VAT Threshold for the Self-Employed in France 2025: Exemption and Obligations
The VAT exemption (franchise en base) is one of the less-known advantages of the micro-enterprise: below certain thresholds, you do not charge VAT to clients and do not file VAT returns. But these thresholds changed in 2024, and crossing them has concrete consequences for your business management.
What is the VAT exemption?
By default, micro-entrepreneurs benefit from the franchise en base de TVA: they are exempt from collecting and remitting VAT. On their invoices, they must include the note "TVA non applicable, art. 293 B du CGI".
This regime has two direct effects:
- Advantage: your prices appear cheaper for clients who cannot recover VAT (individuals, associations, small non-VAT-registered businesses)
- Disadvantage: you cannot recover VAT on your own professional purchases (equipment, software, office rent…)
2025 VAT exemption thresholds
The thresholds were modified by the 2024 Finance Act:
| Activity type | Main threshold | Tolerance ceiling |
|---|---|---|
| Services, BNC | €37,500 | €41,250 |
| Sale of goods, restaurants, accommodation | €85,000 | €93,500 |
The tolerance ceiling: if you exceed the main threshold (€37,500 or €85,000) but stay below the tolerance ceiling, you remain VAT-exempt for the current year. VAT applies from 1 January of the following year.
If you exceed the tolerance ceiling during the year, VAT applies from the 1st day of the month of the breach.
What happens when you cross the threshold?
You become liable for VAT. Concretely:
1. You must charge VAT to clients (20% for most services, 10% for restaurants, 5.5% for food, 2.1% for medicines)
2. You must file VAT returns (monthly or quarterly depending on your regime)
3. You can recover VAT on your professional purchases — which becomes beneficial if you invest heavily in equipment
Impact on your actual revenue
Watch out for the trap: if you were billing €40,000 excl. VAT and become VAT-liable, your individual clients will see a 20% price increase. For B2B clients who are themselves VAT-registered, there is no real impact (they recover it).
Example:
- Graphic designer, revenue = €42,000 — exceeds €37,500 threshold
- Clients: 80% companies (recover VAT) + 20% associations (do not recover)
- Real impact: only the 20% of associations face higher prices
Filing VAT returns: how it works
Once liable, you choose between:
- Simplified regime (RSI): 2 annual advance payments + 1 annual return CA12 — for businesses where annual VAT is under €15,000
- Normal real regime: monthly or quarterly CA3 return — for all beyond
Most newly VAT-liable freelancers opt for the simplified regime. You can manage this with your invoicing software (Indy, Freebe) or directly on impots.gouv.fr.
Can you stay exempt despite exceeding the threshold?
No. Once you exceed the tolerance ceiling, the switch is automatic and mandatory. However, you can voluntarily opt in to VAT before reaching the thresholds — which can be advantageous if you purchase significant equipment.
Is crossing the VAT threshold bad news?
Not necessarily. For B2B freelancers, becoming VAT-liable is often neutral (your clients recover it) or even advantageous (you recover VAT on your own purchases). It is mainly an additional administrative burden — with good invoicing software, it remains manageable.
If your clients are mainly individuals, the price increase can affect your competitiveness. In that case, anticipating the breach and adjusting your communication is important.
Note: the VAT threshold (€37,500 or €85,000) is independent of the micro-enterprise revenue cap (€77,700 or €188,700). Both thresholds coexist and play different roles.