Please note an important update to this article as of 10th February 2025:
This measure, which is normally scheduled to apply from 1st March 2025, has been suspended for the time being.
In response to the concerns of professionals, the government is opening discussions with relevant parties to clarify the implementation of this measure.
Please note: the finance bill is the subject of an appeal before the Constitutional Council.
Therefore, there could be changes before it is promulgated by the President of the Republic. To be continued…
Please join the discussion in our fluent Community here.
At tonight’s pre-AGM meeting of the Language Network, members learned that the Senate had today overwhelmingly adopted the Finance Bill, which was the subject of an agreement between MPs and Senators. Following the use of the 49.3 vote in the French National Assembly, this vote by the Senate means that the budget can now be definitively adopted by Parliament, a month and a half late.
But the item that sent a wind of panic through the meeting was that from March 1st this year, the VAT exemption threshold will be lowered to €25,000 annual turnover, compared with the current €37,500, which will radically change the situation for hundreds of thousands of micro-entrepreneurs.
However, this doesn’t necessarily affect us independent trainers.
This represents a significant reduction in the exemption for micro-entrepreneurs – previously known as auto-entrepreneurs – who until now have benefited from an exemption up to an annual turnover of €37,500 for services and €85,000 for commercial activities (purchase/sale of goods).
With this new threshold lowered to €25,000, the micro-entrepreneurs concerned will now have to charge VAT to their customers, making their services 20% more expensive, before passing it on to the State.
However, most training and teaching services are still exempt from VAT. This applies in particular to school and university teaching, continuing vocational training (subject to certain conditions) and private tuition and lessons. The following activities may be exempt from VAT if certain conditions are met:
School, university, technical, vocational, agricultural and distance education
Continuing vocational training provided by a public institution or a company holding a certificate issued by the competent administrative authority
Private courses or lessons given by individual entrepreneurs paid for directly by the students.
Continuing vocational training
Continuing vocational training may be provided by a public body or a private body.
The rules for obtaining VAT exemption are different when the training is provided by a private company or an approved skills provider.
Training provided by a private company can be exempt from VAT if it has a certificate.
Private companies wishing to be exempt from VAT must apply for a certificate using form 3511-SD. The company must complete 4 copies and send 3 of them by registered post with acknowledgement of receipt to the Regional Directorate for the Economy, Employment, Labour and Solidarity (DREETS) where the company’s registered office is located.
DREETS has 3 months from receipt of the application to issue the certificate. If no response is received within this period, the certificate is deemed to have been issued.
The DREETS must send a copy of the certificate or refusal to issue the certificate to the company and to the public finance department to which the company belongs. In the event of refusal, DREETS must state the reasons for the refusal.
The company is exempt from VAT as soon as it receives the certificate.
When a teacher or trainer is exempt from VAT, this means that they no longer have to collect VAT on behalf of the State. In other words, they do not charge VAT to their customers.
Most independent trainers made the choice of whether they wished to be exempted or not from VAT right at the beginning, when setting up their private entreprise, and at the time of applying for their ‘numéro de déclaration d’activité’, or NDA.
So if you have never charged VAT on your training courses, this is probably because you have already applied for, and received, this certificate, but it may well have been back in the day when this procedure was handled by the DIRECCTE, which on April 1st 2021 ceded to the new DREETS (or DRIEETS, for the Île de France!)
When they are exempt from VAT for their training or teaching activity, teachers and trainers cannot deduct VAT on purchases made for the purposes of their activity.
They lose their right to deduct.
On the other hand, if the teacher or trainer invoices for services or goods that are not covered by the VAT exemption, they will have to charge VAT to their customers for these sales, but they will also be able to deduct VAT on purchases made for this part of their professional activity.
For example, the following services and goods may be subject to VAT:
Training services that are not related to professional training
Sales of items made by students as part of their training that are in competition with the transactions of professionals subject to VAT.
This is definitely something we can discuss at our next Watchdogs meeting, under the “admin and legislation” banner.
Looking forward to discussing this with you soon,
ian
Sources:
Budget 2025 : la baisse des exemptions de TVA va pénaliser des centaines de milliers de micro-entrepreneurs
Budget 2025 : le texte définitivement adopté par le Parlement, après un dernier vote du Sénat
Taux de TVA applicables à la formation et à l’enseignement
