Sales tax, also known as value added tax, is levied on various transactions, for example:

• if you sell goods or services,
• When importing goods from countries outside the European Union (the so-called import VAT is levied by customs),
• when purchasing goods from other countries of the European Union, which is referred to as an intra-Community acquisition.

As a business owner, you must remit the VAT you have collected to the tax office. At the same time, under certain conditions, you have the right to reclaim input tax. Input tax is the VAT you yourself paid on purchases for your business.

You determine the difference between the VAT you collect and the input tax you pay in your preliminary VAT return. This difference is then either paid to the tax office or refunded by them.

You do not need to submit a monthly VAT return if:

• Your sales are exempt from VAT and you are not entitled to input tax deduction,
• You are a small business owner and do not have a VAT identification number or
• They apply the special regulation for flat-rate agriculture and forestry.

If your total VAT liability last year did not exceed €2,000, the tax office may exempt you from the obligation to submit regular VAT returns. In this case, you only need to submit an annual VAT return.

If you are just starting your business, whether you need to submit a preliminary VAT return depends on the expected amount of VAT for the current year. From the second year onwards, the actual tax from the previous year is converted into an annual tax and used as the basis for calculation.