[Glossary](https://pecuvo.eu/en/glossary/) · Income and taxes # VAT registration **In short:** VAT registration is entering a business or self-employed person with the tax authority as someone who charges VAT on sales and pays it over; it becomes compulsory above a legal turnover threshold. **Simply put:** Below the threshold, a small business often does not charge VAT. Once turnover passes it, registration is compulsory within a short deadline. You can also register voluntarily. After registering, either the client's price rises or the margin falls — work it out in advance. **Example:** A small workshop has €48,000 turnover this year and expects a large order. The owner tracks when the threshold will be passed and works out in advance how VAT will change the prices. **The EU rule:** countries may exempt small enterprises whose annual turnover in that country does not exceed a national threshold of no more than €85,000 (Directive 2006/112/EC, Article 284, as amended by Directive (EU) 2020/285, from 1 January 2025). > **Example: Bulgaria** — compulsory registration when taxable turnover in the country exceeds **€51,130** a year (from 01.01.2026; VAT Act, Article 96(1)); apply within 7 days of passing it. > > **Check in your country** — The threshold and the deadline, at the tax authority. **Source:** Directive (EU) 2020/285: https://eur-lex.europa.eu/eli/dir/2020/285/oj · NRA (Bulgaria): https://nra.bg/wps/portal/nra/taxes/dds-v-balgariya/registratsiya-po-zdds ## In depth in the modules - [Module 27](https://pecuvo.eu/en/modules/taxes-and-public-spending/) - [Module 20](https://pecuvo.eu/en/modules/income/) - [Module 18](https://pecuvo.eu/en/modules/flow-3-the-small-business/) ## Related terms - [VAT (value added tax)](https://pecuvo.eu/en/glossary/vat/) - [Freelance profession](https://pecuvo.eu/en/glossary/freelance-profession/) - [Sole trader](https://pecuvo.eu/en/glossary/sole-trader/) - [Limited liability company](https://pecuvo.eu/en/glossary/limited-company/) - [Invoice](https://pecuvo.eu/en/glossary/invoice/)