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Self-employed individuals' VAT threshold reform has been officially scrapped, a decision made without dissent among Members of the European Parliament.

Senate set for second vote on bill: Contending proposal may place over 200,000 small businesses under Value Added Tax (VAT) burden.

Senate now considers second reading vote and potential final adoption of bill, which could impose...
Senate now considers second reading vote and potential final adoption of bill, which could impose value-added tax on over 200,000 small businesses.

Self-employed individuals' VAT threshold reform has been officially scrapped, a decision made without dissent among Members of the European Parliament.

Scrapping the TVA Threshold Change for Micro-Entrepreneurs 💸

It's time to bid adieu to the contested TVA (Value Added Tax) reform targeting micro-entrepreneurs, at least for now! On June 1st, a big shift is set to occur thanks to a parliamentary decision. The adjustment, previously scheduled for March 1st, aims to lower the TVA exemption limit for micro-businesses offering services from the current €37,500 to a more stringent €25,000. This would have impacted about 200,000 small businesses.

Now, a breath of relief is in the air as the Senate prepares to reevaluate this proposal following a vote. Economy Minister Eric Lombard announced a moratorium on this reform back in April, hinting at a reconsideration within the 2026 budget discussion in the autumn.

It's crucial to note that the exact date of this crucial vote on June 2nd remains uncertain. However, reliable sources suggest that the TVA threshold reform for micro-entrepreneurs will take effect from June 1, 2025, following a delay from its initial March 2025 implementation [1][3].

Here's how the reform will play out:

  • Revised Services Threshold: The TVA exemption for services kicks in only after an annual turnover of €25,000, rather than the previous €37,500.
  • Fixed Goods Threshold: The limit for goods remains steady at €85,000, aligning with the EU's domestic sales threshold for goods.
  • No Threshold for Cross-Border Traders: Traders based outside France must register for TVA regardless of their turnover.
  • EU Harmonization Option: Businesses can opt for the pan-European SME scheme, providing a €100,000 threshold for pan-EU sales, potentially reducing the need for multiple TVA registrations across member states [1].

Interestingly, this reform was initially met with an outcry from freelancers and politicians who raised concerns about increased bureaucratic burdens and higher costs for micro-businesses and self-employed individuals [1][3].

As we move towards June 1st, the changes are well underway, with no recent unanimous vote reported [1][3]. If history repeats itself, we can expect the impacted businesses to take stock and adapt to the new realities.

Finally, a side note for digital content creators: Things just got a bit trickier with the EU adopting new VAT rules under ViDA (effective January 1, 2025) [5]. These changes eliminate all thresholds for cross-border digital B2C sales, meaning even micro-sellers must now charge VAT on every transaction, regardless of size. Though this doesn't affect the traditional micro-entrepreneur regime for physical goods or non-digital services, it's essential for those selling online digital products to take notice.

| Category | Previous Threshold | New Threshold (from June 1, 2025) ||----------------------------|-------------------|------------------------------------|| Services (micro/small biz) | €37,500 | €25,000 || Goods (micro/small biz) | Not specified | €85,000 (EU-aligned) || Non-established traders | N/A | No threshold (must register) || Pan-EU SME scheme | N/A | €100,000 (optional) |

Stay tuned for more updates! 🎉💳

  1. The forthcoming parliamentary vote could potentially alter the finance landscape of micro-entrepreneurs in the business sector, as it may decide the fate of the TVA threshold change that is currently set to take effect from June 1, 2025.
  2. The proposals surrounding politics in the general-news sphere revolve around the possible reconsideration of the TVA reform, which, if approved, could significantly impact the fiscal operations of thousands of micro-businesses.

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