In the EU, small businesses have the possibility to not register for VAT, if their annual turnover is under a certain limit.
In this article, we’ll look at the different VAT thresholds per country, and see the rationale behind the existence of these limits.
What are the VAT exemption thresholds in the EU?
Small businesses in the EU do not have the obligation to register for VAT as soon as they start operating. In fact, under a certain annual threshold, they aren’t required to collect and remit VAT on their sales, and they cannot claim back VAT on business purchases.
The VAT registration threshold varies from country to country, as well as the administrative formalities around it. Sometimes, the registration threshold is for the calendar year, while at other times, it’s for a 12-month rolling period. Your local tax office is your best source of information, as far as the specific VAT exemption procedure is concerned.
The purpose of the VAT exemption threshold is to simplify tax compliance and alleviate the administrative burden of small companies. VAT compliance is complex, so each EU country has set its own limit.
What are the exceptions for the EU VAT exemption thresholds?
Keep in mind that these thresholds do not apply to you if you’re selling goods to B2C customers in other EU countries but your own.
If you’re selling goods to end customers in the EU, you need to apply VAT to your transactions. As the July 2021 EU VAT reform came into effect, a pan-EU annual threshold of €10,000 now applies.
If your annual sales are:
- Under €10,000, you need to apply VAT as per the VAT rules of the country where you’re established
- Above €10,000, you need to apply VAT as per the VAT rules of the destination country.
What are the VAT exemption thresholds in each country?
Let’s now look at the different VAT exemption thresholds in each country:
- Austria: € 35,000
- Belgium: € 25,000
- Bulgaria: BGN 50 000 or € 25 565
- Cyprus: € 15 600
- Czechia: CZK 1,140,000 or € 44,426
- Germany: € 22,000
- Denmark: DKK 50 000 or € 6,713
- Estonia: € 40,000
- Greece: € 10,000
- Spain: none
- Finland: € 10,000
- France: goods €85,800; services €34,400
- Croatia: HRK 300,000 or € 40,046
- Hungary: HUF 12,000,000 or € 33,488
- Ireland: goods €75,000; services €37,500
- Italy: € 65,000
- Lithuania: € 55,000
- Luxembourg: € 35,000
- Latvia: € 40,000
- Malta: € 35,000 or € 24,000 or € 14,000
- Netherlands: € 20,000
- Poland: PLN 200 000 or € 43,700
- Portugal: € 12,500 or € 12 500
- Romania: RON 330 000 or € 66,965
- Sweden: SEK 30 000 or € 2 943
- Slovakia: € 49,790
- Slovenia: € 50,000