VAT basics
VAT (Value Added Tax) is a consumption tax collected by businesses on behalf of the government. As a freelancer, whether you need to charge VAT depends primarily on your annual turnover relative to your country's registration threshold.
Registration thresholds (2026)
| Country | Standard threshold | | -------------- | ----------------------------------- | | France | €36,800 (services) | | Germany | €22,000 | | Spain | No threshold — register immediately | | Switzerland | CHF 100,000 | | United Kingdom | £90,000 |
Once you exceed the threshold, you must register and start charging VAT. You can also voluntarily register before reaching the threshold — useful if your clients are VAT-registered businesses.
Invoicing rules when VAT-registered
When you are VAT-registered, every invoice must show:
- Your VAT registration number
- The VAT rate applied to each line item
- The VAT amount per line
- Net total, VAT total, and gross total
Invoicing rules when VAT-exempt
If you are below the threshold, include a note on each invoice such as:
"VAT not applicable under Article 293B of the French Tax Code" (France) "Kleinunternehmerregelung gemäß § 19 UStG" (Germany)
Reclaiming input VAT
Once registered, you can reclaim VAT on business purchases (equipment, software, services). This is one of the main benefits of voluntary registration for freelancers with high expenses.
Filing and deadlines
- Most countries require monthly or quarterly VAT returns
- File even if no VAT was collected in a period (nil return)
- Late filing penalties can be significant — set calendar reminders
Bottom line
Understanding your VAT status is essential before sending your first invoice. Invoice Creator automatically handles VAT display based on your country profile — ensuring your documents are compliant from day one.