- Starting January 1, 2025, a new VAT regime for small enterprises will be implemented
- The regime includes a special VAT exemption for sales, simplifying compliance and reducing administrative burdens
- Businesses using the VAT exemption will lose the right to deduct VAT on expenses related to their exempt sales
- Eligibility for the SME scheme is limited to small enterprises with an annual turnover of up to EUR 100,000 across all EU Member States
- Non-EU enterprises and businesses in the United Kingdom are not eligible for the scheme
- Member States can set their own turnover thresholds up to EUR 85,000 for VAT exemption eligibility
- Sectoral thresholds may be applied, with tax authorities deciding on the applicable threshold for businesses qualifying for multiple thresholds
- The scheme now allows for VAT exemption on cross-border transactions within the EU
- A union-wide annual turnover threshold of EUR 100,000 is set for the cross-border SME scheme
- Simplified compliance measures include single registration in the Member State of establishment, quarterly reporting, and simplified invoicing
- Most goods and services are eligible for VAT exemption, with some exceptions
- Conditions for applying vary between the domestic and cross-border SME schemes
- Detailed information and eligibility assessment tools are available on the campaign materials page and through an eligibility simulator
Source: tra.org
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
