2026 Finance Act: what actually changes for very small businesses

Quick answer. For a very small business, the 2026 Finance Act keeps the reduced corporate tax at 15% up to €42,500 of profit, raises the flat tax on dividends to 31.4%, maintains the VAT exemption (€37,500 for services, €85,000 for trade) and confirms mandatory receipt of electronic invoices from 1 September 2026.

Very small businesses often read commentary on the Finance Act written for mid-sized companies or groups. Many high-profile measures simply do not apply to them. Conversely, two or three 2026 changes have a direct cash-flow effect on a single-shareholder company director, a sole-member limited company or a micro-entrepreneur.

Our aim here is practical: to sort through it. We only cover the enacted measures that affect a small structure, with the figures confirmed after the vote. For a broader view, see the key measures of the 2026 Finance Act for SMEs and our summary of what to remember from the 2026 Finance Act.

The table below guides your reading. A very small business is not affected by everything circulating about the 2026 Finance Act.

Our reading. For most very small businesses we support, three topics dominate in 2026: the salary-versus-dividends trade-off after the flat-tax increase, the reassuring retention of the VAT exemption, and even minimal preparation for e-invoicing.

An amendment proposed raising to €100,000 the profit ceiling taxed at the reduced corporate-tax rate. It was not retained in the enacted law. The 15% reduced rate therefore remains applicable up to €42,500 of profit, then 25% above that.

This reduced rate is not automatic. Under article 219 of the French Tax Code, it requires turnover excluding tax below €10m, fully paid-up capital held at least 75% by individuals. Most very small businesses meet these conditions, but we always check capital ownership for structures with several shareholders.

In practice, a single-shareholder company posting €60,000 of taxable profit applies 15% on the first €42,500, then 25% on the remaining €17,500. The calculation stays simple, but the low ceiling means a growing small business quickly moves into the 25% bracket.

The underestimated risk. Some directors had anticipated the rise to €100,000 in their cash-flow projections. That extension does not exist. We recommend recalibrating forecasts on the actual €42,500 threshold, otherwise you overstate available net profit.

The single flat-rate levy on dividends rises to 31.4% in 2026. It breaks down into 12.8% income tax and 18.6% social levies. The increase comes from the 2026 Social Security Financing Act, which raises the CSG by 1.4 points, lifting social levies on capital income from 17.2% to 18.6%.

This change directly affects the manager or president of a small business who pays themselves dividends rather than a salary. On a €10,000 distribution, the levy now reaches €3,140 instead of €3,000 under the old 30% rate.

An option exists: subject the dividends to the progressive income-tax scale, with a 40% allowance and CSG deductible up to 6.8%. This option is often more favourable for a household in a low marginal bracket (0% or 11%). Note that the option for the scale is global: it applies to all the household's investment income.

Trade-off. Flat tax or progressive scale, the right choice depends on your tax household, not only on the company.

We run this trade-off every year, dividend by dividend, as part of our business tax advisory service. A director we support was planning a large distribution based on the old 30% rate: recalculating at 31.4% justified testing the scale option, more favourable in his family situation.

This is probably the best 2026 news for the smallest structures. Law no. 2025-1044 of 3 November 2025 maintains the VAT exemption thresholds and abandons the plan for a single lowered threshold of €25,000.

A small business below the threshold does not charge VAT and does not declare it. Nor does it reclaim VAT on purchases. For a service provider with few expenses, this simplicity remains a real administrative advantage.

The increased threshold plays a key role: exceeding the base threshold does not immediately remove the exemption, as long as the increased threshold is not crossed. This is a point we explain systematically to founders, because the mechanism causes confusion. You will find this fully detailed in our complete guide to the 2026 micro-entreprise.

2026 watch points. The VAT exemption and the micro regime are two distinct things. You can be VAT-exempt without being micro, and conversely, remain micro while charging VAT after exceeding the exemption thresholds. Confusing the two leads to invoicing errors that the tax authorities can adjust.

For micro-entrepreneurs, the 2026 thresholds are confirmed at €203,100 for sales activities and €83,600 for services and non-commercial income. These thresholds frame access to the micro regime, independently of the VAT thresholds mentioned above.

A point we repeat: these micro thresholds are decoupled from the VAT exemption. A provider may well stay under the micro regime while becoming liable for VAT, once they exceed €37,500 of turnover. Management then becomes a little more demanding.

To track these thresholds without surprises, many of our self-employed clients rely on the Pennylane management tool, which shows cumulative turnover in real time.

The business-to-business e-invoicing reform applies in 2026, and very small businesses are affected sooner than they think.

1. On 1 September 2026, all VAT-registered businesses must be able to receive electronic invoices in a structured format.
2. On the same date, large companies and intermediate-sized enterprises must issue their invoices in electronic format.
3. On 1 September 2027, the issuing obligation extends to SMEs, very small businesses and micro-enterprises.

In other words, a very small business has no obligation to issue in 2026, but it must be able to receive an electronic invoice from 1 September 2026. If one of your suppliers is a large company, it will send it in this format. Without a receiving solution, you risk being unable to process or record that invoice.

In practice, here are the steps we recommend before summer 2026:

• Check your software or invoicing tool against the reform.
• Choose a compatible dematerialisation platform for receipt.
• List your main suppliers likely to issue from 2026.
• Test an initial receiving flow before the deadline.

We support this transition through our preparation for 2026 e-invoicing. The topic looks technical, but for a small business the real issue is simply not being stuck come September.

The 2026 Finance Act tightens the Dutreil pact, the scheme that reduces the tax cost of business transfers. Without going into figures, access conditions are stricter and certain non-professional assets, deemed luxury assets, are now excluded from the exemption base.

For a family-owned small business preparing a transfer, this tightening justifies revisiting the structure with an adviser. We address only the principle here: a transfer is prepared several years in advance, and a mid-course rule change can call into question a timeline already under way.

What the tax authorities look at. On dividend distributions, compliance with decision rules and the availability of profit. On VAT, consistency between the status shown on invoices and the regime actually applicable. On e-invoicing, in time, format compliance and data transmission. These checks are not specific to small businesses, but a small structure has less room to absorb an adjustment.

We regularly see invoices that still mention a VAT exemption when the increased threshold was crossed during the year. This is the most common error, and the easiest to avoid with monthly turnover monitoring.

The 2026 Finance Act is not an upheaval for very small structures, but it calls for three reflexes. First, recalibrate forecasts on a reduced corporate tax capped at €42,500, not €100,000. Then, redo the dividends-versus-salary trade-off in light of the 31.4% flat tax. Finally, do not wait until September to be able to receive an electronic invoice.

For the rest, keeping the VAT exemption and the micro thresholds offers welcome stability. This stability is also an opportunity to review your accounting obligations for small businesses, often neglected at launch, as we see in our support for the self-employed and business creation files.