U-turn on controversial VAT threshold change for self-employed in France
Measure to be suspended as government opens consultation on matter
The move was criticised by politicians from all camps and was to affect up to 250,000 workers
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Plans to lower VAT thresholds for self-employed entrepreneurs and micro-businesses in France have been temporarily suspended by the government after widespread criticism.
The 2025 budget – which passed through the Senate and was forced through the Assemblée nationale this week – included measures to reduce the VAT-free threshold for self-employed entrepreneurs and micro-businesses to €25,000.
This is down from current levels of €37,500 for artisans and €85,000 for vendors or certain providers of accommodation such as gîtes and chambres d’hotês.
The announcement was heavily criticised by politicians across the spectrum as well as federations supporting self-employed workers, who said it would lead to price increases of 20% and lead more people to commit fraud, with up to 250,000 workers directly affected.
Read more: Anger over changes to VAT rates for self-employed people in new 2025 French budget
Set to come into force on March 1, the move has now been temporarily cancelled.
“The Trade Minister is going to launch a consultation to adjust this measure if necessary,” said Finance Minister Éric Lombard in an interview with media outlet France2 on Thursday.
“During this consultation period, this measure will be suspended, meaning that self-employed entrepreneurs will not have to register to pay VAT if they are below current levels”, he added.
The minister did not confirm how long the consultation is set to last.
The measure was set to raise around €700 million in the budget.
“If, as a result of this dialogue {the policy remains untenable] we will find other ways [to raise the missing finances],” the minister said.
What next for the budget?
The 2025 budget now needs to pass a review by France’s Constitutional Council (Conseil constitutionnel) before it can be implemented.
The Council has the right to remove some of the 68 articles in the bill if they believe them to fall too far outside the scope of a typical budget.
Once this has been done, the budget will come into force at the end of February, with many of the changes being introduced from March 1.
This includes increased maluses on combustion engine vehicle purchases and potential increases in notaire fees.
Read more: French budget is forced through parliament: how could it impact your finances
