ROUTE
The Small-Business VAT Exemption
The €25,000/€100,000 limits since 2025, the mandatory invoice line, the § 14c trap — and when waiving the status pays.
✓ Checked: 18/07/2026
Small business status exempts you from VAT: you charge none to clients and file no advance returns. That sounds unambiguously favourable, but the exemption has a flip side — you also cannot reclaim the input VAT on your own purchases.
› More about this route
This three-step route covers it all: how the rule works and which turnover thresholds it depends on, the practice of issuing invoices with the mandatory note about the exemption, and the annual cycle including crossing the threshold.
A separate and expensive trap is VAT shown on an invoice by accident. Anyone exempt who nevertheless states tax on a document owes it — even if they never intended to charge it. This rule regularly costs money to people who reuse someone else’s invoice template.
WHERE PEOPLE MOST OFTEN LOSE MONEY AND TIME
- Showing VAT on an invoice while exempt. Tax stated on the document must be paid over regardless of whether the client actually paid it.
- Forgetting the mandatory reference to the exemption. An invoice without a stated basis for exemption raises questions with clients and the tax office.
- Not watching turnover during the year. Crossing the threshold changes your status from the following year, and learning that retrospectively is expensive.
- Choosing the status purely for simplicity. With large purchases and business clients, waiving the exemption is often the better deal.
FREQUENTLY ASKED QUESTIONS ABOUT THIS ROUTE
What is the point of this status?▾
Exemption from VAT: you charge none to clients and file no regular advance returns. That simplifies bookkeeping noticeably, especially in your first year of activity.
What is the main drawback?▾
You cannot deduct input tax on your own purchases. Anyone buying substantial equipment or services with tax effectively makes those costs dearer by the tax amount.
What happens if I accidentally show tax on an invoice?▾
Tax stated on an invoice must be paid over to the tax office, even if you are exempt and were not entitled to charge it. Correction is possible but requires separate steps, so invoice templates belong checked immediately.
When is waiving the status worthwhile?▾
When your clients are businesses that reclaim the tax anyway, and when you have high taxed expenses. Waiving binds you for several years, so the decision is made by calculation rather than instinct.