HAPPY VAT BIRTHDAY: with lots of love and a pinch of humor!

Born in France on April 10, 1954, VAT turns 71 today.

And what a journey it’s been!
Gradually adopted by all EU countries and harmonized across the Union, value-added tax now exists in 175 countries worldwide, including its cousins GST and GCT. And it’s not over yet—several new implementations are currently underway.

While VAT has become France’s primary source of tax revenue, it has never really won any popularity contests…
Only VAT specialists and the tax authorities seem to get genuinely excited about it.

Let’s be honest, VAT has many faces:

• It can support the economy during crises (like the sector-specific VAT cuts during Covid),
• …or spark tension, like with the famous reciprocal tariffs (partially suspended for 90 days, according to the April 9 U.S. presidential announcement).

A bit like a magic wand, it can sometimes work miracles:

🔽 When reduced, it can temporarily green up the planet by steering consumption toward more sustainable products.
🔼 When increased, it might even save our pensions, following the example of our Swiss neighbors.

In short: VAT is everywhere, and especially in the news lately.

Some highlights:

• The small business exemption reform, passed in the 2025 French Finance Law, planned to lower the VAT registration threshold to €25,000 as of March 1, 2025. Currently suspended due to protests by affected stakeholders, the Senate Finance Committee even called for the reform to be dropped entirely (press release dated April 9).

• Combined with the French e-invoicing reform, this lower threshold could double the burden on small businesses, exposing them to new accounting obligations as early as September 2026. A potential delay of the e-invoicing rollout is being discussed in the Economic Life Simplification Bill. (See our article from March 27)

• In the French short-term rental sector (Airbnb, etc.), the VAT framework is also shifting, with relaxed conditions for taxation of accommodation services (BOFIP update from March 26, 2025).

• And let’s not forget VIDA, the EU-wide reform officially adopted and published on March 25, which promises to keep companies—and tax advisors—busy for years to come, all in the name of “simplification.”

As for a full VAT makeover? Not likely:
➡️ The BOFIP guidance from April 9, 2025, confirmed that VAT exemption for cosmetic surgery will remain strictly limited to therapeutic treatments.

Happy birthday, dear VAT!
And hats off to those who work with it (or chase after it) every single day.

Feel free to contact our VAT expert for any operational support: contact@btobnice.com