no revaluation of the deductible on the basis of LégiFiscal lawyers

In a written response to a deputy, the Government ruled out increasing in the short term the threshold of deductible on the basis of VAT from which lawyers benefit (Question n°44126, Mr. Dupont-Aignan, JOAN of April 26, 2022).

​The franchise based on VAT ¶

Article 293 B of the CGI provides for a deductible based on VAT which has the effect of exempting from law the operations carried out by certain companies whose turnover is low. Micro-entrepreneurs (ex-autoentrepreneurs) are mainly targeted.

The maximum turnover threshold varies according to the activity:

  • Commercial or accommodation service activities: €85,800
  • Service activities and liberal professions under the BNC and BIC (excluding lawyers): €34,400
  • Lawyers: €44,500.

The companies concerned are not subject to VAT on their sales.

​Lawyers: collection problems ¶

The former candidate for the Presidency of the Republic, Nicolas Dupont-Aignan alerted in the context of a written question, the Minister of Economy, Finance and Recovery on the difficulties of financing a growing part of the lawyers’ clientele. According to him, numerous defaults of payment by lawyers have occurred and he believes that this difficulty comes in particular from the 20% VAT rate applicable to fees. VAT, other tax and social charges would swallow up, according to the deputy of Essonne, more than 60% of their turnover excluding VAT. The lawyers are therefore demanding an increase in the basic deductible from €44,500 to €50,000. The MEP argues that this measure could be put in place without the unanimous agreement of the European partners and would make it possible to promote a service likely to consolidate a society of law and free access to justice.

The government’s response ¶

The Government recalls that the basic deductible thresholds in terms of VAT are updated every 3 years, including for that provided for in 1° of III of article 293B of the CGI from which lawyers benefit. The next revaluation will take place on 1er January 2023.

In addition, the Ministry of Economy, Finance and Recovery notes that the ceiling of €44,500 is already more advantageous than that applicable to the provision of services and that these thresholds are already among the highest in the European Union. Finally, lawyers, like other companies, were able to benefit from the support systems put in place by the State during the Covid-19 crisis (solidarity funds, partial activity of employees, PGE) to limit the impact on their cash. Consequently, the Government is not in favor of an increase in the basic deductible threshold of €44,500, specific to the legal profession.

Source: Question n°44126, Mr. Dupont-Aignan, JOAN of April 26, 2022

Leave a Comment