Can I run an online store under the flat-rate regime?
The flat-rate regime is the most common choice for a small e-commerce. The delicate point is not the threshold but input VAT: you cannot deduct it, so on low-margin products the maths can turn against you.
Short answer
- The flat-rate regime applies up to €85,000 of annual revenue.
- For retail trade the profitability coefficient is 40%: tax is applied to 40% of revenue, not to actual profit.
- The substitute tax is 15%, reduced to 5% for the first five years if the new-business requirements are met.
- You do not charge VAT on invoices and cannot deduct VAT on purchases or shipping.
- Passing €100,000 in revenue means leaving the regime in the current year itself.
Flat-rate versus standard regime
What changes for an online store
| Aspect | Flat-rate | Standard |
|---|---|---|
| VAT on sales | Not charged | Charged at the product rate |
| Input VAT | Full cost, not deductible | Deductible |
| Deductible costs | Lump-sum: only the coefficient counts | Itemised, cost by cost |
| Suited to | High margins, few purchases | Low margins, heavy stock |
A practical example
Example: a store collects €50,000 in a year. With the 40% coefficient the taxable base is €20,000. Social-security contributions paid are deducted from it; the remainder is taxed at 15% (or 5% in the first five years). But if the goods purchased cost €30,000 plus VAT, that VAT stays a cost: under the standard regime it would have been deducted.
Common mistakes
- Picking the flat-rate regime by habit on a low-margin catalogue, where non-deductible VAT costs more than the saving.
- Forgetting that gross revenue, not profit, counts towards the €85,000 threshold.
- Not watching the €100,000 threshold, which triggers immediate exit and VAT from that point on.
- Forgetting that sales to consumers in other EU states still follow the distance-selling rules.
How 4shopy helps
- Prices can be configured with or without displayed VAT, consistently with the chosen regime.
- The dashboard shows year-to-date revenue, so the threshold does not surprise you in December.
- Order exports are ready for bookkeeping, with no intermediate spreadsheets.
- Sales documents are generated in the 4b2b ecosystem carrying the applicable regime wording.