France Senate rejects lower 2026 VAT registration thresholds for 2026
France’s Senate has rejected a provision of the 2026 Finance Bill that would have lowered value-added tax (VAT) registration thresholds for small businesses and self-employed workers. The decision effectively preserves the current, higher exemption limits and removes a potentially significant compliance burden for tens of thousands of micro-entrepreneurs.
The amendment was voted through on 2 December, stripping Article 25 of the draft Finance Bill of its VAT reform measures and cancelling the proposal outright for the 2026 fiscal year. The French Budget already faces deadlock on revenue proposals.
Current VAT thresholds remain unchanged for 2025
Under the regime in place for 2025, VAT registration remains optional for many micro-businesses, with different turnover thresholds depending on the nature of activity:
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EUR 85,000 for supplies of goods
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EUR 37,500 for services and liberal activities
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EUR 50,000 for lawyers and supply of works subject to copyright
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EUR 35,000 for certain other non-regulated services offered by legal professionals
These thresholds provide a relatively high ceiling before VAT becomes mandatory, allowing many sole traders and micro-enterprises to operate under simplified tax regimes.
The withdrawn proposal: what was planned for 2026
The Finance Bill had sought to substantially reduce the VAT registration trigger, introducing a single, low turnover limit that would apply broadly across self-employed professions.
Key features proposed under Article 25 included:
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Mandatory registration where prior-year turnover exceeded EUR 37,500
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Mandatory registration in the current year where turnover exceeded EUR 41,250 (i.e., 10 percent above the new threshold)
Separate, lower thresholds had also been drafted for business activities related to construction services:
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EUR 25,000 (prior year)
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EUR 27,500 (current year)
If passed, the reform would have required many small operators to register for VAT significantly earlier than under today’s regime, narrowing exemptions and broadening the VAT base.
Senate rejection: rationale and implications
Senators voted to strike the proposal from the Bill entirely, citing concerns over the administrative and financial impact on small operators during a period of economic uncertainty. The change would have required many businesses currently below the thresholds to:
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Charge VAT on sales
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File periodic returns
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Implement compliant record-keeping and invoicing systems
For cash-constrained micro-enterprises, those obligations could have increased operational cost and complexity, while reducing price competitiveness against non-VAT-registered peers.
The Senate’s decision means the 2026 VAT reform for self-employed workers is definitively cancelled, at least for the upcoming fiscal year.
What happens next
Although the proposal has been withdrawn, the government remains under pressure to rebalance the VAT system to improve revenue performance and address structural gaps between tax regimes.
The Senate’s decision to remove the VAT threshold reform from the 2026 Finance Bill preserves the current simplified framework for small businesses and freelancers. The vote reflects a cautious approach to tax reform during a challenging economic cycle, but it does not signal the end of debate on the subject. Further proposals are likely, and small businesses should monitor developments closely as France continues to examine the structure and efficiency of its VAT regime.
Read more in our French VAT guide.
