- As of 1 January 2025, a new VAT regime for small enterprises, known as the SME scheme, was introduced by the EU.
- The scheme aims to simplify VAT compliance and reduce administrative burdens for SMEs across multiple Member States.
- Changes include VAT exemptions beyond home countries, harmonization of VAT exemption thresholds, and streamlined compliance.
- Malta amended its VAT Act to align with the new scheme by introducing Articles 11A and 11B.
- Before 2025, SMEs faced a fragmented VAT system with domestic-only exemptions, requiring registration in each EU country of operation.
- The new scheme allows SMEs with annual turnover under €100,000 across the EU to extend VAT exemptions to cross-border transactions.
- SMEs must also stay within national exemption thresholds in each Member State to qualify.
- Example: A Maltese business with €90,000 EU-wide turnover qualifies for cross-border VAT exemption, while another with €105,000 does not.
Source: rsm.global
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.
