On 1 July, I will start as a self-employed marketing consultant in secondary occupation. I don’t plan to earn more than €25,000 and question whether or not I should apply for a vAT exemption?
I read that if you mainly invoice companies, it is advisable to charge vAT. That companies find it difficult if you have an exemption.
Is that really the case?
Always start as subject to VAT if you invoice companies. You will benefit significantly.
If you make purchases from 1,210 euros:
Exempted from VAT: it costs 1,210 euros
Subject to VAT: it effectively costs 1,000 euros after VAT recovery.
While on the sales side, the same amount net ultimately comes in.
Exempted from VAT: invoice €2,000 with 0% VAT
Subject to VAT: invoice €2,000 with 21% VAT, but you still have to pay this via a vAT declaration.So you simply gain all the vAT on the purchase invoice. If you do it with Dexxter, being subject to VAT does not cost you anything extra. If you go to an accountant, well, that costs you what you would otherwise gain in vAT.
Thanks! Very clear and in line with what I was already planning to do.
You really should try it out for yourself. Even if you don’t have a company number yet, you can already go ahead.
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