The VAT threshold for small businesses in France has been under review, with a proposed reduction to €25,000 initially planned for March 2025. However, this change has been suspended until at least June 2025, meaning that for now, the existing threshold of €37,500 remains in place.
If your turnover stays below €37,500 for the year, you do not need to register for VAT and can continue operating under the franchise en base de TVA, which simplifies tax obligations. However, if you exceed this limit, VAT registration becomes mandatory (the exact rules depend on how much over this amount you go).
There are additional rules regarding when and how VAT registration applies, particularly if you temporarily exceed the threshold or if the limit is reduced later this year. Until the French government confirms how the €25,000 threshold will be implemented, we are waiting for further clarification on how these changes will affect small business owners.
What you should do now
Although nothing has changed yet, it is advisable to be prepared in case VAT registration becomes necessary.
- Monitor your turnover carefully, especially if you are approaching the €37,500 limit.
- If you are close to the threshold, keep all receipts for business expenses and request VAT invoices where possible, as you may be able to reclaim VAT on purchases if you have to register.
- Stay informed about upcoming changes, as we expect more details to be announced by June 2025.
While VAT registration may seem daunting, once you are set up, it is not as complicated as it sounds. Submitting VAT returns is a fairly straightforward process, similar in many ways to filing your URSSAF declarations.
Inside the Momentum Business Club, we keep members updated on tax and VAT developments in France. We also host expert-led sessions to help business owners navigate financial and tax regulations confidently.
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