by Matthieu Van Gucht
Reform of the 'Franchise en base de TVA' in France: delay and future prospects
On 30 April 2025, the French government issued an official press release on the planned reform of the 'Franchise en base de TVA', a VAT exemption scheme for small businesses. Although there had been talk of reviewing this scheme for some time, the proposal met with considerable opposition from various sectors, leading to the reform being postponed for the time being.
What is the 'Franchise en base de TVA'?
Franchise en base de TVA is a tax scheme in France that exempts small businesses from collecting and remitting VAT, as long as their annual turnover remains below certain thresholds. This significantly reduces the administrative burden, making it easier to run a business, especially for the self-employed and small businesses.
Currently, the following thresholds apply for the VAT exemption:
€91,900 for trade and accommodation services (such as hotels and restaurants)
€36,800 for other services, such as consultancy, freelancing and small crafts
The scheme allows small businesses to compete without the complexity of VAT returns and remittances, helping them to better focus on their core business.
What did the planned reform entail?
The proposed reform aimed to significantly lower turnover thresholds, regardless of the nature of the activity. This would oblige many small entrepreneurs to collect and remit VAT, which would place an administrative and financial burden on them. This led to strong criticism, especially from independent service providers and small businesses that rely on the exemption scheme to remain competitive.
Reform delay and further steps
In response to the fierce backlash from various sectors, the French government has decided to postpone the reform until the end of 2025. This means that the scheme will remain unchanged for the time being and that the planned consultations with affected parties will be given time to reach a balanced and sustainable reform proposal.
The government stresses that they want to develop a review that is fair, clear and future-proof. This will be done in consultation with stakeholders to minimize the impact on small businesses.
What does this mean for you as an entrepreneur under this statute in France?
For entrepreneurs and the self-employed operating under this statute in France, it remains important to monitor these developments closely. Further adjustments may be announced by the end of this year, when the new budget for 2026 is drawn up.
Questions about the VAT regime in France?
Do you have specific questions about how these changes may affect your business? Feel free to contact our experts for tailored advice.
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Matthieu Van Gucht
Team Manager Accountancy matthieu.vangucht@vandelanotte.fr
Disclaimer
In our opinions, we rely on current legislation, interpretations and legal doctrine. This does not prevent the administration from disputing them or from changing existing interpretations.
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