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VAT Exemption Thresholds in Europe, 2021


All countries covered in today’s map levy Value-Added Taxes (VAT). However, to reduce compliance and administrative costs, most countries have VAT exemption thresholds: If a business is below a certain annual revenue threshold, it is not required to participate in the VAT system. This means that small businesses—unlike businesses above that threshold—do not collect VAT on their outputs sold to customers but also cannot receive a refund for VAT paid on business inputs.

The following map looks at VAT exemption thresholds in European OECD countries.

VAT Exemption Thresholds in Europe 2021

The United Kingdom has the highest VAT exemption threshold, at €95,538 (US $109,123). Switzerland and France follow, at €93,414 ($106,698) and €85,800 ($98,001). Spain and Turkey are the only countries that do not have a threshold, meaning that all businesses are in the VAT system.

Countries around the world introduced various fiscal measures to counteract the economic distress caused by COVID-19. One measure—among many others—has been to make changes to VAT, such as delaying payments, speeding up refunds, or reducing rates. These measures can provide great relief for many businesses and in some cases for consumers as well.

However, it is important to keep in mind that due to the VAT exemption thresholds many small businesses have not benefited from the VAT changes introduced to provide relief during this crisis. For example, VAT payment extensions and interest-free late payments—such as implemented in various countries—have provided little direct relief for businesses that are below the threshold.

VAT Collection Thresholds, as of January 2021
Annual Revenue Threshold below which VAT Collection Is Not Mandatory
Country National Currency Euros U.S. Dollars
Austria (AT) EUR 35,000  €35,000  $39,977
Belgium (BE) EUR 25,000  €25,000  $28,555
Czech Republic (CZ) CZK 1,000,000  €37,800  $43,175
Denmark (DK) DKK 50,000  €6,708  $7,661
Estonia (EE) EUR 40,000  €40,000  $45,688
Finland (FI) EUR 10,000  €10,000  $11,422
France (FR) EUR 85,800  €85,800  $98,001
Germany (DE) EUR 22,000  €22,000  $25,128
Greece (GR) EUR 10,000  €10,000  $11,422
Hungary (HU) HUF 12,000,000  €34,164  $39,022
Iceland (IS) ISK 2,000,000  €12,937  $14,777
Ireland (IE) EUR 75,000  €75,000  $85,665
Italy (IT) EUR 65,000  €65,000  $74,243
Latvia (LV) EUR 40,000  €40,000  $45,688
Lithuania (LT) EUR 45,000  €45,000  $51,399
Luxembourg (LU) EUR 30,000  €30,000  $34,266
Netherlands (NL) EUR 20,000  €20,000  $22,844
Norway (NO) NOK 50,000  €4,663  $5,326
Poland (PL) PLN 200,000  €45,015  $51,416
Portugal (PT) EUR 12,500  €12,500  $14,278
Slovak Republic (SK) EUR 49,790  €49,790  $56,870
Slovenia (SI) EUR 50,000  €50,000  $57,110
Spain (ES) None  None  None
Sweden (SE) SEK 30,000  €2,861  $3,268
Switzerland (CH) CHF 100,000  €93,414  $ 106,698
Turkey (TR) None None None
United Kingdom (GB) GBP 85,000  €95,538  $ 109,123

Notes: All countries covered allow businesses below the threshold to register and account voluntarily for VAT. This gives small businesses the option to avoid the disadvantages of non-registration, but also increases their compliance and administrative costs.

Thresholds in countries that have a national currency other than the Euro were converted to Euros using 2020 exchange rates. The conversion to U.S. dollars is also based on 2020 exchange rates.

Source: OECD, Under Taxes on Consumption, “VAT/GST: Registration/Collection Thresholds (2021),” https://www.oecd.org/tax/tax-policy/tax-database/.

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