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After months of uncertainty, the long‑disputed reform of VAT exemption thresholds for France’s auto‑entrepreneurs is back on the political agenda.
The measure, initially abandoned under the François Bayrou government earlier this year following major protests, has reappeared in the draft 2026 Finance Bill led by Prime Minister Sébastien Lecornu.

A Reform Once Shelved, Now Revived

Originally planned for March 2025, the reform aimed to introduce a single VAT exemption ceiling of €25,000 in annual turnover. The plan was suspended in February 2025 after fierce opposition from self‑employed workers, professional associations, and unions, who denounced it as economically destabilizing.
The new proposal—outlined in Article 25 of the 2026 draft Finance Bill—is a softened version but still reshapes the VAT framework for micro‑entrepreneurs. It establishes a unified exemption threshold of €37,500 across most activities, with one crucial exception: the construction and building sector, where a lower €25,000 ceiling would apply.

The government justifies this sector‑specific adjustment as a response to long‑standing demands from major trade federations in construction, who argue that the auto‑entrepreneur status creates unfair competition with traditionally regulated businesses.

Key Changes by Sector

• Service providers: No change, as the €37,500 ceiling is already in place.

• Commercial and craft activities: Currently exempt up to €85,000, these businesses would face a sharp reduction to €37,500.

• Building sector: The most affected, with a drop from €85,000 to €25,000.

• Lawyers and performing artists: Would also move toward unified thresholds, departing from the €50,000 limit currently applied.

According to the government, unifying thresholds will bring coherence to the system and clarify obligations for all self‑employed workers. However, the Urssaf reports that the average annual turnover for auto‑entrepreneurs in 2024 was just over €20,000—meaning most remain below the existing thresholds and do not yet charge VAT.

Persistent Fears Among the Self‑Employed

Despite being less drastic than the 2025 version, the reform continues to alarm small business owners. Many fear reduced competitiveness, particularly when billing customers who are not subject to VAT. Jean‑Guilhem Darré, General Secretary of the Syndicat des Indépendants, warns that “tens of thousands of businesses—especially in rural areas—depend on this model. Given that they earn between €900 and €1,200 per month, many will not survive if this reform goes through.”

Independent professionals echo the sentiment. Psychopractitioner Françoise Madec likened the policy to “crushing a mosquito with a nuclear warhead.” Analysts also predict possible side effects such as under‑reporting income to stay below thresholds or multiplying micro‑enterprise registrations to bypass the ceiling.

What Happens Next

For now, the current VAT thresholds remain valid for all of 2025.
The Finance Bill explicitly ensures legal continuity, allowing businesses to operate under the 2025 limits until December 31.
However, debate will intensify as the Budget 2026 vote begins on October 15 at the National Assembly. If approved, the reform could fundamentally transform France’s micro‑enterprise regime, reshaping the financial landscape for self‑employed workers across the country.