VAT Franchise Reform in France Suspended Until June 1, 2025
Important Tax Update for Small Businesses and Self-Employed Professionals
Our tax department would like to inform clients that the anticipated reform of the VAT franchise system in France has been officially suspended until June 1, 2025. This development has significant implications for small businesses and self-employed professionals currently benefiting from the VAT franchise regime.
Background on the VAT Franchise Reform
The VAT franchise system allows eligible small businesses with turnover below certain thresholds to be exempt from charging, collecting, and remitting VAT. The planned reform would have modified these thresholds and introduced new compliance requirements.
However, following extensive consultation with business representatives and consideration of the current economic climate, French authorities have decided to postpone the implementation of these changes.
Key Implications for Businesses
This suspension means:
- Current Thresholds Remain in Effect: The existing VAT franchise thresholds will continue to apply until June 1, 2025:
- €85,800 for businesses selling goods
- €34,400 for service providers
- Compliance Stability: Businesses will not need to adapt to new VAT procedures or reporting requirements during this period
- Extended Planning Period: This delay provides additional time for affected businesses to prepare for the eventual implementation of the reform
Recommendations for Our Clients
In light of this development, our firm recommends that affected businesses:
- Continue operating under the current VAT franchise rules
- Use this extended timeframe to assess how the eventual reforms might impact your business
- Consider scheduling a tax planning session to evaluate whether the VAT franchise regime remains the most advantageous option for your specific situation
- Stay informed about any further announcements regarding potential modifications to the reform
We will continue to monitor developments regarding this reform and provide timely updates as new information becomes available. For personalized advice regarding your VAT obligations, please feel free to contact us and check our website: https://www.serviceonnewgrounds.com
References
- Editions Francis Lefebvre (2025) https://www.efl.fr/actualite/reforme-franchise-tva-suspendue-jusqu-1er-juin-2025_f2c237432-92fa-49a0-bdd6-a21978408351
- Service public (2025) : https://entreprendre.service-public.fr/actualites/A17995
