Value added tax registration thresholds in the European Union

Value Added Tax (VAT) registration thresholds in the European Union (EU) are the minimum sales turnover amounts set by individual Member States of the European Union, above which taxable persons, such as individuals or businesses are required to register for EU VAT. The period for which the VAT registration threshold is calculated typically refers to a calendar year or a 12-month period.

These thresholds are designed to balance between efficient tax collection and reducing administrative burdens on small and micro-enterprises. Moreover, the VAT registration thresholds are a crucial component of VAT policies, as they strike a balance between the goals of revenue collection, economic efficiency, and administrative simplicity.

While the EU VAT system is governed by EU-wide directives, particularly the Council Directive 2006/112/EC, commonly referred to as the EU VAT Directive, Member States retain the discretion to set specific registration thresholds within limits established by EU law.

Under the VAT registration threshold, taxable persons, such as businesses or individuals, who remain below the threshold are generally exempt from charging VAT on their supplies. However, those taxable persons may also be restricted from reclaiming input VAT. In contrast, taxable persons that exceed the defined threshold must register for VAT in the Member State where the threshold is exceeded, collect tax on taxable transactions, and comply with VAT reporting and invoicing requirements.

History

Background The concept of VAT registration thresholds dates back to the early stages of harmonizing VAT systems within the European Economic Community (EEC). When the Sixth VAT Directive (77/388/EEC) was adopted in 1977, it permitted Member States to exempt small businesses from VAT obligations, thereby reducing compliance burdens and supporting economic growth. The implementation of registration thresholds was a practical solution to these objectives.

Initially, the thresholds varied widely among Member States and were set at national discretion. Over time, the need for greater coordination and transparency in the internal market led to incremental regulatory alignment, culminating in the replacement of the Sixth Directive by the Council Directive 2006/112/EC on the common system of value added tax. While the Directive laid down a harmonized VAT framework for cross-border supplies, it continued to allow Member States flexibility in setting their domestic thresholds for resident taxable persons.

Harmonization and National Discretion Although the European Union has taken steps to harmonize aspects of VAT law, registration thresholds remain an area where national discretion persists, subject to certain limitations. Under Directive 2006/112/EC, Member States may grant VAT exemptions to small enterprises whose annual turnover does not exceed a specified threshold.

SME Scheme To further align VAT treatment of small enterprises, the EU adopted Council Directive (EU) 2020/285, which revised the VAT rules for small enterprises by introducing a simplified EU-wide SME Scheme. Effective from 1 January 2025, the scheme establishes a common maximum domestic or national threshold of €85,000 for small business exemptions and enables cross-border access to simplified reporting regimes under certain conditions, primarily if the taxable person's annual Union turnover does not exceed €100,000.

OSS and IOSS In 2021, the EU introduced the One-Stop Shop (OSS) and Import One-Stop Shop (IOSS) regimes as part of its e-commerce VAT package. These schemes aim to simplify VAT compliance for businesses engaged in cross-border digital and distance sales by centralizing VAT reporting obligations. However, OSS and IOSS are not threshold-exempt schemes. Instead, they provide optional registration platforms for businesses selling across EU borders, regardless of domestic registration thresholds.

Country-by-Country VAT Registration Threshold Overview Member StateVAT Registration Threshold for Resident Taxable PersonsVAT Registration Threshold for Non-Resident Taxable PersonsAustria€55,000No threshold - Non-resident taxable persons must register for VAT before engaging in taxable activities in AustriaBelgium€25,000No threshold - Non-resident taxable persons must register for VAT before engaging in taxable activities in BelgiumBulgariaBGN 100,000 (around € 51,000)No threshold - Non-resident taxable persons must register for VAT before engaging in taxable activities in BulgariaCroatia€60,000No threshold - Non-resident taxable persons must register for VAT before engaging in taxable activities in CroatiaCyprus€15,600No threshold - Non-resident taxable persons must register for VAT before engaging in taxable activities in CyprusCzech RepublicCZK 2 million (around €80,500)No threshold - Non-resident taxable persons must register for VAT 15 days from the end of the calendar month in which they began taxable activities in the Czech RepublicDenmarkDKK 50,000 (around €6,700)No threshold - Non-resident taxable persons must register for VAT before engaging in taxable activities in DenmarkEstonia€40,000No threshold - Non-resident taxable persons must register for VAT before engaging in taxable activities in EstoniaFinland€20,000No threshold - Non-resident taxable persons must register for VAT before engaging in taxable activities in FinlandFranceSupply of goods - €85,000

Supply of service - €25,000No threshold - Non-resident taxable persons must register for VAT before engaging in taxable activities in FranceGermanyTurnover did not exceed €22,000 in the previous calendar year and is not expected to exceed €50,000 in the current yearNo threshold - Non-resident taxable persons must register for VAT before engaging in taxable activities in GermanyGreeceNo threshold - Resident taxable persons must register for VAT before engaging in taxable activities in GreeceNo threshold - Non-resident taxable persons must register for VAT before engaging in taxable activities in GreeceHungaryNo threshold - Resident taxable persons must register for VAT before engaging in taxable activities in Hungary. However, small businesses with an annual turnover of less than HUF 18 million per year may apply for exemption.No threshold - Non-resident taxable persons must register for VAT before engaging in taxable activities in HungaryIreland€42,000 threshold applies to taxable persons who only supply services and those who make supplies of goods that fall within the scope of reduced or standard VAT rates, but are produced from zero-rated materials

€85,000 for the supply of goods and the supply of both goods and services where 90% or more of the turnover is from supplies of goods other than those subject to the €42,000 threshold

€41,000 for taxable persons making acquisitions from other EU Member StatesNo threshold - Non-resident taxable persons must register for VAT before engaging in taxable activities in IrelandItaly€85,000No threshold - Non-resident taxable persons must register for VAT before engaging in taxable activities in ItalyLatvia€50,000No threshold - Non-resident taxable persons must register for VAT before engaging in taxable activities in LatviaLithuania€45,000No threshold - Non-resident taxable persons must register for VAT before engaging in taxable activities in LithuaniaLuxembourg€50,000No threshold - Non-resident taxable persons must register for VAT before engaging in taxable activities in LuxembourgMaltaSupply of goods - €35,000

Other supplies - €30,000No threshold - Non-resident taxable persons must register for VAT before engaging in taxable activities in MaltaNetherlands€20,000No threshold - Non-resident taxable persons must register for VAT before engaging in taxable activities in the NetherlandsPolandPLN 200,000 (around €47,000)No threshold - Non-resident taxable persons must register for VAT before engaging in taxable activities in PolandPortugal€15,000No threshold - Non-resident taxable persons must register for VAT before engaging in taxable activities in PortugalRomaniaRON 300,000 (around €60,000)No threshold - Non-resident taxable persons must register for VAT before engaging in taxable activities in RomaniaSlovakia€49,790No threshold - Non-resident taxable persons must register for VAT before engaging in taxable activities in SlovakiaSlovenia€60,000No threshold - Non-resident taxable persons must register for VAT before engaging in taxable activities in SloveniaSpainNo threshold - Resident taxable persons must register for VAT before engaging in taxable activities in SpainNo threshold - Non-resident taxable persons must register for VAT before engaging in taxable activities in SpainSwedenSEK 120,000 (around €10,800)No threshold - Non-resident taxable persons must register for VAT before engaging in taxable activities in Sweden Note: Exchange rates are approximate as of 2025 and thresholds are subject to change.

Value added tax registration thresholds in the European Union

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