Tax exemption thresholds for self-employed individuals remain unchanged in 2025
Some Relief for Small Businesses: Postponement of VAT Reform by the French Government
In a surprising turn of events, the French Minister of Economy and Finance, Eric Lombard, announced on April 30 that the planned reduction of VAT exemption thresholds for small entrepreneurs will not be implemented immediately. Instead, this controversial measure will be revisited during the 2026 budget discussions.
Photo by Ludovic Marin/ AFP Originally reported by Thibaut Lamy, Employment, Retirement, Taxes, Investments Lead at our site. Published on
A potential reprieve or a definitive abandonment of a contentious measure? At this stage, it remains uncertain. However, Eric Lombard confirmed that the government decided to postpone the application of the reform to allow for a calm discussion within the framework of the 2026 finance bill. He acknowledged that the proposed reform does not have broad support, neither for nor against.
The revised VAT structure for small businesses, especially auto-entrepreneurs, has faced significant criticism since it was slipped into the examination of the 2025 budget. Critics argue that the proposed changes would reduce the exemption thresholds from the current 37,500 and 85,000 euros for services and commercial and accommodation activities, respectively, to 25,000 euros of annual turnover.
Navigating the Construction Sector's Competition Conundrum
Critics like Nicolas Cordier, delegate general of the National Federation of Auto-entrepreneurs and Micro-entrepreneurs (FNAE), have criticized the reform, claiming it would slow down business creation further. On the other hand, the construction sector supports the reform, arguing it addresses unfair competition from auto-entrepreneurs. However, François Hurel, president of the Union of Auto-entrepreneurs (UAE), contends that creating a VAT differential within the community of auto-entrepreneurs would only lead to new corporatisms.
After an initial suspension of the measure until June 1 and numerous discussions with federations of auto-entrepreneurs and parliamentarians, no agreement has been reached. This was hinted at in a press release from the Senate's Finance Committee on April 9, which advocated for the abandonment of the reform. Its rapporteur, Jean-François Husson (LR), expressed his disappointment with the lack of support for the measure following numerous hearings with sector representatives.
With budget discussions for 2026 on the horizon, all parties now have several months to prepare their arguments.
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Keywords: Auto-entrepreneur, VAT, Taxation, Budget, Government
Insights from Enrichment Data:- The French government temporarily suspended the implementation of VAT reforms for small entrepreneurs, citing concerns raised during a public consultation held from February 7-28, 2025.- The proposed reform aimed to unify the VAT exemption threshold at €25,000 annual turnover to align with EU rules and balance competition between VAT-exempt and VAT-liable businesses.- The reform's implementation has been postponed until at least 2026, as announced by Prime Minister Gabriel Attal on April 30, 2025.- The government remains committed to preserving the micro-entrepreneur framework while addressing EU compliance issues. Budget discussions for 2026 will likely revisit the revised thresholds and their phased application.
- The proposed VAT reform for auto-entrepreneurs, initially intended to be implemented in 2025, has been postponed until the 2026 budget discussions, following a suspension of the measure.
- Critics argue that the revised VAT structure, which aims to unify the exemption threshold at €25,000 annual turnover, could slow down business creation for small entrepreneurs, while the construction sector supports it as a means to address unfair competition.
- The French government has temporarily suspended the reform, acknowledging the lack of broad support for the measure, and has agreed to revisit the revised thresholds during the 2026 finance bill discussions.
- During political debates around policy-and-legislation, key figures like Nicolas Cordier and François Hurel have expressed opposing views on the reform, with Cordier claiming it would hinder business creation and Hurel cautioning against creating a VAT differential within the community of auto-entrepreneurs.
- The French Minister of Economy and Finance, Eric Lombard, has confirmed that the postponement of the reform was to allow for calm discussions within the framework of the 2026 finance bill, addressing the competition issue in the business sector.
