VAT exemptions

Updated on May 8, 2022

VAT may not apply to some products and services, such as education, health care, and financial services.

The ‘right to deduct’ does not apply to these sales because they are exempt from VAT. Because of this, you cannot deduct the VAT you paid on items related to these transactions. –

Registering a business for VAT

Normally, if your business sells anything, you have to register for VAT. You will receive a VAT identification number when you register your firm for VAT.

VAT registration is not necessarily necessary if you sell goods or services that are exempt from VAT.

VAT exemptions for small enterprises

An exemption from the requirement to charge VAT on sales is available in the majority of EU countries. Your company may be excluded from VAT if it supplies goods or services taxable under a particular annual limit. So you won’t have to pay tax authorities, but you won’t be able to deduct input VAT or indicate VAT on invoices as a consequence. Voluntarily select for the usual VAT arrangements, which entails paying VAT but also entitles you to deduct any input VAT you pay.

You should be aware that these limits or thresholds can vary greatly from nation to country and that specific conditions may apply. You must register for VAT in several countries as soon as you make any taxable sales, and there are no exemptions for small businesses.

For example, the plan does not cover:

Sales of new modes of transportation to customers in another EU country by companies established in another EU country are exempt from any other transactions as defined by the EU country from occasional economic activity.

VAT THRESHOLDS – per country

(Table last updated May 2018)

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
Czechia CZK 1 000 000 EUR 39 362
Germany EUR 17 500
Denmark DKK 50 000 EUR 6 713
Estonia EUR 40 000
Greece EUR 10 000
Spain None None
Finland EUR 10 000
France EUR 82 800 or EUR 42 900 or EUR 33 200
Croatia HRK 300 000 EUR 40 324
Hungary HUF 8 000 000 EUR 25 567
Ireland EUR 75 000 OR EUR 37 500
Italy EUR 65 000
Lithuania EUR 45 000
Luxembourg EUR 30 000
Latvia EUR 40 000
Malta EUR 35 000 or EUR 24 000 or EUR 14 000
Netherlands None None
Poland PLN 200 000 EUR 47 324
Portugal EUR 10 000 or EUR 12 500
Romania RON 220 000 EUR 47 180
Sweden SEK 30 000 EUR 2 943
Slovakia EUR 49 790
Slovenia EUR 50 000

As of 23 March 2018, the European Central Bank has published the Euro’s foreign exchange reference rates (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)

Graduated relief may be available to small enterprises with a yearly revenue below a specific threshold. A portion of your turnover will be exempt from VAT registration if you are eligible for the programme. After reaching the EU nation level, the relief diminishes as your company’s revenue rises more.

Depending on the country, these thresholds may be lower or higher. Only a few EU countries now use the progressive relief system.

For example, the plan does not cover:

sales of new means of transportation to customers in another EU country are free from the definition of “economic activity” as defined by the EU country in which the business is headquartered.

Related topics

EU legislation

Affected by Brexit?

Need support from assistance services?

Get in touch with specialised assistance services