If you are reading this article you will surely have an idea on how to open a VAT number. But what is the opening cost for VAT?
In this guide we will see how much it costs to open a VAT number and what are the most convenient ways to do it.
We will then provide you with information on when it is convenient to open it, what are the tax regimes you can choose from and what are the costs to consider.
VAT NUMBER OPENING COST: WHEN SHOULD YOU CHOOSE A VAT NUMBER?
Often aspiring entrepreneurs or freelancers ask themselves if there is a better and more convenient time to open a VAT number .
In reality, one cannot properly speak of convenience. When a person decides to undertake an economic activity, he must necessarily open the VAT number.
On the other hand, one may ask how much it is worth starting your own business, compared to working as an employee.
WHAT ARE THE ADVANTAGES AND DISADVANTAGES
If you work as an employee you will surely have a fixed salary. And probably a few thoughts related to work once your shift is over.
However, the salary is always the same, unless your contract provides for productivity bonuses.
If you work as an entrepreneur, you have to rely on your skills. You don’t have a boss who tells you what to do and who has your back.
You are your own boss. If you believe in yourself, you don’t like working for others and you think you have the grit and resourcefulness you need.
In addition to a good business idea. Then it is the right time to open a VAT number and start your career.
IF YOU WORK AS AN EMPLOYEE
Furthermore, if you work as an employee, your employer pays everything on your behalf: taxes, INPS , INAIL.
Working on your own, however, you have to provide for everything: pay your INPS contributions, taxes, any INAIL.
You can decide to entrust the management to an accountant, but you must still control the management.
You must also consider that if you carry out a business where you earn less than 5,000 euros a year, you probably don’t want to open a VAT number.
This is because you would not even cover the minimum costs (INPS, accountant, taxes).
VAT NUMBER OPENING COST: WHAT IS THE TAX REGIME TO ADDRESS
When you open the VAT number, the tax regimes to join are essentially three:
- Ordinary VAT;
- Flat rate, also known as “subsidized regime”.
- Minimum taxpayer regime.
The minimum regime no longer exists and you can no longer join it.
Often erroneously we speak of the flat-rate regime by calling it “minimums”, but in reality it is a new regime.
The flat-rate scheme does not expire. In fact, that of the minimums lasted only up to the 35 years of the entrepreneur, who then had to switch to the ordinary one.
The flat-rate regime, on the other hand, lasts forever, obviously maintaining the requirements to join it. In other words, it is an advantageous regime in terms of costs, for those who open a new business.
It is suitable for those who do not have very high earnings. Since by joining this regime you are exempt from paying the taxes provided for in the ordinary regime (VAT; IRPEF; Regional and municipal surcharges).
There is only a substitute tax to pay. The rate is single and equal to 15%, to be calculated on revenues.
This 15% should not be calculated on 100% of the revenues, but only on a part, which varies from 40% to 75% of the revenues, according to your ATECO code.
Furthermore, again according to your ATECO Code, your income must not exceed certain limits.
LET’S SEE WHAT IS THE COST OF OPENING THE VAT NUMBER
Opening a VAT number itself is free. Maintaining it instead has costs:
- The costs of the accountant;
- Expenses related to your business (possible rent of a room, bills, personnel, costs of raw materials, etc …)
- INPS contributions:
- Sole proprietorship: costs are fixed and equal to approximately 3,500 euros per year (minimum).
- Freelancer: INPS contributions are cheaper, because there is no fixed minimum. And they are applied as a percentage of your earnings. If you earn zero, you don’t have to pay any contributions. The INPS rate is around 25% of your revenues, so if you earn 10,000 euros in a year, for example, you will have to pay 2,500 euros for INPS.
HOW TO DO NOT PAY INPS CONTRIBUTIONS
There are two ways to open a VAT number, without INPS costs:
- Having a VAT number as a freelancer and not earning anything during the year (and it is not the best solution).
- Open the VAT number, in addition to a job as a full time employee at another company. In this case, the contributions are already paid by your employer. For this reason, there is no need for you to pay them for your company. And if you want more coverage and have a higher pension, you can pay them anyway. But you don’t have to.
You are now ready to start your business and open a VAT number.
You must make a choice on the tax regime to be adopted, following the tips that have been provided to you in this article.
As you have seen, the costs are not high when it comes to VAT. The important thing is to be aware of your abilities!