French Government Halts Controversial Auto-Entrepreneur VAT Rule

The planned reduction of the VAT exemption threshold from €37,500 to €25,000 has been suspended following widespread backlash and calls for consultation.

The 2025 budget initially included a measure to lower the VAT exemption threshold for auto-entrepreneurs to €25,000, impacting over 200,000 small businesses.
Critics argued the change would increase administrative burdens, drive up costs for clients, and potentially lead to business closures or tax evasion.
The government announced the suspension of the measure, citing the need for a consultation process to address concerns raised by affected parties.
The measure, intended to simplify tax rules and reduce competition disparities, was expected to generate €400 million in revenue for the state.
Political opposition spanned across the spectrum, with both far-right and left-wing parties supporting the auto-entrepreneurs' demands for reconsideration.