Value Added Tax (VAT) is a consumption tax that is imposed on the value added to goods and services at every stage of the supply chain. VAT is applied in European Union (EU) countries, and the threshold for VAT registration varies from country to country. In this article, EU Tax Advice will explore the thresholds for VAT registration in main EU countries and the United Kingdom & Northern Ireland.
A VAT registration threshold is the turnover limit that a business must exceed before it is required to register for VAT. This means that if a business’s turnover is below the VAT registration threshold, it does not need to register for VAT and is not required to charge VAT on its sales. However, in most countries, the VAT registration thresholds apply to resident businesses only. Also, the threshold for small businesses can differ.
In the EU, the VAT registration thresholds vary from country to country. The threshold can be based on an annual turnover or a taxable turnover. Let’s take a look at the VAT registration thresholds for some EU countries.
Country | Annual VAT registration threshold* |
Germany | € 22,000 |
France | € 85,800 for goods and €34,400 for services |
Italy | € 85,000 |
Netherlands | € 20,000 |
Poland | € 45,000 / PLN 200,000 |
Spain | € 0,00 no VAT registration thresholds for Spain |
Sweden | € 7,000 / SEK 80,000 |
United Kingdom and Northern Ireland | € 95,000 / GBP 85,000 |
*If a business exceeds the threshold, it must register for VAT.
It is important to note that the VAT registration thresholds are subject to change, and businesses should check with their local tax authorities to confirm the latest thresholds. The above matrix presents the VAT registration thresholds for 2023. Additionally, some countries have different VAT rates for different types of goods and services, so businesses should also be aware of the applicable VAT rates in their respective countries.
In conclusion, the VAT registration thresholds in EU countries vary depending on the country and can be based on annual turnover or taxable turnover. Businesses should be aware of the VAT registration thresholds in their respective countries and should monitor their turnover to ensure that they comply with VAT regulations.
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