VAT for French Lawyers: Rates, Exemption Threshold and 2026 Obligations

VAT compliance is not a marginal concern for a French law firm. The franchise en base (small-business VAT exemption) operates under profession-specific thresholds, VAT on fees is due on a cash basis by default, legal aid indemnities are taxable at the full rate, and mandatory e-invoicing arrives in 2026 and 2027. Each of these rules creates compliance friction when not handled correctly from the outset.

This article is written for lawyers practising in France, whether in solo practice, SELARL, SELAS or AARPI, and for international legal practices that interact with French firms or have a French establishment. For an accounting engagement tailored to your practice, see our dedicated page for law firm accountancy.

A French lawyer stays VAT-exempt while the previous year's turnover from regulated activity stays under EUR 50,000, with an in-year upper limit of EUR 55,000; other activities fall under EUR 35,000, raised to EUR 38,500. Fees are taxed at the standard 20 % rate, legal aid included. VAT is due on receipt unless the debit-basis option is elected, and mandatory e-invoice reception starts on 1 September 2026.

Lawyers' services (litigation, legal advice, drafting, representation) have been subject to the standard 20% VAT rate since 1991. There is no reduced rate applicable to legal services in France. This applies regardless of whether the client is an individual, a company, or a public body.

For a client who is a VAT-registered business, the input VAT is in principle recoverable. For a private individual or an unregistered entity, the 20% VAT is a final cost. This distinction matters for pricing decisions and fee presentations.

The franchise en base (CGI article 293 B) is a VAT exemption regime for small taxpayers who remain below a turnover ceiling. For lawyers, profession-specific thresholds apply, set out in article 293 B III of the Tax Code (CGI). These differ from the general thresholds for service providers.

2026 franchise thresholds at a glance#

Where to check. These thresholds come from article 293 B, III of the French Tax Code, commented in BOFiP BOI-TVA-DECLA-40-20, version of 1 July 2026. That is the reference to consult, not the general schedule BOI-BAREME-000036, which carries the ordinary thresholds (EUR 37,500 and EUR 41,250) and does not cover the derogatory regime for lawyers. The ceilings are revalued periodically: check the version date of the document before making any invoicing decision.

The proposal to replace all franchise thresholds with a single 25,000 € ceiling, originally floated in the 2025 Finance Bill, was definitively abandoned by Law no. 2025-1044 of 3 November 2025. The existing thresholds remain in force.

Under the franchise en base, each invoice must carry the mandatory statement: "TVA non applicable, art. 293 B du CGI" (VAT not applicable). Omitting this mention is a formal deficiency.

Our article on the franchise en base de TVA covers the general mechanics of the exemption and exit rules in detail.

Crossing the threshold mid-year: practical consequences#

Crossing the upper threshold triggers VAT liability from the date of the crossing itself, not from the first day of that month: the transaction that takes cumulative fees past EUR 55,000 is already within scope, as is every transaction after it. The lawyer must notify the tax office (SIE) immediately, charge VAT on those invoices and all subsequent ones, and file VAT returns from that point forward.

Worked example (representative case). A sole-practitioner lawyer bills EUR 42,000 in regulated legal fees between January and September 2026. On 12 October a new instruction adds EUR 15,000: cumulative fees reach EUR 57,000 and cross the upper threshold of EUR 55,000. That invoice, and every invoice after it, carries 20 % VAT, so EUR 3,000 to collect and remit on the EUR 15,000 net. Fees received under the franchise before the crossing are not retrospectively adjusted, but the mandatory exemption statement must disappear from every invoice issued from that date.

Legal aid (aide juridictionnelle, AJ) is a state-funded scheme that covers litigation costs for individuals without sufficient resources. The lawyer is appointed by the court and receives an indemnity paid by the Treasury via the CARPA (the regulated client-funds organisation managed by the bar).

These indemnities are subject to 20% VAT. The fact that the payer is the state, not a private client, does not change the applicable rate. The AJ indemnity is treated as an amount exclusive of VAT; the lawyer who is VAT-registered adds VAT at 20%, collects it, and remits it to the tax authorities. This position is confirmed by the BOFiP administrative doctrine.

This surprises some practitioners who regard legal aid work as a public-service function. Under French VAT law, the nature of the service, namely legal representation, governs the rate, not the identity or nature of the payer.

CARPA flows. The CARPA holds client funds (advance fee deposits, provisional payments, court awards) on behalf of lawyers. These flows are not revenues and are not subject to VAT. Only the lawyer's fee when crystallised constitutes a taxable supply. Confusing CARPA inflows with fee income is a recurring error that distorts the VAT base.

For services (as opposed to goods), French VAT law sets the default rule at exigibilité à l'encaissement: VAT becomes due when payment is received, not when the invoice is issued. This is the cash-accounting basis.

Cash basis vs debit-basis option#

The cash basis is the natural and cash-flow-friendly default for most law firms. Electing the debit basis may be justified where the client portfolio is predominantly VAT-registered businesses that value early input tax recovery, or in group structures. The election should be deliberate and documented.

Our article on TVA declarations covers the filing mechanics for service providers, including the distinction between simplified and normal VAT return regimes.

A retrocession is the payment by one lawyer to a colleague for work performed on a shared or referred matter. The VAT treatment is straightforward: the retrocession follows the VAT status of the lawyer who receives it.

If the recipient is VAT-registered, they issue an invoice at 20% VAT. If the recipient operates under the franchise en base, they issue a VAT-exempt invoice with the relevant exemption statement. The paying lawyer deducts the input VAT if they are themselves VAT-registered.

The most common complication arises when one party's VAT status changes, typically when a colleague crosses the franchise threshold, without the invoicing terms being updated. This creates an exposure for the firm that should have charged VAT but did not.

Disbursements (court fees, bailiff fees, registration duties, translation costs) advanced by the lawyer on the client's behalf are excluded from the VAT base, provided strict conditions are met:

• The amounts are advanced in the name and on behalf of the client (express or implied mandate).
• They are recharged at cost, without mark-up or margin.
• The lawyer retains the original supporting documents or certified copies.
• They are recorded in the accounts as a liability to the client (compte de tiers), not as income.

When these conditions are satisfied, the reimbursement of disbursements is outside the scope of VAT. If any condition fails, whether the amount recharged differs from the actual cost, documents are missing, or the amounts are bundled into fee invoices, the reimbursement becomes a taxable supply at 20%.

In our accountancy work with law firms, disbursement documentation is a systematic review point. A missing justificatory document or an incorrect accounting classification can expose the firm to a VAT reassessment on amounts that should have been out of scope.

The French e-invoicing reform applies to all VAT-registered entities established in France, including law firms. Firms operating under the franchise en base are not in scope while they remain below the threshold; the obligation applies once they become VAT-registered.

Timeline:

• 1 September 2026: mandatory receipt of e-invoices for all businesses, including sole practitioners and small firms.
• 1 September 2027: mandatory issue of e-invoices for SMEs and micro-enterprises (which covers most law firms).

Key development: the free Public Billing Portal (PPF) was abandoned on 15 October 2024. It will not be available as an emission or reception platform. All VAT-registered lawyers must therefore use an accredited Plateforme de Dématérialisation Partenaire (PDP), a certified private e-invoicing operator, to send and receive compliant invoices.

Preparation checklist for a law firm:

1. Confirm your current VAT status and project whether fee growth will trigger registration before the e-invoicing deadlines.
2. Map your invoicing flows: direct fees, retrocessions, disbursement recharges.
3. Select and contract with an accredited PDP suited to your volume and software environment.
4. Upgrade billing software to produce structured invoice formats (Factur-X, UBL, or CII).
5. Collect SIRET numbers for all professional clients (required for the e-invoicing directory).
6. Train the staff responsible for billing and accounting.
7. Test e-invoice reception before 1 September 2026.

The Conseil national des barreaux (CNB) publishes guidance for the legal profession on this transition. Our article on e-invoicing obligations 2026 covers the broader reform framework and operational steps.

Year-end VAT review for a law firm goes beyond reading the CA3 or CA12 declarations. A structured close-out should cover:

• Reconciliation of cash receipts (VAT base) with accounting turnover: any gap needs explanation.
• Confirmation that disbursements are separated from fees and fully documented.
• Verification that legal aid indemnities are included in the VAT base at 20%.
• Consistency check on retrocessions: sender and recipient regimes aligned.
• Confirmation that advance fee payments (acomptes) generated VAT in the correct period.
• Invoice format review: mandatory fields, correct rate, HT base, TVA amount.
• For franchise firms: confirm the threshold has not been exceeded and the exemption statement appears on all invoices.

Where we work with law firms on accounting and review engagements, these points form the standard VAT control framework. A firm that captures each flow correctly at source avoids the reconstruction work that becomes necessary when issues surface only at year-end.

For broader guidance on liberal-profession accounting, see our article on comptabilité profession libérale and our tax advisory service in Paris.

Up to date as of 26 August 2026. This article provides information only and does not replace personalised advice. The thresholds specific to lawyers are commented in BOFiP BOI-TVA-DECLA-40-20 and are revalued periodically: check the version in force at the date of your decision. For your specific situation, contact a registered expert-comptable.