Opening an LLC – is it worth entering the VAT system immediately?

If your clients are exclusively companies and you don't have large initial investments, the situation is quite clear, but it requires tactical thinking about your earnings.

Here is how things stand in that specific scenario:

1. Why YES (Entering the system)

• Neutrality for clients: It is completely irrelevant to your clients (companies) whether they pay you 1,000 € without VAT or 1,000 € + 25% VAT. They do not treat that VAT as a cost, but offset it.
• Small costs add up: Even if you say there are no large investments, everyday costs like office rent, utilities, mobile phone subscriptions, fuel, office supplies, or small inventory have VAT included in them. If you are in the system, you get that VAT back. Outside the system, that VAT is a pure loss for you.
• Perception of seriousness: Unfortunately, in the business world, companies outside the VAT system are sometimes viewed as "small" or "beginners."

2. Why NO (Staying outside the system)

• Administrative peace: You don't have to worry about VAT forms every month or quarter.
• Cheaper bookkeeping: Accountants usually charge less to those who are not in the VAT system because they have significantly less work and responsibility.
• Price advantage (if you change your mind): If you accidentally decide to take a client who is a physical person or an association, you will be 25% more favorable to them than the competition.

Key Calculation

If you plan to invoice e.g. 3,000 € per month (without VAT):

• In the VAT system: You send the client an invoice for 3,000 € + 750 € VAT = 3,750 €. The client pays everything, you forward 750 € to the state (reduced by the VAT from your costs). Your revenue is 3,000 €.
• Outside the system: You send the client an invoice for 3,000 € (you do not write VAT). The client pays 3,000 €. Your revenue is 3,000 €.

See the difference? There is none in pure income, but in the first option, you can "extract" VAT from bills for mobile phones, electricity, or software subscriptions.

Conclusion

Since you work with companies, it pays to enter immediately even without large investments, because over the course of a year, you will save several hundred (or thousands) of euros on small costs that you would otherwise irreversibly give to the state through input invoices.