Auto-entrepreneur and VAT
when and how to charge

One of the most appealing features of the French auto-entrepreneur status is the VAT exemption. But when exactly does it apply? What happens when you exceed the thresholds? And how does it affect your invoices? This guide explains the franchise en base de TVA mechanism, the 2026 thresholds, and the practical steps to follow when transitioning to VAT collection.

What is the franchise en base de TVA?

The franchise en base de TVA (basic VAT exemption) is a simplified tax regime that allows auto-entrepreneurs to operate without charging VAT to their clients. In practical terms, this means two things: you do not add VAT to your prices, and you cannot deduct VAT on your own purchases and expenses. The net effect for your clients is often a price advantage, since they pay no VAT on your services -- though they also cannot reclaim any input VAT from your invoices.

This regime is automatic when you register as an auto-entrepreneur, provided your turnover stays below certain thresholds. You do not need to apply for it or file any specific paperwork. It remains in force as long as you meet the conditions, and it significantly reduces your administrative burden: no VAT returns to file, no VAT accounting to maintain.

The legal basis for this exemption is Article 293 B of the Code General des Impots (CGI -- the French General Tax Code). This is the article you must reference on every invoice you issue while operating under the exemption.

2026 VAT exemption thresholds

The franchise en base de TVA applies as long as your annual turnover (chiffre d'affaires) remains below the following thresholds, which are set by law and updated periodically:

• 37,500 euros (excl. tax) for service activities. This covers both BIC (industrial and commercial profits) and BNC (non-commercial profits) categories -- freelance consulting, web development, graphic design, teaching, coaching, etc.
• 85,000 euros (excl. tax) for the sale of goods, supplies and food products (take-away or on-site consumption), as well as accommodation services (furnished holiday rentals, bed and breakfast, etc.).

These thresholds are assessed on a calendar year basis. If you started your activity mid-year, the threshold is prorated based on the number of days of activity during that year. For example, if you registered on 1 July 2026, your service threshold for that year would be approximately 18,750 euros (half of 37,500).

It is important to note that these thresholds are distinct from the auto-entrepreneur turnover ceilings (which determine whether you can remain under the micro-enterprise regime). You can exceed the VAT thresholds while still being an auto-entrepreneur -- you will simply need to start charging and remitting VAT.

What happens when you exceed the thresholds

Exceeding the VAT exemption threshold triggers a mandatory transition to VAT collection. Here is how the process works in practice:

If your turnover exceeds the threshold during a calendar year, VAT becomes applicable from the first day of the month in which the threshold was exceeded. For instance, if you are a freelance consultant and your cumulative 2026 turnover crosses 37,500 euros on 15 September, you must charge VAT on all invoices issued from 1 September onwards.

The immediate steps you need to take are:

• Notify your tax office: contact your Service des Impots des Entreprises (SIE) to declare the threshold crossing. They will assign you an intra-community VAT number (numero de TVA intracommunautaire), which you will need to display on all future invoices.
• Update your invoices: replace the "TVA non applicable" statement with proper VAT lines. Each invoice must now show the amount excluding tax (HT), the applicable VAT rate and amount, and the total including tax (TTC). The standard French VAT rate is 20%, though reduced rates of 10%, 5.5% or 2.1% may apply depending on the nature of your activity.
• File VAT returns: you will need to file regular VAT returns (monthly or quarterly, depending on your regime) and remit the collected VAT to the tax authorities, minus any deductible input VAT on your professional purchases.
• Adjust your pricing: decide whether to absorb the VAT in your existing prices or add it on top. For B2B clients who can reclaim VAT, adding it on top is typically neutral. For B2C clients, the impact on your competitiveness needs careful consideration.

The mandatory VAT exemption statement on your invoices

As long as you benefit from the franchise en base, every single invoice you issue must include the following statement: "TVA non applicable, article 293 B du CGI". This translates to "VAT not applicable, Article 293 B of the French General Tax Code".

This statement is not optional -- it is a legal requirement. Its purpose is to inform the buyer that no VAT is being charged and that the amounts on the invoice are therefore not subject to VAT deduction. Omitting this statement is the most common mistake auto-entrepreneurs make, and it can have serious consequences: the tax authorities may interpret the omission as an attempt to charge VAT without remitting it, which constitutes tax fraud.

The statement should appear prominently on the invoice, typically near the total amount. Here is how it looks in context:

Transitioning your invoices: before and after VAT

The transition from VAT-exempt to VAT-liable invoicing requires careful handling. Here are the key points to manage correctly:

• Do not backdate: VAT applies from the first day of the month of threshold crossing, not retroactively. Invoices issued before that date remain valid without VAT.
• Maintain your numbering sequence: the transition to VAT does not require a new numbering sequence. Continue your existing chronological numbering without interruption.
• Inform your clients: notify your regular clients of the change, especially B2C clients for whom the price increase will be visible. For B2B clients, provide your new VAT number so they can deduct the VAT on your invoices.
• Keep records: document the date of threshold crossing and retain evidence of your cumulative turnover calculations. This will be important in case of a tax audit.

Voluntary VAT registration

Even if your turnover is below the exemption thresholds, you have the option to voluntarily register for VAT. This can be advantageous in certain situations:

• Significant professional expenses: if you purchase substantial equipment, software or supplies for your activity, being VAT-registered allows you to deduct the VAT on those purchases, effectively reducing their cost by 20%.
• B2B clientele: if your clients are primarily businesses, they can deduct the VAT you charge. Your prices including VAT are therefore cost-neutral for them, while you benefit from input VAT deductions.
• International transactions: if you frequently work with clients in other EU countries, having an intra-community VAT number simplifies cross-border invoicing and may be required for certain transactions.

To opt for voluntary VAT registration, contact your SIE. Be aware that this decision is binding for a minimum of two years -- you cannot switch back to the exemption before that period elapses.

Common VAT mistakes to avoid

Based on our experience supporting auto-entrepreneurs, here are the most frequent VAT-related errors:

• Omitting the 293B statement: as discussed above, this is the number-one mistake. Always include it on every invoice while you are VAT-exempt.
• Not monitoring your threshold: many auto-entrepreneurs discover they have exceeded the VAT threshold months after the fact. Track your cumulative turnover throughout the year and anticipate the transition.
• Charging VAT without being registered: if you charge VAT on an invoice without having a VAT number and without remitting it, you are committing tax fraud. Never display a VAT amount unless you are properly registered.
• Applying the wrong VAT rate: the standard rate is 20%, but certain activities qualify for reduced rates. Verify the applicable rate for your specific activity before issuing invoices.
• Forgetting to update all documents: when transitioning to VAT, update not just your invoices but also your quotes, general terms and conditions and any online pricing displays.

Frequently asked questions

At what threshold must I charge VAT?

For service activities, the VAT exemption threshold is 37,500 euros (excl. tax) per year. For the sale of goods, it is 85,000 euros. Once you exceed these thresholds during a calendar year, VAT becomes mandatory from the first day of the month in which the threshold was crossed.

What happens if I exceed the VAT threshold mid-year?

VAT becomes applicable from the first day of the month in which you crossed the threshold. You must contact your tax office (SIE) to obtain a VAT number, update all future invoices to include VAT lines, and begin filing regular VAT returns. Invoices issued before the threshold crossing remain valid without VAT.

Can I voluntarily register for VAT?

Yes. Even if your turnover is below the exemption thresholds, you can opt for voluntary VAT registration. This can be advantageous if you have significant professional expenses (you can deduct input VAT) or primarily B2B clients (for whom VAT is cost-neutral). The commitment is binding for a minimum of two calendar years.

How to switch from VAT-exempt to VAT-liable on invoices?

Replace the "TVA non applicable, article 293 B du CGI" statement with proper VAT lines showing the amount excluding tax, VAT rate and amount, and total including tax. Add your intra-community VAT number. Continue your existing invoice numbering sequence without interruption. Inform your regular clients of the change.