VAT threshold

The VAT threshold is the minimum annual turnover a business must reach before it is required to register for and charge Value Added Tax (VAT). If a business's sales are below this threshold, it doesn't need to add VAT to its prices or submit VAT returns. Once the threshold is exceeded, the business must register for VAT, charge it on sales, and remit the collected VAT to the tax authorities. The threshold varies by country and is designed to prevent smaller businesses from facing unnecessary administrative burdens until they grow beyond a certain size.