France's 2025 Budget - finally passed in February after much political drama - contained a provision that would have a big impact on France's self-employed people registered under the micro-entrepreneur scheme.
The budget proposed a big drop in the VAT threshold, bringing many freelancers, contractors and sole traders into the VAT threshold for the first time.
The change proved extremely controversial and was suspended to allow for a review - but on Wednesday the finance minister, Éric Lombard, announced that the suspension will continue and the measure will be decided during debates on the 2026 Budget, which begin in the autumn.
He told the Assemblée nationale: "We note that the proposed reform does not meet with unanimous approval, either for or against.
"The government has taken the decision to suspend the implementation of the reform and let the debate take place calmly within the framework of the Budget for 2026."
Anyone registered under the micro-entrepreneur scheme can therefore continue paying VAT at the old rate until the end of the year - if the change is approved it will be included in the 2026 Budget.
Under current rules, anyone registered as a micro-entrepreneur benefits from a simplified business regime, as well as a VAT exemption on earnings below €37,500 a year for those selling services, or €85,000 a year for those selling goods.
However the 2025 Budget created a single VAT threshold for all businesses of €25,000 – which would have brought many micro entrepreneurs into paying VAT for the first time.
Within hours of the budget being passed back in February, it was announced that VAT reform had been ‘paused’ to allow time for consultation, following a backlash from the small business community.
There are around 2.5 million registered micro-entrepreneurs (formerly known as auto entrepreneurs) in France.
Those registered as micro-entrepreneurs include freelancers (such as journalists, translators and tutors), sole traders (including electricians or plumbers) or anyone running a small business such as a shop or gîte - the status is only available to people earning under a certain amount.
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