VAT for a VTC or taxi driver, and the status that leaves you more
The exemption threshold and your choice of status weigh more on your net pay than most fuel savings.
Checked by Radif Partners · Editorial policy · Method and sources
In France, passenger transport by taxi or VTC (licensed private hire) carries the reduced VAT rate of 10%, set by article 279 b quater of the General Tax Code. As long as last year’s turnover stays under €37,500, and this year’s under €41,250, you benefit from the small-business exemption (franchise en base): you charge no VAT and reclaim none. Above that, your fares include the tax, so a passenger paying €110 leaves you €100 of turnover. Your status then comes into play: as a micro-entrepreneur (the simplified self-employed scheme), contributions are 21.2% of turnover whatever your costs; under real profit, they are charged on profit less a 26% allowance, with minimum contributions. The comparison above runs both on your own figures.
VAT to pay over for the year
€4,091
| VAT status | liable for VAT |
| 2026 thresholds | €37,500 · €41,250 |
| Headroom below the exemption threshold | €0 |
Net income by status, per year
| Micro-enterprise | Sole trader, real profit | |
|---|---|---|
| Contributions | €8,795 | €8,346 |
| Net before income tax | €18,914 | €19,363 |
Better status in this case : Sole trader, real profit, + €450 (2.4 %)
Under real profit, costs are deducted before contributions; under micro, they do not reduce contributions, which are charged on turnover. Enter costs including VAT if exempt, excluding VAT if you are liable.
The exemption threshold, year by year
For service businesses, the VAT exemption works on two thresholds (service-public, page F21746). If last year’s turnover stayed under €37,500, you start the year exempt. If this year’s turnover goes past €41,250, VAT is due from the day you cross it. In between, you finish the year without VAT and become liable on 1 January. The plan floated in 2025 to cut the threshold to €25,000 was dropped, so the 2026 thresholds are unchanged.
| Turnover in the year | This year | Next year |
|---|---|---|
| up to €37,500 | exempt | exempt |
| €37,500 to €41,250 | exempt | VAT |
| above €41,250 | VAT from the day crossed | VAT |
What VAT does to your income
When passengers compare prices, you cannot always put fares up by 10 % the day you cross the threshold. If the price stays put, your turnover drops by about 9.1 %. In return, a VAT-registered driver reclaims VAT on business purchases where the law allows it; the comparison therefore expects costs excluding VAT in that case, and including VAT while exempt.
Micro or real profit: two different bases
Under the micro scheme, contributions are a percentage of turnover: 21.2 % for craft-type services, plus 0.3 % training levy (Urssaf). Under real profit, Urssaf applies the craftspeople’s scale to profit reduced by a 26 % allowance since the reform of the contribution base (Urssaf, contribution base reform). Real profit means full bookkeeping, usually done by a chartered accountant (expert-comptable): put that fee in the costs before drawing conclusions.
Limits
The comparison does not compute income tax, does not cover a SASU company and ignores Acre relief under real profit. The net income calculator applies the same rules with a full breakdown of vehicle costs.