Special scheme for small undertakings 2020: From VAT limit to revenue limit

The tax decrease for the levy on VAT to the Tax Authorities will be abolished starting 2020. An entrepreneur that needs to pay less than €1.345 or €1.883 in VAT was allowed to keep that VAT (in part) until 2019. Instead, the administrative exemption of €20.000 revenue per fiscal year is erected. The administrative exemption means that you will no longer have a deduction on the paid VAT, but neither will you need to charge VAT. In fact, you no longer have to make an invoice and you will also no longer need to do a VAT-declaration.

Request exemption

When you want to make use (for it is a voluntary arrangement) of the administrative exemption, you will need to request the exemption with the Tax Authorities. When you make more than €20.000, you will need to cancel that exemption.

To consider:

There is a retention obligation of 7 years for your purchase invoices. There is no retention obligation for your sales invoices.

If you have fluctuating incomes or if you want to invest we do not recommend you request the exemption.

If you exceed the €20.000 you will need to cancel the exemption in time but submitting a cancellation form, charge the VAT, send invoices and do the VAT declaration. An exemption can only by requested three years later.

This also applies to legal entities such as a society, foundation, BV and NV in addition to the sole proprietorship, VOF and partnership

You will need to partially pay back the VAT on investment (laptop, phone, car, etc.) that you deducted if you make use of the exemption. The revision period VAT-deduction is dependent on the type of assets, but starts at 5 years. However, you will only need to pay if the payment exceeds €500.

Do you want to make use of the exemption for the tax year 2020? You will need to communicate this to the Tax Authorities before the 20th of november 2019.

Despite the exemption you will still need to declare your revenue taxes in certain cases. This has to do with cross-border matters. For example with the delivery or purchase of an (almost) new means of transportation from a client/supplier from another EU-country, purchase of supplies and services of a foreign entrepreneur, importing goods on which the reverse-charge applies, with distance sales above €10.000 or option VAT-taxed purchases from entrepreneurs from other EU-countries.