VAT

VAT registration threshold

The annual turnover below which a business may stay outside VAT. Set nationally, so it differs widely across the EU.

What VAT registration threshold means

Most member states allow small businesses to remain unregistered for VAT until their turnover over a rolling twelve-month or calendar-year period exceeds a national threshold. Below it, the business does not charge VAT and cannot deduct input VAT. Above it, registration is compulsory, usually within a short deadline after the threshold is crossed.

The threshold is set nationally within limits agreed at EU level, so the amount varies from a few thousand euro to well over one hundred thousand. Since 2025 an EU-wide cross-border scheme also lets a small business use the exemption in other member states, provided its EU-wide turnover stays under EUR 100 000. Watching the threshold matters: crossing it late means back-dated VAT that was never charged to customers.

Examples across the EU

For example, the national registration threshold is about €25,000 in Germany and €56,000 in Poland (converted to euro).

Related terms

VAT (value added tax)A consumption tax charged on most goods and services in every EU country, collected by businesses and paid to the tax authority.Small business scheme (VAT exemption)A simplification that exempts businesses under a turnover limit from charging VAT, filing regular VAT returns and deducting input tax.VAT identification numberThe number a tax authority assigns to a VAT-registered business. Starts with the country code and is required on invoices and for cross-border trade.Flat-rate schemeA simplified tax regime where tax is calculated as a percentage of turnover or a fixed amount, instead of from actual profit or VAT records.

This entry is general information, not tax advice. Rules change; check the current position with your adviser or the tax authority of your country.

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