VAT Not Applicable – Article 293B of the CGI: Rules, Thresholds and Invoicing in 2027

article 293b.The VAT exemption scheme, officially known as the franchise en base de TVA, allows eligible professionals to carry out their activities without charging VAT to their customers. They are therefore exempt from collecting and paying VAT on their taxable sales, while they generally cannot recover the VAT paid on their business purchases.

This regime is governed by Article 293 B of the French General Tax Code (CGI). This is why invoices issued by businesses benefiting from the franchise commonly contain the statement:

“TVA non applicable – article 293 B du CGI”

Who can benefit from this regime? What are the applicable turnover thresholds? What happens when the thresholds are exceeded? And can a business voluntarily choose to charge VAT?

Here is everything you need to know about VAT not applicable under Article 293B of the CGI, with the rules updated for 2026.

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What Is VAT Not Applicable Under Article 293B of the CGI?

VAT Not Applicable or VAT Exemption?

The expression “VAT not applicable” generally refers to the application of the franchise en base de TVA by a business that meets the relevant conditions.

The system is designed to simplify VAT obligations for smaller businesses. When the conditions are satisfied, the business does not charge VAT to its customers and does not have to pay the VAT corresponding to its French taxable transactions.

In practice, businesses benefiting from the franchise invoice their customers excluding VAT (HT).

However, there is an important consequence: the business generally cannot deduct or recover the VAT paid on its purchases and investments. VAT paid to suppliers therefore represents a cost for the business rather than recoverable VAT.

The franchise en base is available regardless of the legal form of the business, provided the applicable conditions are satisfied. It can therefore concern companies, sole traders, artisans, professionals and micro-entrepreneurs.

Important 2026 clarification

The franchise en base is not limited exclusively to micro-entrepreneurs. A business can benefit from the regime depending on its turnover and activity, regardless of its tax regime or legal form.

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What Is Article 293B of the CGI?

Article 293 B of the French General Tax Code (CGI) establishes the main franchise en base de TVA regime.

Its objective is to simplify VAT compliance for businesses whose turnover remains below specified thresholds.

Businesses benefiting from the regime:

• Do not charge VAT on their qualifying French sales or services
• Do not pay collected VAT to the French tax authorities
• Generally do not submit ordinary VAT declarations for those transactions
• Cannot deduct VAT paid on business purchases
• Must include the appropriate “TVA non applicable – article 293 B du CGI” wording on their invoices when the franchise applies

The detailed rules of the franchise are set out in Articles 293 B to 293 F of the CGI.

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Conditions for VAT Not Applicable Under Article 293B

The turnover limits depend on the type of activity.

For 2026, the principal thresholds maintained under the current rules are:

Commercial Activities, Sales and Accommodation

For:

• Sales of goods
• Sales for consumption on the premises
• Certain accommodation activities
• Other activities falling within the corresponding category

the thresholds are:

• €85,000 HT: turnover threshold based on the previous calendar year
• €93,500 HT: threshold based on turnover for the current calendar year

Service Providers

For many other service activities, the thresholds are:

• €37,500 HT: threshold based on the previous calendar year
• €41,250 HT: threshold based on turnover for the current calendar year

Lawyers, Authors and Artists

Specific thresholds apply to certain activities carried out by:

• Lawyers
• Authors of intellectual works
• Performing artists

For the relevant specific activities, the threshold is €50,000 HT, with a current-year threshold of €55,000 HT.

For other activities carried out by lawyers, authors and performing artists, different thresholds of €35,000 HT and €38,500 HT apply.

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Commercial and Accommodation Activities

For activities falling within the €85,000 / €93,500 category, the basic framework can be summarized as follows:

The exact consequences depend on whether the relevant threshold concerns the previous calendar year or the current calendar year.

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Service Providers

For many service activities, the corresponding thresholds are:

The distinction between the previous-year threshold and the current-year threshold is important when determining whether the franchise continues to apply.

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Liberal Professions

Article 293B provides specific rules for certain liberal professions.

For example:

• Lawyers: specific threshold of €50,000 HT, with a current-year threshold of €55,000 for the relevant activities
• Other liberal professions: generally the service-provider thresholds of €37,500 HT / €41,250 HT apply

Certain professions benefit from specific provisions, so the activity actually performed must be considered rather than applying a single threshold to every liberal profession.

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Authors and Performing Artists

Authors and performing artists are also covered by specific provisions under the franchise en base.

For the relevant activities, the threshold is:

• €50,000 HT based on the previous calendar year
• €55,000 HT based on the current calendar year

Other activities carried out by these professionals can be subject to the lower €35,000 / €38,500 thresholds.

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What Happened to the €25,000 VAT Threshold?

This is particularly important when updating an older article.

The 2025 Finance Law initially introduced a reform designed to establish a single €25,000 turnover threshold for the VAT franchise. This created considerable uncertainty for micro-entrepreneurs and small businesses.

However, the government suspended the implementation of the reform in April 2025.

The subsequent legislation ultimately removed the 2025 reform and maintained the existing VAT franchise thresholds.

Therefore, an article stating that the €25,000 threshold automatically applies in 2026 would be outdated. The current thresholds remain:

• €85,000 / €93,500 for the main sales, goods and accommodation category
• €37,500 / €41,250 for many services
• €50,000 / €55,000 for certain activities of lawyers, authors and artists
• €35,000 / €38,500 for other activities of lawyers, authors and artists

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What Happens If the VAT Thresholds Are Exceeded?

Exceeding a VAT franchise threshold does not always have the same consequence in every situation.

Under the current rules, when the applicable current-year ceiling is exceeded, the franchise ends for transactions carried out from the date of the exceedance.

This means that a business should monitor its turnover throughout the year rather than waiting until the end of the accounting period.

Once the business becomes liable for VAT, it must generally:

• Start charging VAT where applicable
• Include VAT on its invoices
• Declare the VAT according to the applicable VAT regime
• Pay the VAT collected to the French tax authorities
• Recover deductible VAT on eligible business purchases, subject to the normal rules

What about invoices issued without VAT?

If a business becomes liable for VAT but continues to issue invoices without VAT, the invoices may need to be corrected.

The business should therefore identify the exact date on which the franchise ceased to apply and regularize invoices where necessary.

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How to Exit the VAT Exemption Regime Voluntarily

A business does not necessarily have to wait until it exceeds the applicable threshold before becoming subject to VAT.

A business benefiting from the franchise can voluntarily opt to pay VAT.

This can be useful, for example, where the business has substantial investments or operating expenses and wants to recover deductible VAT.

The option takes effect from the first day of the month in which the option is exercised. It is generally maintained for the applicable option period and is then renewed by tacit renewal unless it is terminated under the applicable rules.

The request is made to the business’s Service des Impôts des Entreprises (SIE).

Why voluntarily opt for VAT?

The franchise can be attractive for a small business with limited expenses.

However, charging VAT can become financially interesting when a business has significant:

• Equipment purchases
• Professional investments
• Office expenses
• Subcontracting costs
• Business services
• Other purchases carrying deductible VAT

The choice should therefore be made according to the business’s specific circumstances rather than simply based on turnover.

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Billing Under VAT Not Applicable – Article 293B

Businesses benefiting from the franchise en base must include the appropriate statement on their invoices.

The standard wording is:

“TVA non applicable – article 293 B du CGI”

This informs the customer that VAT has not been charged because the business benefits from the French VAT franchise.

How should the invoice be presented?

Under the franchise:

• The price is invoiced excluding VAT (HT)
• VAT is not added to the customer’s invoice
• The invoice should contain the Article 293 B statement
• The business generally cannot recover VAT paid on its purchases

For example, if a freelancer subject to the franchise charges a client €1,000, the invoice can show:

Total to pay: €1,000

rather than:

€1,000 HT + €200 VAT = €1,200 TTC

because the freelancer is not charging VAT under the franchise.

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“VAT Not Applicable” Does Not Mean “No VAT Exists”

This distinction is important.

A business under the franchise en base is not charging VAT to its customers, but that does not mean VAT disappears from its business expenses.

If the business purchases equipment for €1,200 including €200 VAT, the €200 VAT is generally not recoverablewhile the business remains under the franchise.

The VAT therefore becomes part of the cost of the purchase.

This is one of the principal trade-offs of the regime: less VAT administration in exchange for no recovery of input VAT.

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VAT Not Applicable and Micro-Entrepreneurs

The wording “TVA non applicable – article 293 B du CGI” is particularly common among micro-entrepreneurs.

However, being a micro-entrepreneur and benefiting from the VAT franchise are two separate concepts.

A micro-entrepreneur can become liable for VAT if the relevant VAT thresholds are exceeded, even though the business may continue to benefit from the micro-business tax or social regime under its own applicable conditions.

Conversely, the VAT franchise can apply to businesses that are not micro-entrepreneurs.

The correct question is therefore not simply:

“Am I a micro-entrepreneur?”

but rather:

“Does my turnover and activity allow me to benefit from the VAT franchise?”

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VAT Franchise and International Transactions:article 293b

Businesses working with customers or suppliers in other European Union countries need to pay particular attention to the VAT rules.

A business benefiting from the French VAT franchise can still have VAT identification and reporting obligations for certain intra-EU transactions.

For example, a French business under the franchise may need a VAT identification number when:

• Providing certain services to a business established in another EU country
• Purchasing goods from another EU country above the applicable threshold
• Carrying out certain other intra-EU transactions

The fact that a business is under the franchise does not automatically eliminate every VAT obligation in cross-border transactions.

This is especially important for freelancers, consultants, digital businesses and international service providers.

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VAT Franchise: An Important 2026 Change to Keep in Mind

Although the €25,000 reform was removed, businesses should also look beyond 2026.

The French government has confirmed that, under the 2025 Finance Law, the simplified VAT regime is scheduled to be abolished from 1 January 2027.

From that date, businesses that are no longer eligible for the franchise will generally fall under the real normal VAT regime, with monthly or quarterly VAT returns depending on their situation.

This makes it particularly important for businesses approaching the franchise thresholds to anticipate their future VAT obligations.

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FAQ – VAT Not Applicable Article 293B

What is the VAT exemption scheme?

The franchise en base de TVA is a French tax regime that allows eligible businesses to avoid charging and paying VAT on their qualifying transactions when their turnover remains within the applicable limits.

In return, the business generally cannot recover VAT on its purchases.

Can I refuse Article 293B?

Yes.

A business eligible for the franchise can voluntarily opt to become liable for VAT.

This can be particularly relevant when the business has significant expenses or investments carrying deductible VAT.

The option takes effect from the first day of the month in which it is exercised and is subject to the applicable option and renewal rules.

How do I change my VAT regime?

The business should contact its Service des Impôts des Entreprises (SIE) to exercise the option or deal with a change in VAT status.

The exact procedure should be checked according to the business’s situation and the current administrative process.

What does “VAT not applicable – Article 293B of the CGI” mean on an invoice?

It means that the business is benefiting from the franchise en base de TVA and therefore does not charge VAT on the transaction covered by the franchise.

The invoice is issued without VAT, and the business generally cannot recover VAT on its own purchases.

Why don’t self-employed entrepreneurs charge VAT?

Many micro-entrepreneurs remain below the applicable VAT franchise thresholds and therefore do not charge VAT.

However, micro-entrepreneur status does not automatically guarantee VAT exemption. The applicable turnover thresholds and activity must be examined.

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VAT Not Applicable Article 293B: What to Remember in 2026

The VAT exemption under Article 293B of the CGI remains an important simplification mechanism for small businesses, freelancers, artisans, professionals and micro-entrepreneurs.

The key points for 2026 are:

• Article 293 B of the CGI governs the French franchise en base de TVA.
• The regime allows eligible businesses to invoice without charging VAT.
• The business generally cannot recover VAT on its purchases.
• The main thresholds remain €85,000 / €93,500 for sales, goods and accommodation activities.
• The main thresholds for many services remain €37,500 / €41,250.
• Specific thresholds apply to lawyers, authors and performing artists.
• The planned €25,000 single threshold should not be presented as the applicable 2026 rule: the 2025 reform was ultimately removed.
• If the applicable current-year threshold is exceeded, the franchise can cease from the date of the exceedance.
• A business can voluntarily opt to become liable for VAT.
• Businesses carrying out international transactions may have VAT obligations even while benefiting from the franchise.
• The simplified VAT regime is scheduled to disappear from 1 January 2027, making forward planning particularly relevant for businesses approaching the franchise thresholds.

In other words, “TVA non applicable – article 293 B du CGI” is not simply a phrase reserved for micro-entrepreneurs. It is the invoicing consequence of a specific French VAT regime whose eligibility depends primarily on the business’s activity and turnover.

👉 Need help determining whether your business should remain under Article 293B or opt for VAT? ESCEC International can assist with VAT management, compliance and tax planning.