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Sales tax, taxation of small businesses

There are significant VAT simplifications for small businesses.

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Detailed description

There are significant VAT simplifications for small businesses. Their sales are exempt from VAT. Therefore, they generally do not need to submit advance VAT returns to the tax office. However, the obligation to submit an annual VAT return remains.

 

Information

Prerequisites

A small business owner is an entrepreneur whose total net turnover does not exceed the following limits:

  • In the previous calendar year not more than 25,000 euros
  • Not more than 100,000 euros in the current calendar year.
  • In the year of establishment, the only thing that matters is that the limit of 25,000 euros is not exceeded.
  • The turnover that exceeds the respective limit is already subject to tax, while the turnover made up to that point remains tax-free.

Documents required

No

Please note

A small business owner is not allowed to include sales tax on his invoices. A small business owner cannot claim input tax deduction. However, he can waive the application of the small business regulation by declaring to the tax office and thus opting for standard taxation. The waiver is binding for 5 years.

Fees

No

Legal basis

Section 19 of the Sales Tax Act

Links on the Internet

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Keywords: VAT exemption value added tax

Last updated: 27.04.2025