For sole proprietors

If you already are or are planning to become a sole proprietor (a self-employed person), you can find all the information about entrepreneurship, registration as a sole proprietor and tax liabilities on this page. You may also find the sole proprietor's tax calendar and advice about keeping accounts, submitting declarations and paying taxes helpful.

Determination of time of registration obligation

(reaching supply of 40 000 euros)

If a sole proprietor’s taxable supply did not exceed 200 000 euros in the previous calendar year or as of the beginning of the current calendar year, he/she can choose (voluntary) whether to act on keeping accounting for taxation purposes according to the general procedure for VAT accounting provided for in the VAT Act (accrual based VAT accounting) or according to the special arrangement set out in  § 44 of the VAT Act (cash based VAT accounting).

If the limit mentioned above (200 000 euros) was exceeded during the previous calendar year or at the beginning of the current calendar year, the VAT accounting is to be kept according to the general procedure.

On calculation of the limit of taxable supply, the sole proprietor may choose whether to act according to the general procedure provided for in the VAT Act or to the special arrangement provided for in § 44 of the VAT Act.

According to the general procedure,  the time of creation of supply is deemed to be the date on which the first of one of the following acts is performed:

  • the goods are dispatched (the services are provided) to the purchaser or
  • money is received for the goods (services).

According to the special arrangement the time of supply is deemed to be the date on which the money was received for the goods (services). A sole proprietor who applies the special arrangement has to keep records of the registration obligation threshold on the cash basis as well.

Example 1

The goods were dispatched (services were provided) earlier than the money was received.

Invoice 1 January 20  9835 euros Payment on 17 February   in the amount of 9835 euros
Invoice 2 February 10  11 113 euros Payment on 1 March in the amount of 11 113 euros
Invoice 3 March 14  9835 euros Payment on 20 April

in the amount of     9835 euros

Invoice 4 April 10  9835 euros Payment on 26 May in the amount of  9835 euros
In total: 40 618 euros


Upon keeping the accounting pursuant to the general procedure, the supply exceeded 40 000 euros on 10 April, and pursuant to the receipt of the money or upon keeping the cash accounting, the supply exceeded 40 000 euros on 26 May. In both cases the sole proprietor is required to submit the application for registration as a person liable to value added tax within three working days at the latest. The sole proprietor is required to add value added tax on all invoices of the same day (in the example, 10 April or 26 May).

Example 2

The goods were dispatched (services were provided) at the same time when the money was received (for example, in the case of retail business). The payment was made in cash for the goods or services as follows:

January 3678 euros
February 3551 euros from the beginning of the year 7229 euros
March 4317 euros from the beginning of the year 11 546 euros
Aprill 4317 euros from the beginning of the year 15 863 euros
Mai 4637 euros from the beginning of the year 20 500 euros
Juuni 4317 euros from the beginning of the year 24 817 euros
Juuli 3998 euros from the beginning of the year 28 815 euros
August 3998 euros from the beginning of the year 32 813 euros
September 4307 euros from the beginning of the year 37 120 euros
1 October
2 October
3 October
4 October
696 euros
728 euros
696 euros
765 euros
In total: 40 005 euros


Both in the case of the general procedure and in the case of the cash accounting, the supply exceeded 40 000 euros on 4 October.
The sole proprietor is required to submit the application for registration as a person liable to VAT within three working days at the latest. The sole proprietor is required to add VAT on all invoices of the same day (e.g. 4 October).

Last updated: 27.01.2022

Last updated: 10.12.2021

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