Micro-Entrepreneur and VAT: What Happens When You Exceed the Threshold?

Quick Answer. As long as your turnover stays below the VAT franchise threshold — €37,500 for services, €85,000 for sales of goods — you charge no VAT. As soon as you cross the increased threshold (€41,250 for services, €93,500 for sales), you become liable for VAT from the exact date of the overrun. Since 2025, these VAT thresholds are decoupled from the micro-business turnover ceilings.

The micro-entrepreneur status is popular for its simplicity, but VAT remains one of its most misunderstood aspects. Many founders confuse the ceiling that allows them to remain under the micro regime with the threshold above which they must charge VAT. Since 2025, these two thresholds are legally separate. The plan for a single €25,000 franchise threshold, considered in late 2024, was suspended and then abandoned: the law of 3 November 2025 maintained the thresholds of €37,500 (services) and €85,000 (sales of goods). At Hayot Expertise, we support dozens of micro-entrepreneurs every year as they approach these thresholds and must anticipate the move to VAT without eroding their margin.

The VAT franchise (franchise en base) is a regime that exempts you from declaring and paying VAT. In practice, a micro-entrepreneur under the franchise:

• does not charge VAT to clients (invoices carry the note "TVA non applicable, article 293 B du CGI");
• cannot reclaim VAT on purchases and investments;
• has no VAT return to file.

This is an advantage in simplicity and a commercial edge with private individuals: the displayed price is the price paid. In exchange, all input VAT remains a definitive cost, which weighs heavily on activities with high spending (goods, equipment, subcontracting).

Since 2025, exceeding the micro regime ceiling and leaving the VAT franchise follow different thresholds.

In other words, you can remain a micro-entrepreneur while being liable for VAT. A service provider with €60,000 of turnover keeps the micro regime (below €77,700) but charges VAT (above €41,250). This is precisely the situation that surprises most founders.

It all depends on which threshold is crossed:

1. You exceed the base threshold without crossing the increased threshold (for example, a service provider between €37,500 and €41,250): the franchise is maintained for the year of the overrun. You only become liable for VAT on 1 January of the following year, once the base threshold overrun is confirmed.
2. You cross the increased threshold during the year (above €41,250 for services or €93,500 for sales): the franchise ends immediately. You become liable for VAT from the exact date of the overrun. All transactions carried out from that day are subject to VAT.

This point is decisive: above the increased threshold, it is not the whole year that switches, but the transactions carried out from the date the threshold is crossed.

1. Report the overrun to your business tax office (SIE). This first step triggers your move to the standard VAT regime.
2. Request your intra-community VAT number. It becomes mandatory and must appear on your invoices.
3. Invoice your transactions with VAT from the date of the overrun, at the applicable rate (20% in most cases).
4. Choose your filing regime: simplified real regime (annual CA12 return) or standard real regime (monthly or quarterly CA3 return), depending on your turnover.
5. Reclaim deductible VAT on your purchases, expenses and business investments: this is the favourable counterpart of moving to VAT.

• Mixed activities (sales + services): each category is assessed with its own thresholds. Keep separate accounts for the two flows to track each threshold individually.
• Services to EU business clients: the French franchise does not override territoriality rules. An intra-community B2B service is often subject to reverse charge by the customer; this is a separate analysis from the domestic franchise.
• First year of activity: thresholds are not prorated for the VAT franchise; you monitor the increased threshold as you go, month by month.

1. Monitor the increased threshold in real time, not only at year-end: it is the one that triggers the immediate switch.
2. Anticipate the price impact. For a clientele of private individuals, adding 20% VAT can weigh on competitiveness; for business clients, VAT is neutral because they reclaim it.
3. Do not forget the note "TVA non applicable, article 293 B du CGI" on invoices while you remain under the franchise.
4. Keep purchase receipts as you approach the threshold: deductible VAT can be reclaimed from the date you leave the franchise.
5. Do not confuse the micro ceiling with the VAT threshold — the most common mistake since the 2025 decoupling.

Recently, a communications consultant contacted us urgently: her turnover had passed €41,250 in October, and she feared having to "repay" VAT on her entire annual turnover. We reassured her: only the services invoiced from the date of the overrun were affected, not the earlier months. We regularised the situation by issuing VAT invoices for subsequent transactions, activated her VAT number and reclaimed VAT on her equipment purchases — which partly offset the additional cost.

Our conviction is simple: moving to VAT is not a penalty, it is a stage of growth. Well anticipated, it opens deduction rights and professionalises the relationship with business clients. The real risk is not VAT itself, but an unprepared overrun that forces you to reconstruct invoices and justify a price increase to clients after the fact.

Hayot Expertise Guidance. As soon as your turnover reaches 80% of the increased threshold, prepare the switch: simulate the impact on your prices, identify the reclaimable deductible VAT and choose your filing regime. It is better to activate VAT one month early, in control, than to suffer it mid-month. We set up this VAT threshold monitoring for our micro-entrepreneur clients; for a review of your situation, reach out to us.