Do I need to register for VAT?
You must register for VAT when your annual taxable turnover exceeds the threshold in your country. In the UK it is £90,000. In Ireland it is €85,000. In Cyprus it is €15,600. In Greece it is €10,000. In most EU countries the threshold is €35,000–60,000. You can also register voluntarily to reclaim input VAT on purchases.
VAT registration is mandatory once your turnover crosses the threshold, but you can register voluntarily before that. The advantage of voluntary registration is reclaiming input VAT on purchases — if you buy a lot of equipment or materials, the VAT you reclaim can exceed the VAT you owe. The disadvantage is the administrative burden: filing VAT returns, keeping VAT-compliant records, and charging VAT to customers (which may make you less competitive on price).
The threshold is based on rolling turnover, not calendar year. In the UK, for example, you must register if your turnover in the past 12 months exceeds £90,000, or if you expect it to exceed £93,000 in the next 30 days. Missing the registration deadline results in penalties and backdated VAT liability. Our compliance pages cover country-specific VAT rules in detail.
Once registered, you charge VAT on sales (output VAT) and reclaim VAT on purchases (input VAT). The difference is what you pay to the tax authority each period. If your input VAT exceeds output VAT, you receive a refund.
Related questions
Can I deregister from VAT if my turnover drops?
Yes. If your turnover falls below the deregistration threshold (typically the registration threshold minus a buffer), you can cancel your VAT registration. This reduces administrative burden but means you can no longer reclaim input VAT.
What happens if I do not register for VAT on time?
You become liable for VAT from the date you should have registered, plus penalties and interest. The penalty is a percentage of the VAT due, increasing with delay. Registering promptly when you cross the threshold avoids this.