What the Franchise en Base de TVA Actually Means for Your Invoices
The franchise en base de TVA is France's VAT exemption regime for small businesses and self-employed professionals. Under it, you do not charge VAT to your clients, you do not file VAT returns, and you do not pay VAT to the French tax authorities. For many freelancers and auto-entrepreneurs, this is the default regime they operate in without ever having actively chosen it — it applies automatically when you register your business if your turnover is below the relevant threshold.
The name is slightly misleading to non-French speakers. "Franchise" here does not mean a franchise business arrangement — it is the French legal term for an exemption or release from an obligation. "En base" means the exemption applies to the base amount of your turnover. The full legal basis is Article 293 B of the Code Général des Impôts (CGI), which is why the mandatory invoice mention references that specific article.
The practical effect on your invoices is straightforward: you invoice at the price of your service or product, with no VAT line, no tax breakdown, and no distinction between HT (hors taxes, excluding tax) and TTC (toutes taxes comprises, including tax). The amount your client pays is the amount you quoted. The trade-off is that you cannot recover the VAT you pay on your own business purchases — software, hardware, professional services, subscriptions, and so on.
The 2026 Thresholds — What They Are and Why There Are Two of Them
The franchise en base de TVA thresholds vary by activity type. For 2026, the confirmed figures are:
Services (freelancers, consultants, liberal professions, BIC/BNC services)
- Base threshold: €37,500 in annual turnover (previous calendar year)
- Tolerance threshold: €41,250 in annual turnover (current calendar year)
Goods, sales, and accommodation (commercial activity, para-hôtelier)
- Base threshold: €85,000 in annual turnover (previous calendar year)
- Tolerance threshold: €93,500 in annual turnover (current calendar year)
The reason there are two thresholds — a base and a tolerance — is to prevent businesses from losing their exemption overnight due to a marginally good year. The mechanism works as follows: if your previous year turnover was below the base threshold, you keep the exemption for the current year. If during the current year you exceed the base threshold but stay below the tolerance threshold, you keep the exemption for the rest of that calendar year and must charge VAT from January 1 of the following year. If you exceed the tolerance threshold at any point during the year, the exemption ends immediately — VAT applies from the first day of the month in which you crossed the limit.
Note: A proposed reform would have introduced a unified €25,000 threshold for all auto-entrepreneurs across activity types. This reform was suspended in early 2025 following significant opposition from self-employed workers and has not been enacted for 2026. The thresholds described above remain in force for 2026.
One additional rule applies to businesses in their first year of activity: your turnover is calculated on a pro-rata temporis basis — meaning it is annualised based on the number of days you operated. If you started your business on October 1 and earned €12,000 in three months, the annualised figure is approximately €48,000 (€12,000 × 365/92), which would exceed the €37,500 service threshold. First-year businesses often lose their exemption earlier than they expect for precisely this reason.
What to Write on Your Invoice — the Mandatory Mention
Every invoice you issue under the franchise en base de TVA must carry this exact phrase:
"TVA non applicable, article 293 B du CGI"
This is not optional, paraphrasable, or interchangeable with any other wording. Writing "TVA exempt" or "No VAT applied" or "Exonéré de TVA" without citing article 293 B is itself a compliance violation under French tax law and can trigger the same administrative penalties as a missing mandatory field. The phrase must appear on every invoice, every time, without exception.
Beyond this mention, your invoice under the exemption looks simpler than a standard VAT invoice. You do not need to show:
- A VAT rate
- A VAT amount
- A separate HT and TTC line
- A breakdown of VAT by rate
The amount shown on the invoice is the total amount your client owes. No further tax calculation is required. This is one of the genuine administrative advantages of the regime — your invoicing is significantly less complex than for a VAT-registered business.
For a complete list of all other mandatory fields that must appear on a French invoice regardless of VAT status — your SIRET number, invoice date, sequential invoice number, payment terms, and the rest — see the freelancer invoicing guide.
What You Cannot Do Under the Franchise en Base de TVA
The exemption is not unconditional. Two significant restrictions apply.
You cannot recover input VAT on your purchases. Every business expense you incur — software subscriptions, professional equipment, subcontractor fees, office supplies — includes VAT that you paid the supplier. Under a standard VAT regime, you would deduct this input VAT from your VAT liability. Under the franchise en base, you cannot. The VAT you pay on purchases is a real cost to your business, not a recoverable item.
This has a practical implication for your pricing and profitability. If your clients are VAT-registered businesses — which most B2B clients are — the VAT you charge them is transparent: they simply reclaim it. Your effective price to them is the same whether you charge VAT or not. But the VAT on your own purchases is a dead cost that reduces your margin. If your business has high input costs, the franchise en base may actually be more expensive for you than VAT registration despite the administrative simplicity.
You cannot charge VAT even if you want to, unless you opt in voluntarily. Under the franchise en base regime, you are prohibited from adding VAT to your invoices. If a client asks you to charge VAT so they can reclaim it — which some VAT-registered businesses prefer — you cannot do so unless you formally opt into VAT registration. The option is available to you at any time (see below), but it requires a formal step with your tax office.
Invoicing EU and International Clients — the Intra-Community VAT Number
This is where the franchise en base de TVA creates a complication that catches many freelancers by surprise. Even though you are exempt from French VAT, you may still need an intra-community VAT number (numéro de TVA intracommunautaire) to invoice clients in other EU countries correctly.
For B2B services provided to VAT-registered businesses in other EU member states, the reverse charge mechanism applies under Article 196 of the EU VAT Directive. Your client self-assesses the VAT in their own country. Your invoice shows zero VAT, includes both your VAT number and your client's VAT number, and carries a reverse charge note. Without your intra-community number, you cannot issue this invoice correctly — and some clients will refuse to pay without it.
You can request an intra-community VAT number from your Service des Impôts des Entreprises (SIE) even while operating under the franchise en base de TVA. Having the number does not mean you are VAT-registered in the sense of charging and collecting VAT domestically — it simply allows you to participate in the EU cross-border invoicing system correctly.
For the full details on how reverse charge invoicing works for EU cross-border transactions, see the VAT reverse charge EU guide.
Note: If you invoice clients outside the EU — UK, US, Australia, and so on — the reverse charge does not apply in the same way. For B2B services to non-EU clients, French VAT rules generally consider the place of supply to be outside France, meaning no French VAT is due in any case. You invoice without VAT and without needing to reference article 293 B. Verify with a tax advisor for your specific situation.
When You Exceed the Threshold — What Happens Next
Losing the franchise en base de TVA exemption is not a catastrophe, but it does require prompt action. The sequence is:
1. Notify your SIE. Contact your Service des Impôts des Entreprises to report that you have exceeded the threshold and to request VAT registration. You will be assigned a VAT number (numéro de TVA intracommunautaire).
2. Update your invoices. From the day VAT applies — either the first of the month following the tolerance threshold breach, or January 1 of the following year depending on which scenario applies — your invoices must show:
- The applicable VAT rate (20% for most services, 10% or 5.5% for certain activities)
- The amount excluding VAT (montant HT)
- The VAT amount
- The total including VAT (montant TTC)
- Your VAT number
3. Remove the article 293 B mention. It no longer applies and must not appear on invoices where VAT is charged.
4. Set up VAT filing. You will need to file periodic VAT returns — either monthly, quarterly, or annually depending on your regime — and pay the collected VAT to the tax authorities.
5. Correct any invoices issued in the transition month. If you exceeded the tolerance threshold mid-month, any invoices issued in that month before the threshold was crossed may need to be corrected to add VAT. Issuing credit notes (avoirs) and replacement invoices is the standard approach.
The transition is manageable, but timing matters. Businesses often underestimate how quickly they approach the threshold, particularly if they have a strong quarter. Tracking your cumulative turnover against both thresholds throughout the year is worth the five minutes per month it takes.
Opting Voluntarily Into VAT — When It Makes Sense
The franchise en base de TVA is not mandatory — it is the default for businesses below the threshold, but you can voluntarily opt into VAT registration at any time by submitting a written request to your SIE. The option applies from the first day of the month in which you request it and is binding for a minimum of two years (the current year plus the following calendar year), after which it renews automatically unless you withdraw it.
Voluntary VAT registration makes financial sense in specific situations:
When your clients are primarily VAT-registered businesses. They can reclaim any VAT you charge, so your effective price to them is unchanged. You gain the ability to recover input VAT on your purchases, which reduces your actual costs.
When you have significant business expenses. If you invest in equipment, software, a professional vehicle, or subcontract significant portions of your work, the input VAT you currently cannot recover may be substantial. At some point the recovery benefit outweighs the administrative burden.
When you are approaching the threshold and want predictability. Voluntarily registering before you exceed the threshold avoids the administrative disruption of being forced to transition mid-year.
The decision is worth discussing with an accountant (expert-comptable) who can model the actual financial impact for your specific revenue and cost structure.
The Franchise en Base de TVA and the 2026 E-Invoicing Mandate
This is the part that surprises most auto-entrepreneurs and small businesses currently benefiting from the franchise en base de TVA: the e-invoicing mandate applies to you regardless of your VAT exemption status.
The mandate is based on being assujetti à la TVA — subject to VAT as a legal category — not on being redevable de la TVA — actually liable to collect and pay it. Almost all French businesses and auto-entrepreneurs are assujettis even while exempt under the franchise en base. This means the Factur-X e-invoicing obligations apply to you just as they apply to any VAT-registered French business.
The timeline for businesses under the franchise en base de TVA:
From September 1, 2026: You must be able to receive e-invoices from suppliers via a certified Plateforme Agréée (PA). You need to select and register with a PA before this date.
From September 1, 2027: You must send structured e-invoices in Factur-X format for all domestic B2B transactions. Your invoices will need to correctly encode the franchise en base de TVA exemption in the XML data — specifically using the correct VAT exemption reason code so that your client's accounting system understands why no VAT appears on the invoice.
The "TVA non applicable, article 293 B du CGI" mention that appears on your PDF invoice must also be correctly represented in the structured XML data layer. A tool that generates the PDF correctly but does not encode the exemption correctly in the XML will produce a non-compliant e-invoice even if it looks right to a human reader.
For a full overview of the French e-invoicing mandate timeline and what it means for your business, see the e-invoicing guide for freelancers in France and the auto-entrepreneur e-invoicing guide.
Common Mistakes Businesses Make Under the Franchise en Base de TVA
Omitting the article 293 B mention. The most frequent compliance error. Every invoice, without exception, must carry "TVA non applicable, article 293 B du CGI." Forgetting it — even on a single invoice — is a violation.
Writing an approximation instead of the exact wording. "TVA non applicable" alone, or "exonéré de TVA" without the article reference, does not meet the legal requirement. The exact statutory reference must appear.
Invoicing EU clients without an intra-community VAT number. Many freelancers under the exemption believe they have no VAT obligations at all with foreign clients. In reality, B2B EU invoices require the intra-community mechanism and both parties' VAT numbers, even when the seller is exempt domestically.
Not tracking cumulative turnover against both thresholds. Businesses sometimes discover they exceeded the tolerance threshold after the fact, meaning they should have been charging VAT for several months. Retroactively correcting invoices is possible but administratively painful.
Assuming the e-invoicing mandate does not apply. As explained above, the mandate applies to all businesses assujettis à la TVA, which includes businesses operating under the franchise en base. Not preparing for September 2026 because you do not charge VAT is a mistake that will cause operational disruption.
Not considering voluntary VAT registration as an active choice. Many businesses stay under the franchise en base by default without ever modelling whether voluntary VAT registration would actually benefit them. If your clients are primarily businesses, the numbers may be more favourable than you expect.
Frequently Asked Questions
What is the franchise en base de TVA threshold for services in 2026?
For service providers — including freelancers, consultants, and liberal professions — the base threshold is €37,500 in annual turnover for 2026. A tolerance threshold of €41,250 applies: if you exceed €37,500 but stay below €41,250, you keep the exemption for the current calendar year but must charge VAT from January 1 of the following year. If you exceed €41,250 at any point during the year, VAT applies from the first day of the month in which you crossed that limit.
What exactly must I write on my invoice under the franchise en base de TVA?
You must include the exact phrase "TVA non applicable, article 293 B du CGI" on every invoice you issue under the exemption. The wording must match exactly — a vague mention like "VAT exempt" without citing article 293 B is a compliance violation. You show no VAT rate, no VAT amount, and no HT/TTC breakdown.
Can I reclaim VAT on my business expenses under the franchise en base de TVA?
No. This is the main trade-off of the exemption. Under the franchise en base de TVA, you neither charge VAT to your clients nor recover the VAT you pay on your own business purchases. If you have significant business expenses with VAT, opting voluntarily into VAT registration may actually save you money despite the additional admin.
What happens when I exceed the franchise en base de TVA threshold mid-year?
If you exceed the base threshold (€37,500 for services) but stay below the tolerance threshold (€41,250), you continue to benefit from the exemption until December 31 and must charge VAT from January 1 of the following year. If you exceed the tolerance threshold (€41,250) during the year, the exemption ends immediately — VAT applies from the first day of the month in which you crossed the limit.
Do I need a VAT number to invoice foreign clients under the franchise en base de TVA?
Yes. Even if you are exempt from French VAT, you must obtain an intra-community VAT number to invoice clients in other EU countries. For B2B services to EU clients, the reverse charge mechanism applies — you invoice without VAT, include both VAT numbers, and add a reverse charge note.
Does the franchise en base de TVA affect my e-invoicing obligations?
No — the e-invoicing mandate applies to you regardless of your VAT exemption status. From September 2026 you must receive e-invoices via a Plateforme Agréée. From September 2027 you must send structured Factur-X invoices, with the exemption correctly encoded in the XML.
Can I voluntarily opt into VAT even if I am below the franchise en base threshold?
Yes. Any business below the thresholds can voluntarily opt into VAT registration by submitting a written request to their Service des Impôts des Entreprises. This can make sense if your clients are VAT-registered businesses or if you have significant input costs. The option runs for a minimum of two years.
Is the franchise en base de TVA the same as the Kleinunternehmerregelung in Germany?
They serve the same purpose — VAT exemption for small businesses — but the rules differ significantly. The German Kleinunternehmerregelung uses thresholds of €25,000 (previous year) and €100,000 (current year), both net figures. The French franchise en base uses different thresholds by activity type (€37,500 for services, €85,000 for goods in 2026) with a separate tolerance mechanism. For a comparison, see the Kleinunternehmerregelung guide.
Facturwise generates fully compliant Factur-X/ZUGFeRD invoices with all required fields and structured XML data — ready for the European e-invoicing mandate. Create your first compliant invoice for free.
This article is for informational purposes only and reflects French tax law as of April 2026. It does not constitute legal, tax, or professional advice. Tax regulations change frequently — always consult a qualified expert-comptable or tax advisor for your specific situation.