France Suspends VAT Registration Threshold Reduction for Services Amid Criticism
In a move that has sparked widespread backlash, the French government has proposed reducing the VAT registration threshold for services from €37,500 to €25,000, starting 1 March 2025.
This change, announced in the 5 February 2025 Finance Bill, would have affected up to 250,000 self-employed workers, leading to concerns about a potential 20% price hike and an increase in VAT fraud.
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The proposal has been met with criticism from politicians across party lines, as well as associations representing freelancers, who argue that the lower threshold could push many small businesses into financial hardship. In response to the backlash, the Trade Minister has suspended the measure and announced plans for a full public consultation.
The new VAT registration thresholds, as outlined for 2025, would have been as follows:
- Goods: €85,000
- Services: €25,000
For reference, the annual VAT registration threshold for services in 2024 was €37,500. The revised figures come as part of France’s triennial VAT review process, which is also aligned with the EU's new scheme, offering businesses a higher threshold of €85,000 for domestic sales or the option of a €100,000 threshold for pan-European sales.
Before the changes can be fully implemented, the 2025 budget will undergo a review by France’s Constitutional Council.
There’s more you should know about e-invoicing in France – learn more about the new and upcoming regulations.
