The government renounces reforming VAT for self-employed people in 2026

The 2026 draft budget planned to lower the annual turnover threshold below which micro-enterprises are exempt from VAT.

A new setback from the government. The Minister of the Budget, Amélie de Montchalin, announced Monday, December 22 that she was ratifying the removal of the VAT reform proposal for self-employed people, contested and rejected by both houses of Parliament during the budgetary discussion. “In the Assembly and the Senate, it was said that it was not a good idea (…) There is a compromise because obviously our idea of ​​reform is not good, I take note of it, it is democracy, it will not be put in the final budget,” she declared during a press briefing after an extraordinary Council of Ministers, during which the special budget law was presented.

In November, parliamentarians had already removed, through a bill, a provision from the 2025 budget lowering the threshold below which micro-enterprises are exempt from VAT to 25,000 euros of annual turnover to 25,000 euros, instead of the current 37,500 euros for the provision of services and 85,000 euros for commercial activities.

This system, which was to bring in around 780 million euros per year, half of which for the State, had sparked an outcry from economic players, first and foremost from particularly targeted micro-enterprises. In its 2026 draft budget, the government provided for a middle path, with a “common law” threshold, set at 37,500 euros, and a specific threshold lowered to 25,000 euros for construction micro-enterprises.