Small business VAT exemption

What is the small business VAT exemption?

The small business VAT exemption is a special scheme for small businesses: below €25,000 of annual turnover excluding VAT generated in Belgium, the self-employed person invoices customers without VAT. They remain a VAT taxpayer, but do not collect the tax and do not deduct it on their purchases.

The scheme is set out in Articles 56bis to 56undecies of the VAT Code, rewritten by a law of 21 March 2024. It only concerns taxable activities: a self-employed person whose transactions are all exempt, as is the case for much healthcare, has no need for it.

What the exemption changes day to day

Above all, it lightens the paperwork. No VAT to add to invoices, no periodic return to file, no VAT to pay over to the tax authority. The price invoiced to the customer is the final price.

The downside lies in purchases: the VAT paid on tools, computer equipment or a van becomes a cost, since it cannot be recovered. Invoices must also carry a statement that the business falls under the exemption scheme.

• Invoices issued without VAT, stating that the exemption scheme applies.
• No deduction of the VAT paid on purchases and investments.
• No periodic VAT return.
• An annual customer listing and, for Belgian business customers, invoicing through Peppol.

What remains mandatory under the exemption

Two obligations remain. Every year, the annual customer listing is due by 31 March; since 2026, it also reports the total supplies of goods and services made in Belgium the previous year, or a nil amount if there were none.

Next, the exemption does not exempt you from e-invoicing: invoices to Belgian VAT-registered businesses go through [Peppol](/fr/glossaire#peppol), and you must be able to receive your suppliers' invoices through the same channel.

When the exemption becomes a poor choice

The exemption pays off when you sell mainly to private individuals, who cannot recover VAT, and buy little. It is less attractive when your customers are VAT-registered businesses: for them, the VAT charged is neutral, since they deduct it.

The sums also turn in the year of a large investment: under the normal scheme, the VAT on a machine or a commercial vehicle is recovered; under the exemption, it is lost. The scheme is a choice, and you may prefer the normal scheme. Rates and returns are covered on the page [VAT for the self-employed](/fr/fiscalite/tva).

Exceeding the threshold, and selling elsewhere in Europe

The threshold applies to turnover for the calendar year. Exceeding it takes you out of the scheme: you must then charge VAT, deduct it and file returns. The exact moment of the switch follows rules revised on 1 January 2025; have them checked by an accountant before you approach the limit.

Since the same date, the SME scheme allows a small business established in Belgium to benefit from the exemption in other Member States too, provided its annual turnover in the Union does not exceed €100,000. It requires prior notification and quarterly turnover reports.

Not to be confused with

The terms close to Small business VAT exemption and what sets them apart.

Small business VAT exemption and the Article 44 exemption

That exemption covers certain activities, whatever the turnover: much healthcare, education, some cultural services. The small business exemption depends on the size of the business: it covers normally taxable activities, as long as turnover stays below the threshold.

Small business VAT exemption and the secondary occupation threshold

The exemption threshold concerns turnover and VAT. The threshold for self-employment as a secondary occupation concerns net income and social contributions. Being below one says nothing about the other.

Further reading

• VAT for the self-employed
• Peppol
• Self-employed as a secondary occupation
• 80% rule
• ATN, Avantage de Toute Nature (benefit in kind, BIK, VAA in Dutch)
• Business expenses
• Company car
• All glossary terms

Small business VAT exemption: frequently asked questions