VAT Registration Threshold

A VAT registration threshold is the annual revenue level above which a business is legally required to register for VAT in a given country. Below the threshold, registration is optional — some businesses register voluntarily to reclaim input VAT. The threshold varies significantly by country and by the type of supply (domestic vs cross-border, goods vs services).

EU Threshold for Digital Services

For EU cross-border B2C digital services (SaaS, streaming, software, e-books), the threshold is €10,000 in total sales to EU consumers per calendar year — aggregated across all EU member states. Once you exceed €10,000 in EU B2C digital services sales, you must charge and remit VAT in each customer's country. The OSS scheme allows you to do this through a single registration rather than registering in each country. The €10,000 threshold was introduced in July 2021 as part of the EU VAT e-commerce package.

UK VAT Threshold

The UK VAT registration threshold is £90,000 in taxable turnover in a 12-month rolling period (as of 2024). This applies to UK-sourced revenue for UK-based businesses. For non-UK businesses selling digital services to UK consumers, there is no threshold — you must register from the first supply.

B2B vs B2C: Threshold Differences

The €10,000 EU threshold applies only to B2C sales (sales to private consumers without a VAT number). B2B sales to EU businesses using the reverse charge mechanism do not count toward the threshold — they are zero-rated in the seller's country and the buyer accounts for VAT in their own country. For a SaaS company selling primarily to businesses, the practical compliance path is VIES VAT number validation for B2B customers, and OSS registration once B2C EU consumer sales exceed €10,000.

EU member state domestic VAT registration thresholds

Domestic VAT thresholds apply to businesses established in that member state. They are distinct from the EU-wide €10,000 OSS threshold for cross-border digital services. For most SaaS companies selling cross-border, the €10,000 OSS threshold is the relevant number — not the domestic thresholds listed below.

OSS threshold vs domestic registration threshold

Developer context: why thresholds matter for your billing system

For a SaaS billing system, thresholds affect two routing decisions. First, if your EU B2C revenue is below €10,000/year, you can apply your home country's VAT rate to all EU B2C customers and remit it locally — no OSS needed. Your billing system only needs to implement this more complex routing once you cross the threshold. Second, domestic thresholds matter if you have a local subsidiary in an EU country — once that entity's local revenue crosses the domestic threshold, it must register for local VAT independently of the group's OSS registration.