Knowledge base

    VAT exemptions in SmartAccount

    SmartAccount supports three types of VAT exemption for sales invoices, depending on the status of your company or sole trader business and the type of invoice you issue.

    This guide will help you understand when to use each type of exemption and what it means.

    Types of exemption

    1. Reverse charge

    "Exempt from VAT under Article 17 of the Value Added Tax Act (reverse charge)."

    When to use it:

    • Your company or sole trader business must have a VAT ID number
    • The invoice is not fiscalised
    • The invoice is not an e-invoice

    This option is intended for invoices to foreign companies where the VAT liability is transferred to the invoice recipient.

    2. Not VAT-registered

    "Exempt from VAT under Article 90(1) of the Value Added Tax Act (not a VAT taxpayer)."

    When to use it:

    • Your company or sole trader business is marked as not VAT-registered
    • This option is automatically preselected for these companies or sole trader businesses

    3. PPO (domestic reverse charge)

    "Reverse charge under Article 75(3)(a) of the VAT Act."

    When to use it:

    • Your company or sole trader business must have the PPO feature enabled
    • Your company or sole trader business must be VAT-registered

    PPO is used in specific situations, such as construction work, property transactions and other activities where VAT liability is transferred to the recipient.

    How the app works

    For a VAT-registered company or sole trader business

    • Available options: "No exemption", "Reverse charge" (subject to conditions), "PPO" (if enabled)
    • Default option: "No exemption"

    For a company or sole trader business that is not VAT-registered

    • Available options: "Not VAT-registered" (automatically selected), "Reverse charge" (subject to conditions)
    • PPO is unavailable because it does not apply to companies or sole trader businesses that are not VAT-registered

    For fiscalised invoices or e-invoices

    • "Reverse charge" is unavailable because it is not compatible with fiscalisation and e-invoices

    Display on the invoice

    When you select an exemption, in the totals table:

    • VAT is shown as EUR 0.00
    • An explanation of the exemption appears below the VAT amount
    • Invoice items retain their VAT percentages, but 0% is used to calculate the total

    Good to know

    • • The exemption applies to the whole invoice, not individual items
    • • The app automatically validates the available options based on the status of your company or sole trader business
    • • For companies or sole trader businesses that are not VAT-registered, the exemption is automatically preselected and cannot be removed

    Missing an option?

    If an exemption option you should have is missing in the app (such as PPO or Reverse charge), please get in touch. Our team will check your settings and enable the required features.

    For further questions, please contact us.