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Updated 19/02/2018

VAT exemptions

Some goods and services such as education, healthcare and financial services may be exempt from VAT.

These sales are exempt from VAT, without the 'right to deduct'. This means you may not deduct the VAT you have paid on purchases related to such sales.

Registering a business for VAT

Normally, when making sales in the course of business you need to register your business for VAT. When you register your business for VAT you will be issued with a VAT identification number.

If you make sales of goods or services that are considered exempt from VAT you do not always have to register your business for VAT.

VAT exemptions for small enterprises

In most EU countries you can apply for a special scheme that enables you to trade under certain conditions without the need to charge VAT. If your company makes taxable supplies of goods or services below a certain annual limit, it may be exempt from VAT. This means you will not pay VAT to the tax administration but you will then not be able to deduct the input VAT or to indicate VAT on invoices. You may — if you choose — voluntarily opt for the normal VAT arrangements, in which case you must pay VAT and, consequently, can deduct the input VAT.

Be aware that these limits or thresholds vary from country to country and special conditions may apply. In some countries, there is no VAT exemption for small enterprises and you must register as soon as you make any taxable sales.

The scheme does not apply for:

  • sales by businesses based in other EU countries
  • occasional economic activity
  • exempt sales of new means of transport to customers in another EU country
  • any other transactions as defined by EU country.

VAT THRESHOLDS - per country

(Table last updated April 2017)

Member State Exemption for small enterprises
  National currency Euro equivalent*
Austria

EUR 30 000

 
Belgium EUR 25 000  
Bulgaria BGN 50 000 EUR 25 565
Cyprus EUR 15 600  
Czech Republic CZK 1 000 000 EUR 37 008
Germany EUR 17 500  
Denmark DKK 50 000 EUR 6 726
Estonia EUR 16 000  
Greece EUR 10 000  
Spain None None
Finland EUR 10 000  
France EUR 82 800 or EUR 42 900 or EUR 33 100  
Croatia HRK 230 000 EUR 30 864
Hungary HUF 8 000 000 EUR 26 067
Ireland EUR 75 000 OR EUR 37 500  
Italy EUR 25 000 or EUR 30 000 or EUR 40 000 or EUR 50 000  
Lithuania EUR 45 000  
Luxembourg EUR 30 000  
Latvia EUR 50 000  
Malta EUR 35 000 or EUR 24 000 or EUR 14 000  
Netherlands None None
Poland PLN 200 000 EUR 46 442
Portugal EUR 10 000 or EUR 12 500  
Romania RON 220 000 EUR 48 725
Sweden SEK 30 000 EUR 3 168
Slovakia EUR 49 790  
Slovenia EUR 50 000  
United Kingdom GBP 83 000 EUR 97 808
*Euro foreign exchange reference rates as published by the European Central Bank for 21st February 2017 (except Romania where the thresholds expressed in RON are based on the EUR values for special schemes at the exchange rate on the date of accession, i.e. 1.1.2007)

Tax relief (Graduated relief)

Small businesses whose yearly turnover is below a certain threshold may be able to benefit from graduated relief. If you are eligible for the scheme you still have to register for VAT but you will be able to receive a relief on part of your turnover. The relief gradually decreases as your turnover increases until the threshold - set by the EU country where your company is based - is reached.

These thresholds vary from country to country and special conditions may apply. Currently there are only a few EU countries that have implemented the graduated relief scheme.

The scheme does not apply for:

  • sales by businesses based in other EU countries
  • occasional economic activity
  • exempt sales of new means of transport to customers in another EU country
  • any other transactions as defined by EU country

Contact a local business support partner

Do you have questions on operating a business cross-border, for example exporting or expanding to another EU country? If so, the Enterprise Europe Network can give you free advice.

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