From March 2025, all self-employed entrepreneurs will be on the same footing: The VAT exemption threshold will be set at €25,000, regardless of their sector of activity. Does this mean they will have to change their business status?
From 1 March 2025, the VAT exemption threshold for self-employed entrepreneurs will be drastically lowered to €25,000, regardless of the sector they work in.
This reform, introduced after François Bayrou used Article 49.3 of the Constitution to push through the 2025 budget on Monday 3 February, has French micro-entrepreneurs scratching their heads.
Microentrepreneurs benefit from an exemption that allows them not to charge VAT to their customers, which is a significant advantage over businesses subject to VAT.
A sudden drop in the exemption threshold
Before we go any further, a quick reminder: micro-entrepreneurs, formerly known as auto-entrepreneurs, are self-employed individuals who are subject to a simplified tax and social security regime. Until now, the VAT exemption has been dependent on their activity:
– 85,000 EU for commercial and craft activities;
– EUR 37,500 for services and professional activities.
Below these amounts, they benefited from a VAT exemption, which meant they did not have to collect VAT or pay it to the state. But this model is about to be shattered. In a few weeks, the exemption threshold will drop to €25,000, regardless of activity.
Cabinet Nicolas BRAHIN
Advokatfirma i NICE, Lawyers in NIC
Camilla Nissen MICHELIS
Assistante – Traductrice
1, Rue Louis Gassin – 06300 NICE (FRANCE)
Tel : +33 493 830 876 / Fax : +33 493 181 437
Camilla.nissen.michelis@brahin-avocats.com
www.brahin-avocats.com
