VAT exemption scheme for small businesses

VAT exemption scheme for small businesses

  • What exactly is the VAT exemption scheme?

    You are exempt from most VAT obligations. Specifically, you do not have to:

    • submit periodic returns,
    • charge VAT to your customers,
    • pay VAT to the Treasury.

    On the other hand:

    • you must submit a declaration of commencement, modification or cessation of activity,
    • you must submit a declaration of intra-Community supplies for the intra-Community deliveries and services which you provided,
    • you remain subject to VAT and must therefore have a VAT identification number,
    • you do have certain obligations with regard to invoicing, accounting, etc.,
    • you may not deduct VAT,
    • you must submit a list of your customers,
    • you must submit a special VAT return in cases of intra-Community acquisitions or services for which you are liable for VAT.

  • For whom is the VAT exemption scheme intended?

    You are eligible for the VAT exemption scheme if your business’s annual turnover does not exceed EUR 25 000 (excluding VAT). It does not matter what legal form your business takes (natural person, company, etc.).

    Please note! VAT units and certain sectors (construction work, catering, the supply of old materials) are excluded from this scheme. Certain transactions are also excluded from this scheme (but the business concerned can benefit from this scheme for all its other transactions).

  • How do I apply for the VAT exemption scheme for small businesses?

    Existing business

    You must apply for the exemption scheme with your competent SME management team. There are two possible dates on which the scheme comes into effect:

    • 1 July: you must apply before 1 June;
    • 1 January: you must apply before 15 December.

    New business

    When you commence your activity, you must apply for VAT identification. You determine your VAT scheme at the time of this application based on your estimated turnover and your activity. In the 604A application form, indicate that you opt for the exemption scheme.