The 2021 Budget brought with it an increase in the turn-over threshold under which service providers register or remain eligible for registration, as “exempt persons”, under Article 11 of the VAT Act.

The VAT Act states that those persons who provide taxable supplies, or, are exempt with credit supplies that do not exceed the stipulated thresholds, may opt to register under Article 11 instead of Article 10. Such persons would not charge VAT on their supplies but neither would they be eligible to claim credit for input tax they incur.

With effect from 1st July 2021, the stipulated threshold under Article 11 have been increased as follows:

Low Value Added economic services:

  • Entry threshold from € 24,000 to € 30,000
  • Exit threshold from € 19,000 to € 24,000

Other economic activities and services:

  • Entry threshold from € 20,000 to € 30,000
  • Exit threshold from € 17,000 to € 24,000

from €20,000 (high value added) and €24,000 (low value added) to €30,000 in a period of 12 calendar months.

Persons taxable under Article 11 are obliged to assess if their turn-over during the previous 12 calendar months, would have exceeded the Entry Threshold. In order to remain registered under article 11, as from the 1st July 2021, this threshold shall no longer be calculated at €24,000 or €20,000 but at €30,000.

A person qualified to remain registered under article 11, has the option to convert his registration to article 10 at any time.

Persons registered under Article 10 cannot change their registration to Article 11 prior to the passing of 24 full calendar months under Article 10. As from 1st July 2021 the change of registration can only occur if the turn-over for a relevant period of 12 calendar months would not have exceeded the Exit Threshold of €24,000 instead of €19,000 or €17,000.

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