Being subject to VAT means that you have to charge VAT to your customers for your products or services. Besides the obligation to charge VAT to your customers, you can also as a self-employed person deduct the VAT that you pay on the goods or services that you buy for your business. Indeed, your suppliers also charge you VAT which you can then deduct from that which you pay back to the state.
Who is subject to VAT?
If your company provides, as an economic activity, on a regular and independent basis, goods or services which are described in the VAT Code, you are subject to VAT. Do you recognize yourself there? In this case, it is better to check whether your goods or services are subject to VAT. Some companies are exempt from VAT. Depending on your activities, there are three options:
- you are subject to VAT and therefore charge VAT to your customers (the majority)
- you are exempt from VAT and you do not have to charge it
- you are subject to mixed VAT by a combination of the two above cases
Who is exempt from VAT?
As a self-employed person, there is a good chance that you will be subject to VAT. However, there are exceptions. Some liberal professions and small businesses do not have to charge VAT and may request exemption from VAT returns. For the business calculator this is important.
Exemption for liberal professions and professions of a social nature
Certain liberal professions and the social sector are exempt from VAT. For example:
- doctors, dentists, physiotherapists, midwives, nurses
- geriatric institutions
- homemaking services
- care institutions for people with disabilities
- Schools etc.
Here you will find an overview of all activities exempt from VAT in accordance with Article 44 of the VAT Code.
VAT exemption for small businesses
Does your company record a turnover that does not exceed 25,000 euros? In this case, you can opt for the VAT exemption regime. You do not then have to charge VAT, but you cannot deduct it either. In fact, you are acting more or less like an individual.
If you fall into this category, it is important to think about the best solution. Do you want to be able to deduct VAT? You can then opt for a system of quarterly declarations in order to be able to deduct VAT. Here you will find an overview of the advantages and disadvantages of this exemption, so that you can make the best choice.
Are you subject to VAT as a complementary self-employed person?
To check whether a person is subject to VAT, it does not matter whether this activity is carried out on a complementary or main basis. Depending on the activity you carry out and your turnover, you may also be subject to VAT as a complementary self-employed person.
When are you a mixed taxable person?
If you carry out activities which are exempt from VAT in accordance with Article 44, in combination with activities which do not qualify for exemption from VAT, you are a mixed taxable person. You will only need to charge VAT for transactions subject to VAT. This means that only these transactions give you the right to deduct VAT.