was made to suspend the reform’s implementation and allow for further debate during the finance bill discussions for 2026, scheduled for the fall.
“Wisdom awarded,”
François Hurel, president of the Union of Autoentrepreneurs, told AFP.
Though, Hurel cautioned that “this is a suspension, not a suppression.”
Details of the Suspended VAT Reform
The reform, initially included in the current finance law, was slated to take effect on March 1st before its initial suspension. It proposed lowering the annual turnover threshold for VAT taxation to 25,000 euros, a notable decrease from the previous thresholds of 37,500 euros for services and 85,000 euros for commercial activities.This change would directly impact hundreds of thousands of microentrepreneurs.
Concerns and Future Considerations
The government intends to propose a more balanced reform that considers sectors facing intense competition, especially the building industry, according to Minister Lombard. This raises concerns for Mr. Hurel, who questions the basis for singling out the building sector, stating he has “never seen a single quantified demonstration” that autoentrepreneurs engage in unfair competition with traditional craftsmen.
Political Reactions
On the political front,members of the Republic party,who oppose tax increases,are advocating for a return to the previous VAT thresholds well before the fall discussions. Former Prime Minister Gabriel Attal celebrated this progress as a “first victory” and expressed support for a bill proposed by deputy Paul Midy aimed at ensuring tax stability for microentrepreneurs. The proposal is expected to be examined in early June during a parliamentary session.
stakeholder Perspectives
Marc Sanchez, Secretary General of the Syndicat des Independents and VSEs (SDI), welcomed the government’s decision to allow more time for debate, emphasizing that the initial decision in the 2025 budget “jeopardized a large number of traders, especially in small towns and rural areas.”
Specific Concerns Regarding the Building Sector
mr. Sanchez believes that the upcoming debates must address the unique challenges faced by building professionals, who he says are “confronted with competition that can be described as unfair” from microentrepreneurs. The SDI proposes lowering the VAT threshold to 25,000 euros specifically for building autoentrepreneurs while reverting to the previous thresholds for othre sectors.
Looking Ahead
SME Minister Véronique Louwagie is scheduled to convene parliamentarians from various political groups on Tuesday to discuss the preparation of the 2026 finance bill. Mr. Hurel anticipates that ”all parliamentarians go there with the firm intention to blow up the measure.”
Earlier in April, the Senate finance committee recommended a complete abandonment of the reform. Jean-Paul Husson, the general rapporteur for the budget in the senate, suggested that the reform “hardly hides her tax return objective with an increase in full year revenues estimated at around 800 million euros.”
Michel Picon, president of the employer institution U2P, argued for a more basic debate, advocating for a return to the previous VAT thresholds, “except the building” sector due to ”unbearable” unfair competition. He also suggested discussing limitations to the simplified microentreprise regime,possibly excluding microentrepreneurs whose activity is merely supplementary to other income.
Posted on April 30 at 8:13 p.m.
French VAT Reform for microentrepreneurs: Your Questions Answered
This article provides comprehensive answers to your questions about the recently suspended VAT reform in France, affecting microentrepreneurs.
What is the VAT Reform and Why Was it Suspended?
Q: What was the main objective of the proposed VAT reform for autoentrepreneurs?
A: The reform aimed to change the VAT (Value Added Tax) exemption thresholds for autoentrepreneurs, which are self-employed individuals enjoying a simplified tax regime. The reform, initially included in the finance law, proposed lowering the annual turnover threshold for VAT taxation.
Q: What were the proposed new VAT thresholds?
A: If implemented, the changes would have lowered the annual turnover threshold for VAT taxation to 25,000 euros.
Q: How did this compare to the previous VAT thresholds?
A: Previously, the thresholds were significantly higher: 37,500 euros for services and 85,000 euros for commercial activities. Reaching these limits triggered mandatory VAT registration and obligations.
Q: Why was the reform eventually suspended?
A: The government suspended the implementation of the reform due to a lack of consensus regarding the proposed changes, as stated by Economy Minister Eric Lombard. The suspension will allow for further debate and discussion during the 2026 finance bill discussions scheduled for the fall.
What Impact Would the Reform Have?
Q: Who would be most affected by the VAT threshold changes?
A: The reform would have directly impacted hundreds of thousands of microentrepreneurs. Essentially, more autoentrepreneurs would have been required to register for and pay VAT.
What are the Concerns and Future Plans?
Q: What are the main concerns surrounding the proposed reform?
A: A important concern is the potential for increased administrative burdens and costs for microentrepreneurs who would be required to manage VAT. There’s also a debate regarding the fairness of the proposal, especially concerning specific sectors.
Q: What does the government plan to do moving forward?
A: The government intends to propose a more balanced reform that considers sectors facing intense competition, particularly the building industry, according to Minister Lombard. They plan to use the upcoming finance bill discussions as a platform for this.
Q: What is the building sector concern and why is it being singled out?
A: Stakeholders like François Hurel and Marc Sanchez highlight concerns that building professionals face unfair competition due to microentrepreneurs.The government has hinted at addressing sector-specific issues. Though, François hurel has questioned singling out the building sector without providing any “quantified demonstration” to support it.
Political and Stakeholder Reactions
Q: How have political parties reacted to the suspension and the proposed reform?
A: Members of the Republic party, opposing tax increases, are advocating to return to the previous VAT thresholds. Former Prime Minister Gabriel Attal celebrated the growth.
Q: What is the stance of stakeholder groups like the Union of Autoentrepreneurs (UAE)?
A: The Union of Autoentrepreneurs, represented by François Hurel, welcomed the suspension but cautioned that it is a “suspension, not a suppression.”
Q: what alternatives are being proposed by stakeholders?
A: The Syndicat des independents and VSEs (SDI) proposes lowering the VAT threshold to 25,000 euros specifically for building autoentrepreneurs while reverting to the previous thresholds for other sectors. Michel Picon, president of the employer institution U2P, supports returning to previous VAT thresholds with an exception for the building sector because of ‘unbearable’ competition.
What’s Next for the VAT Reform?
Q: When will the VAT reform be discussed again?
A: The reform will be a central topic of discussion during the 2026 finance bill discussions, which are scheduled for the fall.
Q: What can we expect to happen in the coming months?
A: SME Minister Véronique Louwagie is scheduled to meet with parliamentarians to discuss the preparation of the 2026 finance bill and there’s a possibility of changes being made. There will likely be more debate, proposals, and counter-proposals as stakeholders and politicians attempt to shape the future of VAT for microentrepreneurs. Mr. Hurel anticipates that “all parliamentarians go there with the firm intention to blow up the measure.”
Q: What was the Senate’s stance on this reform?
A: Earlier in April, the Senate finance committee recommended a complete abandonment of the reform. The general rapporteur for the budget in the senate suggested that the reform “hardly hides her tax return objective with an increase in full year revenues estimated at around 800 million euros.”
The following table summarizes the key points of the reform:
| Feature | Proposed reform | Previous System |
| ——————- | ————————————————– | ———————————————————– |
| VAT Threshold (all) | 25,000 euros | 37,500 euros (services) / 85,000 euros (commercial) |
| Status | Suspended | In effect. |
| future Discussion | Upcoming 2026 Finance Bill Discussions | No discussions scheduled. |
| Relevant Stakeholders| Autoentrepreneurs, Building industry, Political parties| No relevant stakeholders involved. |