Create your VAT-free invoice as a sole trader

As a sole trader (auto-entrepreneur), invoicing without VAT considerably simplifies your administrative management. This scheme, known as the VAT exemption threshold (franchise en base de TVA), frees you from collecting and remitting VAT.

This lightens your filings and lets you offer more attractive prices — a real advantage for new entrepreneurs.

However, it’s important to understand the implications of this scheme. For example, you cannot reclaim VAT on your business purchases.

The price of your supplies therefore includes VAT, with no possibility of deduction. A good understanding of these mechanisms is essential for optimal financial management.

Understanding the VAT exemption threshold scheme

The VAT exemption threshold applies to sole traders whose revenue stays below certain caps. These caps differ depending on your activity: sale of goods, provision of services, or professional services.

The sole trader status in France has grown strongly. At the end of June 2022, there were 2.5 million active sole traders, up 12.2% year on year. This status remains attractive thanks to its tax and social simplicity.

The lowering of the exemption threshold to €25,000, planned for March 2025, will change the VAT scheme for some sole traders. For more information, see the following article: Key figures on sole traders.

Advantages and disadvantages of VAT-free invoicing

Invoicing without VAT offers advantages: administrative simplification and greater competitiveness thanks to potentially lower prices.

The inability to reclaim VAT on purchases is nonetheless a significant cost, especially for entrepreneurs who regularly invest in equipment or services.

Impact on your customers

The absence of VAT on your invoices is generally positive for individuals. They pay the net price. For business customers, the impact is often neutral, since they don’t reclaim VAT anyway.

Some large VAT-registered companies may hesitate to work with non-VAT-registered sole traders, due to more complex accounting.

Mastering VAT-free invoicing is therefore an asset for succeeding as a sole trader. It’s a central element of your financial and business strategy. Tools like Bizyness can help you manage your invoicing and optimize your business.

Create the perfect VAT-free invoice

Your invoice is the showcase of your professionalism. As a sole trader benefiting from the VAT exemption threshold, a flawless invoice is essential. It strengthens your credibility with clients and simplifies your filings with the tax authorities. This process, simplified by the absence of VAT, still requires close attention to mandatory information.

Here’s a summary table of the elements required on an invoice from a sole trader not subject to VAT:

Element	Requirement	Example	Note
Your identity	Mandatory	Jean Dupont
10 rue de l’Exemple, 75000 Paris
SIRET: 12345678900010
APE code: 7410Z	The full address is essential.
Client identity	Mandatory	ABC Company
20 rue de la Clientèle, 75000 Paris	Make sure the information is accurate.
Invoice number	Mandatory	2024-10-26-001	Chronological, uninterrupted numbering.
Issue date	Mandatory	October 26, 2024	Corresponds to the date the service was performed.
Description of services	Mandatory	Logo design	Clear, precise description of the service provided.
Unit price excl. VAT	Mandatory	€500	Price before tax.
Quantities	Mandatory	1	Number of units for each service.
Total excl. VAT	Mandatory	€500	Sum of unit prices multiplied by quantities.
VAT exemption notice	Mandatory	”VAT not applicable, art. 293 B of the French Tax Code”	Legal justification for the absence of VAT.

This table summarizes the mandatory legal notices for a VAT-free invoice. Complying with these points is crucial for the validity of your document.

Mandatory notices on a VAT-free invoice

Let’s look in more detail at each element required for a compliant invoice. A VAT-free invoice must include precise information to be valid. Omitting even a minor detail can cause complications.

• Your identity: Name/business name, full address, SIRET number, APE code. This information clearly identifies your business.
• Your client’s identity: Name/business name and full address. The accuracy of this data matters for invoicing.
• Invoice number: Chronological and unbroken. This unique number identifies each invoice.
• Issue date: The date the invoice is created. It usually corresponds to the date the service was performed.
• Description of services: Precise description of the products or services sold. The more detailed the description, the better.
• Unit price excl. VAT: Pre-tax price of each product or service.
• Quantities: Number of units sold for each product or service.
• Total excl. VAT: Sum of the pre-tax prices.
• VAT exemption notice: “VAT not applicable, art. 293 B of the French Tax Code.” This notice legally justifies the absence of VAT.

The importance of the “VAT not applicable, art. 293 B of the French Tax Code” notice

Derived from the French General Tax Code, this notice is more than a mere formality. It certifies your legal exemption from collecting VAT. Its absence may raise questions from your clients or the tax authorities. Invoicing software like Bizyness can automate the inclusion of this notice and other mandatory information, simplifying your administrative management.

A professional invoice: a mark of credibility

A well-crafted invoice reflects your professionalism. A clear, precise, compliant presentation builds trust and helps retain clients. Conversely, a sloppy invoice can hurt your image. Think of your invoice as a business card — a polished presentation is therefore essential.

Invoice templates suited to your industry

After covering the fundamentals of invoicing as a VAT-free sole trader, choosing a template suited to your business is essential. This choice ensures a professional look and guarantees all essential information is present. It’s therefore crucial for optimal invoicing.

Templates for every profession

A template specific to your trade — whether you’re a consultant, graphic designer, craftsperson, or shopkeeper — is essential. A graphic designer, for example, might include a section dedicated to usage rights for their creations. A craftsperson, meanwhile, would detail the materials used. This level of detail offers full transparency to your clients.

• Intellectual services: Highlight your skills and the time invested in each assignment.
• Craftsmanship: Detail the materials and production steps.
• Retail: Clearly state product references and quantities sold.

At the end of June 2023, the number of sole traders reached 2.715 million, an increase of 8.6% year on year. Some sectors, such as transport and cleaning, show particularly strong growth. Check URSSAF statistics for more information. Adapting invoices to these growing sectors is therefore a major challenge.

Personalization and branding

The invoice is a communication tool in its own right. It helps strengthen your brand image. Don’t hesitate to add your logo, use your colors, and choose typography that matches your visual identity. These seemingly minor details contribute to a more professional image.

Software solutions: free and paid

Several tools let you create invoices. Free solutions, like Excel templates, allow you to generate simple invoices. For a larger business, paid software like Bizyness offers more advanced features: automation, client management, and payment tracking. This software greatly simplifies administrative management and lets you focus on your core business.

Optimizing your invoicing with Bizyness

Bizyness offers customizable invoice templates suited to different activities. The software automatically inserts the legal notice “VAT not applicable, art. 293 B of the French Tax Code” on VAT-free invoices. Bizyness also makes managing your business easier with expense tracking, client management, and report generation features. Discover Bizyness features for sole traders. Suitable software guarantees flawless invoicing and considerable time savings.

Managing invoicing as a sole trader is generally simplified thanks to the VAT exemption. However, some situations can be more complex and require special attention. It’s therefore important to understand these specific cases well to ensure compliant invoicing and avoid any issues.

International invoicing

Invoicing clients outside France involves specific rules for sole traders. Reverse charge VAT is the principle applied. Your client will then be responsible for paying VAT in their own country.

Your invoices must be issued excluding tax (excl. VAT) with a clear reverse-charge notice. This notice must comply with the legislation of the client’s country. It’s crucial to differentiate the notice depending on whether the client is located within the European Union or not.

Credit notes, deposits, and continuous services

These three types of transactions require specific handling. A credit note corrects an initial invoice, while a deposit corresponds to a partial payment made before the final service.

For continuous services, it’s recommended to issue regular invoices, for example monthly. Each invoice must specify the period covered and include the legal VAT exemption notice: “VAT not applicable, art. 293 B of the French Tax Code.”

Combining activities and mixed activities

Combining sole trader status with salaried employment, or engaging in mixed activities, is common. It’s essential to clearly separate the income from each activity for rigorous accounting and tax management.

Invoicing for the sole trader activity remains subject to the usual rules, including the VAT exemption notice. In the Centre-Val de Loire region, about 40% of self-employed workers outside the agricultural sector are micro-entrepreneurs, and 30% of them combine this activity with salaried employment. The median income of these micro-entrepreneurs is €310 per month. More information on micro-entrepreneur statistics.

Concrete examples

Let’s take the example of a sole trader web designer invoicing a service to a Belgian client. The invoice will be excl. VAT with the notice “Reverse charge by the recipient - Article 196 of Directive 2006/112/EC.”

For a deposit, the invoice will state “Deposit on invoice No…” followed by the amount and the VAT exemption notice.

Using invoicing software like Bizyness simplifies handling these situations. It offers suitable invoice templates and automates the inclusion of mandatory legal notices, saving you time so you can focus on your business.

Preparing for the 2025 VAT reform

2025 will bring significant changes regarding VAT for sole traders. Lowering the exemption threshold to €25,000, regardless of the type of activity, will affect many micro-entrepreneurs. It’s therefore essential to anticipate and adapt your business to maintain profitability and competitiveness.

Understanding the changes

Until now, VAT exemption thresholds varied depending on the type of activity (sale of goods, provision of services, etc.). The reform harmonizes this threshold to €25,000, meaning that as soon as your revenue crosses this cap, you’ll need to collect and remit VAT. The impact on sole traders will be significant. From March 2025, this new threshold will affect approximately 250,000 additional micro-entrepreneurs. More information on the reform’s impact is available here. This change will have a direct impact on your cash flow, pricing, and client relationships.

Adapting your pricing strategy

Applying VAT to your invoices may lead to a price increase. Several options are possible: pass the full VAT on to the client, absorb part of it to stay competitive, or adjust your margins. The best choice will depend on your industry, your customer base, and your positioning. Take the example of a service billed at €100 excl. VAT. With a 20% VAT rate applied, the price incl. VAT will rise to €120.

To better visualize the changes, here’s a comparison table:

The table below shows the current and future VAT exemption thresholds by type of activity.

Type of activity	Current threshold	2025 threshold	Impact
Sale of goods	€85,800	€25,000	Significant decrease
Provision of services	€36,500	€25,000	Significant decrease
Professional services	€36,500	€25,000	Significant decrease

This table highlights the significant decrease in exemption thresholds for all types of activities. It’s important to factor in these changes to adapt your strategy.

Managing VAT effectively

Collecting and remitting VAT brings new administrative obligations: keeping a record of purchases and sales, filing returns, and managing the cash flow tied to collected VAT. Invoicing software such as Bizyness can support you by automating these tasks and generating the necessary filings. You’ll save time and can focus on your core business.

Turning the constraint into an advantage

Becoming subject to VAT can also be an opportunity. You’ll be able to reclaim VAT on your business purchases, which represents a financial advantage. Moreover, invoicing with VAT can strengthen your credibility with certain companies that prefer VAT-registered providers. This change can thus professionalize your image and open up new markets. Bizyness helps you effectively manage VAT recovery and optimize your invoicing.

Advanced strategies for flawless invoicing

Having covered the fundamentals of VAT-free sole trader invoicing, let’s explore more advanced strategies to optimize this process and turn it into an asset for your business. Effective invoicing isn’t limited to issuing documents — it contributes to the professionalization of your image, client loyalty, and the financial health of your business.

Automation: time savings and fewer errors

Automating invoicing is a key success factor for sole traders. Imagine: no more manually entering information, no more risk of calculation errors or forgotten legal notices. Software like Bizyness lets you create customized invoices in just a few clicks, automate follow-ups, and track payments. You save precious time to focus on your core business.

Mastering payment terms and collections

Managing payment terms is crucial for any business, including sole traders. Late payments can impact your cash flow. Put clear procedures in place with your clients: set precise deadlines, send automatic reminders, and follow up personally in case of delay.

The invoice: a loyalty-building tool

The invoice is more than an accounting document — it’s a touchpoint with your clients. Strengthen your brand image: refine the presentation, personalize the message, and offer special deals to loyal customers. A polished invoice builds loyalty and fosters a lasting relationship of trust.

Integrating invoicing and accounting

Simplify your tax obligations and save time by integrating your invoicing system with your accounting. Bizyness automatically syncs your invoices with your accounting, generates reports, and prepares your tax filings. This integration ensures optimal financial management and limits errors.

Anticipating changes and preparing for 2025

Lowering the VAT exemption threshold to €25,000 in 2025 is a significant change. Anticipate this shift to adapt your strategy and maintain your profitability. Use tools like Bizyness to simulate the impact of this change and prepare effectively.

Optimize your invoicing now and free up time to grow your business with Bizyness.