VAT exemption
Verified 01 January 2023 - Legal and Administrative Information Directorate (Prime Minister), Ministry of Finance
The exemption on the basis of VAT exempts the companies of the declaration and payment of VAT on the supplies or sales they make. This tax regime applies to all companies whose turnover in the previous year does not exceed certain thresholds.
Metropolis
In order to benefit from the VAT exemption system, your turnover must not exceed certain thresholds. These thresholds are different depending on the activity you are engaged in.
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Commercial and accommodation activity
To be eligible for the VAT exemption, you must be in one of the following situations:
- Your sales for the previous calendar year must not exceed €91,900
- Your sales for the second to last calendar year must not exceed €91,900 and that of the preceding calendar year shall not exceed €101,000
- Your sales for the current calendar year must not exceed €101,000. If you exceed this threshold, you will have to pay VAT on 1er day of the month of overrun
If you have just started your business, you need to adjust your revenue for the year of creation based on your operating time to determine whether you can claim the VAT exemption the following year.
Example :
You've had sales of €82,000 in 2022, you can benefit from the VAT-based exemption in 2023, because your turnover is less than €91,900.
In addition, if the same trader achieves a turnover of €95,500, he will be eligible for the VAT exemption in 2024. He will be able to benefit from it because his 2022 revenue was below the €91,900 and its 2022 revenue was less than €101,000.
However, if you started your business on May 14, 2022, and you had revenue of €82,000 between may 14, 2022 and december 31, 2022, you will calculate your 2022 revenue pro-rated to your operating time. So for the year 2022, your revenue calculated pro rata to the operating time is equal to (€82,000 x 365)/232 = €129,009. Your pro-rated revenue is greater than €91,900, so you cannot benefit from the VAT exemption in 2023.
Service Delivery Activity
To be eligible for the VAT exemption, you must be in one of the following situations:
- Your sales for the previous calendar year must not exceed €36,800
- Your sales for the second to last calendar year must not exceed €36,800 and that of the preceding calendar year shall not exceed €39,100
- Your sales for the current calendar year must not exceed €39,100. If you exceed this threshold, you will have to pay VAT on 1er day of the month of overrun
If you have just started your business, you need to adjust your revenue for the year of creation based on your operating time to determine whether you can claim the VAT exemption the following year.
Example :
You've had sales of €24,000 in 2022, it is less than €36,800 so you can benefit from the VAT exemption in 2023.
In addition, if you have a 2023 revenue of €38,500, you can benefit from the VAT exemption in 2024 because your 2022 turnover was below the threshold of €36,800 and your 2023 revenue is less than €39,100.
However, if you started your business on May 14, 2022, and you had revenue of €24,000 between may 14, 2022 and december 31, 2022, you will calculate your 2022 revenue pro-rated to your operating time. So for the year 2022, your revenue calculated pro rata to the operating time is equal to (€24,000 x 365)/232 = €37,759. Your pro-rated revenue is greater than €36,800, so you cannot benefit from the VAT exemption in 2023.
Liberal activity (except lawyer)
To be eligible for the VAT exemption, you must be in one of the following situations:
- Your sales for the previous calendar year must not exceed €36,800
- Your sales for the second to last calendar year must not exceed €36,800 and that of the preceding calendar year shall not exceed €39,100
- Your sales for the current calendar year must not exceed €39,100. If you exceed this threshold, you will have to pay VAT on 1er day of the month of overrun
If you have just started your business, you need to adjust your revenue for the year of creation based on your operating time to determine whether you can claim the VAT exemption the following year.
Example :
You've had sales of €24,000 in 2022, it is less than €36,800 so you can benefit from the VAT exemption in 2023.
In addition, if you have a 2023 revenue of €38,500, you can benefit from the VAT exemption in 2024 because your 2022 turnover was below the threshold of €36,800 and your 2023 revenue is less than €39,100.
However, if you started your business on May 14, 2022, and you had revenue of €24,000 between may 14, 2022 and december 31, 2022, you will calculate your 2022 revenue pro-rated to your operating time. So for the year 2022, your revenue calculated pro rata to the operating time is equal to (€24,000 x 365)/232 = €37,759. Your pro-rated revenue is greater than €36,800, so you cannot benefit from the VAT exemption in 2023.
Lawyer
For your regulated activities:
To be eligible for the VAT exemption, you must be in one of the following situations:
- Your sales for the previous calendar year must not exceed €47,600
- Your sales for the second to last calendar year must not exceed €47,600 and that of the preceding calendar year shall not exceed €58,600
- Your sales for the current calendar year must not exceed €58,600. If you exceed this threshold, you will have to pay VAT on 1er day of the month of overrun
If you have just started your business, you need to adjust your revenue for the year of creation based on your operating time to determine whether you can claim the VAT exemption the following year.
For your non-regulated activities:
To be eligible for the VAT exemption, you must be in one of the following situations:
- Your sales for the previous calendar year must not exceed €19,600
- Your sales for the second to last calendar year must not exceed €19,600 and that of the preceding calendar year shall not exceed €23,700
- Your sales for the current calendar year must not exceed €23,700. If you exceed this threshold, you will have to pay VAT on 1er day of the month of overrun
If you have just started your business, you need to adjust your revenue for the year of creation based on your operating time to determine whether you can claim the VAT exemption the following year.
Example :
You've had sales of €13,000 for your regulated activities in 2022 can benefit from the VAT-based exemption in 2023, as its turnover is less than €19,600.
However, if you started your business on May 14, 2022, and you had revenue of €13,000 between may 14, 2022 and december 31, 2022, you will calculate your 2022 revenue pro-rated to your operating time. So for the year 2022, your revenue calculated pro rata to the operating time is equal to (€12,000 x 365)/232 = €20,453. Your pro-rated revenue is greater than €19,600, so you cannot benefit from the VAT exemption in 2023.
Artist-author and performer
For your work delivery and copyright assignment activities:
This mainly concerns the following revenues:
- Income of performers
- Income of artists who have renounced withholding tax
- Other income than fees paid by publishers (e.g. ancillary income)
To be eligible for the VAT exemption, you must be in one of the following situations:
- Your sales for the previous calendar year must not exceed €47,600
- Your sales for the second to last calendar year must not exceed €47,600 and that of the preceding calendar year shall not exceed €58,600
- Your sales for the current calendar year must not exceed €58,600. If you exceed this threshold, you will have to pay VAT on 1er day of the month of overrun
If you have just started your business, you need to adjust your revenue for the year of creation based on your operating time to determine whether you can claim the VAT exemption the following year.
For your other activities:
To be eligible for the VAT exemption, you must be in one of the following situations:
- Your sales for the previous calendar year must not exceed €19,600
- Your sales for the second to last calendar year must not exceed €19,600 and that of the preceding calendar year shall not exceed €23,700
- Your sales for the current calendar year must not exceed €23,700. If you exceed this threshold, you will have to pay VAT on 1er day of the month of overrun
If you have just started your business, you need to adjust your revenue for the year of creation based on your operating time to determine whether you can claim the VAT exemption the following year.
Example :
You've had sales of €13,000 for your regulated activities in 2022 can benefit from the VAT-based exemption in 2023, as its turnover is less than €19,600.
However, if you started your business on May 14, 2022, and you had revenue of €13,000 between may 14, 2022 and december 31, 2022, you will calculate your 2022 revenue pro-rated to your operating time. So for the year 2022, your revenue calculated pro rata to the operating time is equal to (€12,000 x 365)/232 = €20,453. Your pro-rated revenue is greater than €19,600, so you cannot benefit from the VAT exemption in 2023.
As a trader covered by the duty-free allowance, you have to invoice your services or sales tax-free.
The mention VAT not applicable - Article 293b of CGI: titleContent must appear on each invoice.
VAT cannot therefore be deducted or recovered from purchases of goods and services made for the activity.
You can, however, waive the basic exemption by opting to pay VAT to the tax department of the companies on which you depend. You can contact them by e-mail on your professional account of the website taxes.gouv.fr:
Online tax account for professionals (EFI mode)
FYI
the payment of VAT-free purchases delivered outside the EU is 90 days at the latest. This period must be specified in the contract of sale.
Commercial and accommodation activity
If the thresholds are exceeded, you will continue to benefit from the VAT exemption in the year of the excess unless your turnover exceeds €101,000.
If you exceed this tolerance threshold, you will no longer benefit from the VAT exemption scheme as of 1er the day of the month following the month in which the excess occurred.
Example :
If you have a turnover of €96,700 in 2022, you were able to benefit from the VAT-based exemption until the end of 2022 because you did not exceed the €101,000.
Service Delivery Activity
If the thresholds are exceeded, you will continue to benefit from the VAT exemption in the year of the excess unless your turnover exceeds €39,100.
If you exceed this tolerance threshold, you will no longer benefit from the VAT exemption scheme as of 1er the day of the month following the month in which the excess occurred.
Example :
If you have a turnover of €38,700 in 2022, you were able to benefit from the VAT-based exemption until the end of 2022 because you did not exceed the €39,100.
Liberal activity (except lawyer)
If the thresholds are exceeded, you will continue to benefit from the VAT exemption in the year of the excess unless your turnover exceeds €39,100.
If you exceed this tolerance threshold, you will no longer benefit from the VAT exemption scheme as of 1er the day of the month following the month in which the excess occurred.
Example :
If you have a turnover of €38,700 in 2022, you were able to benefit from the VAT-based exemption until the end of 2022 because you did not exceed the €39,100.
Lawyers
The duty-free regime ceases to apply when your current year's revenues from your regulated activities exceed€58,600.
Exceeding the turnover threshold of €23,700for your non-regulated activities as lawyers does not affect the application of the VAT exemption scheme for your regulated activities.
Example :
You've had sales of €56,700 for your regulated activities in 2022 cannot benefit from the VAT exemption in 2021 because it exceeded the threshold of €58,600.
Authors and performers
The duty-free arrangements shall cease to apply where the turnover for the current year exceeds €58,600 for the activities of delivery of your works (authors) and assignment of your rights (performers).
Exceeding the threshold of €23,700 for your other activities has no effect on the application of the VAT exemption regime for the supply of your works and the assignment of your rights.
Example :
You've had sales of €56,700 for your work delivery and copyright assignment activities in 2022. You have exceeded the €58,600 so you can no longer benefit from the VAT exemption scheme in 2023.
The withdrawal of the exemption from VAT shall have the following effects:
- VAT assessment of transactions made on or after 1er day of the month in which the overrun occurred
- Transactions carried out from the month in which the VAT was exceeded and which were not subject to VAT must be the subject of amending invoices
- The right to deduction of VAT may be charged on expenditure incurred as soon as the trader becomes liable for VAT
The professional must obtain his intra-Community VAT number and indicate it on its invoices and add VAT. To obtain your intra-Community VAT number, you must contact your company tax department on your business account on the website taxes.gouv.fr and inform them about your departure from the VAT exemption system:
Online tax account for professionals (EFI mode)
Receipts of services performed before 1er the day of the month in which the taxable person becomes liable for VAT and need not be subject to VAT. This is the case even if they are carried out after the amendment of the scheme.
Guadeloupe, Martinique, Réunion
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Commercial and accommodation activity
To be eligible for the VAT exemption, you must be in one of the following situations:
- Your sales for the previous calendar year must not exceed €100,000
- Your sales for the second to last calendar year must not exceed €100,000 and that of the preceding calendar year shall not exceed €110,000
- Your sales for the current calendar year must not exceed €110,000. If you exceed this threshold, you will have to pay VAT on 1er day of the month of overrun
If you have just started your business, you need to adjust your revenue for the year of creation based on your operating time to determine whether you can claim the VAT exemption the following year.
Example :
You've had sales of €82,000 in 2022, you can benefit from the VAT-based exemption in 2023, because your turnover is less than €100,000.
In addition, if the same trader achieves a turnover of €108,500, he will be eligible for the VAT exemption in 2024. He will be able to benefit from it because his 2022 revenue was below the €100,000 and its 2022 revenue was less than €100,000.
However, if you started your business on May 14, 2022, and you had revenue of €82,000 between may 14, 2022 and december 31, 2022, you will calculate your 2022 revenue pro-rated to your operating time. So for the year 2022, your revenue calculated pro rata to the operating time is equal to (€82,000 x 365)/232 = €129,009. Your pro-rated revenue is greater than €100,000, so you cannot benefit from the VAT exemption in 2023.
Service Delivery Activity
To be eligible for the VAT exemption, you must be in one of the following situations:
- Your sales for the previous calendar year must not exceed €50,000
- Your sales for the second to last calendar year must not exceed €50,000 and that of the preceding calendar year shall not exceed €60,000
- Your sales for the current calendar year must not exceed €60,000. If you exceed this threshold, you will have to pay VAT on 1er day of the month of overrun
If you have just started your business, you need to adjust your revenue for the year of creation based on your operating time to determine whether you can claim the VAT exemption the following year.
Example :
You've had sales of €47,000 in 2022, you can benefit from the VAT-based exemption in 2023, because your turnover is less than €50,000.
In addition, if the same trader achieves a turnover of €58,500, he will be eligible for the VAT exemption in 2024. He will be able to benefit from it because his 2022 revenue was below the €50,000 and its 2022 revenue was less than €60,000.
However, if you started your business on May 14, 2022, and you had revenue of €47,000 between may 14, 2022 and december 31, 2022, you will calculate your 2022 revenue pro-rated to your operating time. So for the year 2022, your revenue calculated pro rata to the operating time is equal to (€82,000 x 365)/232 = €129,009. Your pro-rated revenue is greater than €50,000, so you cannot benefit from the VAT exemption in 2023.
Activity of a liberal (non-lawyer)
To be eligible for the VAT exemption, you must be in one of the following situations:
- Your sales for the previous calendar year must not exceed €50,000
- Your sales for the second to last calendar year must not exceed €50,000 and that of the preceding calendar year shall not exceed €60,000
- Your sales for the current calendar year must not exceed €60,000. If you exceed this threshold, you will have to pay VAT on 1er day of the month of overrun
If you have just started your business, you need to adjust your revenue for the year of creation based on your operating time to determine whether you can claim the VAT exemption the following year.
Example :
You've had sales of €47,000 in 2022, you can benefit from the VAT-based exemption in 2023, because your turnover is less than €50,000.
In addition, if the same trader achieves a turnover of €58,500, he will be eligible for the VAT exemption in 2024. He will be able to benefit from it because his 2022 revenue was below the €50,000 and its 2022 revenue was less than €60,000.
However, if you started your business on May 14, 2022, and you had revenue of €47,000 between may 14, 2022 and december 31, 2022, you will calculate your 2022 revenue pro-rated to your operating time. So for the year 2022, your revenue calculated pro rata to the operating time is equal to (€82,000 x 365)/232 = €129,009. Your pro-rated revenue is greater than €50,000, so you cannot benefit from the VAT exemption in 2023.
Lawyer
For your regulated activities:
To be eligible for the VAT exemption, you must be in one of the following situations:
- Your sales for the previous calendar year must not exceed €47,600
- Your sales for the second to last calendar year must not exceed €47,600 and that of the preceding calendar year shall not exceed €58,600
- Your sales for the current calendar year must not exceed €58,600. If you exceed this threshold, you will have to pay VAT on 1er day of the month of overrun
If you have just started your business, you need to adjust your revenue for the year of creation based on your operating time to determine whether you can claim the VAT exemption the following year.
For your non-regulated activities:
To be eligible for the VAT exemption, you must be in one of the following situations:
- Your sales for the previous calendar year must not exceed €47,600
- Your sales for the second to last calendar year must not exceed €47,600 and that of the preceding calendar year shall not exceed €58,600
- Your sales for the current calendar year must not exceed €58,600. If you exceed this threshold, you will have to pay VAT on 1er day of the month of overrun
If you have just started your business, you need to adjust your revenue for the year of creation based on your operating time to determine whether you can claim the VAT exemption the following year.
Example :
You've had sales of €42,000 for your regulated activities in 2022 can benefit from the VAT-based exemption in 2023, as its turnover is less than€47,600.
However, if you started your business on May 14, 2022, and you had revenue of €42,000 between may 14, 2022 and december 31, 2022, you will calculate your 2022 revenue pro-rated to your operating time. So for the year 2022, your revenue calculated pro rata to the operating time is equal to (€42,000 x 365)/232 = €66,078. Your pro-rated revenue is greater than €47,600, so you cannot benefit from the VAT exemption in 2023.
Artist-author and performer
For your work delivery and copyright assignment activities:
This mainly concerns the following revenues:
- Income of performers
- Income of artists who have renounced withholding tax
- Other income than fees paid by publishers (e.g. ancillary income)
To be eligible for the VAT exemption, you must be in one of the following situations:
- Your sales for the previous calendar year must not exceed €47,600
- Your sales for the second to last calendar year must not exceed €47,600 and that of the preceding calendar year shall not exceed €58,600
- Your sales for the current calendar year must not exceed €58,600. If you exceed this threshold, you will have to pay VAT on 1er day of the month of overrun
If you have just started your business, you need to adjust your revenue for the year of creation based on your operating time to determine whether you can claim the VAT exemption the following year.
For your other activities:
To be eligible for the VAT exemption, you must be in one of the following situations:
- Your sales for the previous calendar year must not exceed €47,600
- Your sales for the second to last calendar year must not exceed €47,600 and that of the preceding calendar year shall not exceed €58,600
- Your sales for the current calendar year must not exceed €58,600. If you exceed this threshold, you will have to pay VAT on 1er day of the month of overrun
If you have just started your business, you need to adjust your revenue for the year of creation based on your operating time to determine whether you can claim the VAT exemption the following year.
Example :
You've had sales of €42,000 for your regulated activities in 2022 can benefit from the VAT-based exemption in 2023, as its turnover is less than€47,600.
However, if you started your business on May 14, 2022, and you had revenue of €42,000 between may 14, 2022 and december 31, 2022, you will calculate your 2022 revenue pro-rated to your operating time. So for the year 2022, your revenue calculated pro rata to the operating time is equal to (€42,000 x 365)/232 = €66,078. Your pro-rated revenue is greater than €47,600, so you cannot benefit from the VAT exemption in 2023.
As a trader covered by the duty-free allowance, you have to invoice your services or sales tax-free.
The mention VAT not applicable - Article 293b of CGI: titleContent must appear on each invoice.
VAT cannot therefore be deducted or recovered from purchases of goods and services made for the activity.
You can, however, waive the basic exemption by opting to pay VAT to the tax department of the companies on which you depend. You can contact them by e-mail on your professional account of the website taxes.gouv.fr:
Online tax account for professionals (EFI mode)
FYI
the payment of VAT-free purchases delivered outside the EU is 90 days at the latest. This period must be specified in the contract of sale.
Commercial and accommodation activity
If the thresholds are exceeded, you will continue to benefit from the VAT exemption in the year of the excess unless your turnover exceeds€110,000 .
If you exceed this tolerance threshold, you will no longer benefit from the VAT exemption scheme as of 1er the day of the month following the month in which the excess occurred.
Example :
If you have a turnover of €106,700 in 2022, you were able to benefit from the VAT-based exemption until the end of 2022 because you did not exceed the €110,000.
Service Delivery Activity
If the thresholds are exceeded, you will continue to benefit from the VAT exemption in the year of the excess unless your turnover exceeds €60,000.
If you exceed this tolerance threshold, you will no longer benefit from the VAT exemption scheme as of 1er the day of the month following the month in which the excess occurred.
Example :
If you have a turnover of €59,700 in 2022, you were able to benefit from the VAT-based exemption until the end of 2022 because you did not exceed the €60,000.
Liberal activity (except lawyer)
If the thresholds are exceeded, you will continue to benefit from the VAT exemption in the year of the excess unless your turnover exceeds €60,000.
If you exceed this tolerance threshold, you will no longer benefit from the VAT exemption scheme as of 1er the day of the month following the month in which the excess occurred.
Example :
If you have a turnover of €40,700 in 2022, you were able to benefit from the VAT-based exemption until the end of 2022 because you did not exceed the €60,000.
Lawyers
The duty-free regime ceases to apply when your current year's revenues from your regulated activities exceed€58,600.
Exceeding the turnover threshold of €23,700for your non-regulated activities as lawyers does not affect the application of the VAT exemption scheme for your regulated activities.
Example :
You've had sales of €56,700 for your regulated activities in 2022 cannot benefit from the VAT exemption in 2021 because it exceeded the threshold of €58,600.
Authors and performers
The duty-free arrangements shall cease to apply where the turnover for the current year exceeds €58,600 for the activities of delivery of your works (authors) and assignment of your rights (performers).
Exceeding the threshold of €23,700 for your other activities has no effect on the application of the VAT exemption regime for the supply of your works and the assignment of your rights.
Example :
You've had sales of €56,700 for your work delivery and copyright assignment activities in 2022. You have exceeded the €58,600 so you can no longer benefit from the VAT exemption scheme in 2023.
The withdrawal of the exemption from VAT shall have the following effects:
- VAT assessment of transactions made on or after 1er day of the month in which the overrun occurred
- Transactions carried out from the month in which the VAT was exceeded and which were not subject to VAT must be the subject of amending invoices
- The right to deduction of VAT may be charged on expenditure incurred as soon as the trader becomes liable for VAT
The professional must obtain his intra-Community VAT number and indicate it on its invoices and add VAT. To obtain your intra-Community VAT number, you must contact your company tax department on your business account on the website taxes.gouv.fr and inform them about your departure from the VAT exemption system:
Online tax account for professionals (EFI mode)
Receipts of services performed before 1er the day of the month in which the taxable person becomes liable for VAT and need not be subject to VAT. This is the case even if they are carried out after the amendment of the scheme.
- Bofip-Taxes n°BOI-VAT-DECLA-40 relating to VAT exemption schemesMinistry of Finance
- Three-yearly update of the VAT exemption thresholdsMinistry of Finance