GlossaryEN1 min readUpdated: Jun 18, 2026

VAT liability waiver

Small service providers, sole traders, and start-ups often benefit from the option of a VAT liability waiver, which allows them to forgo the obligation to charge and remit value-added tax.

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Last updated: 18 June 2026Published: 27 January 2026

Source: https://de.wikipedia.org/wiki/Umsatzsteuer

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Definition & Explanation

Small service providers, sole traders, and start-ups often benefit from the option of a VAT liability waiver, which allows them to forgo the obligation to charge and remit value-added tax. This waiver is a voluntary or legally sanctioned act under which a business – typically below defined turnover thresholds or under a small business scheme – opts out of its VAT obligations. As a result, invoices are issued without VAT, simplifying administration and bookkeeping. The trade-off is the loss of input VAT recovery, which can be a significant disadvantage for businesses with substantial purchase costs. In the transport and logistics sector, the waiver warrants careful consideration, as cross-border services are often subject to specific VAT rules that may preclude or complicate its application.

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VAT liability waiver

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