What is VAT exemption?
VAT exemption is a special VAT regime that allows small businesses and self-employed individuals whose annual turnover does not exceed 25,000 euros excluding VAT to issue invoices without charging VAT to their customers.
In other words: you issue invoices without VAT, you do not have to pay it to the State, but you also cannot recover VAT on your business purchases.
Who can benefit from VAT exemption?
You can opt for exemption if:
- Your annual turnover is less than 25,000 euros (2024 threshold)
- You operate in Belgium
- Your activity is not explicitly excluded from the regime (doctors, lawyers, certain liberal professions have specific regimes)
Warning: the 25,000 euro threshold is assessed over the current calendar year AND the previous year. If you exceed it during the year, you must switch to the normal regime from the following month.
How to mention exemption on an invoice?
An invoice under the exemption regime must obligatorily contain the following legal statement:
"Regime de la franchise de la taxe — Vrijstellingsregeling van de belasting"
You do not include a VAT number on the invoice (or you include your business number without the VAT/BE prefix). You do not mention any VAT rate or amount.
VAT exemption vs normal regime: the comparison table
| Element | VAT exemption | Normal regime |
|---|---|---|
| VAT charged to customer | No | Yes (6%, 12% or 21%) |
| Recoverable VAT on purchases | No | Yes |
| Periodic VAT declaration | No | Quarterly or monthly |
| Annual VAT listing | No (if turnover < 25,000 euros) | Yes |
| Price received more attractive | Yes (for individuals) | No |
When is it better to opt for the normal regime?
VAT exemption is not always advantageous. Switch to the normal regime if:
- You work mainly with businesses (they recover VAT anyway)
- You have large business purchases on which you want to recover VAT
- You are approaching the 25,000 euro threshold — it's better to plan ahead
- You want to project a more professional image with a VAT number
Ledgerly manages both regimes
Whether you are under exemption or in normal regime, Ledgerly automatically adapts your invoices: exemption legal statement, absence of VAT, or Belgian rates (6/12/21%). You have nothing to configure manually.