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New Simplified VAT Scheme for Small and Medium-Sized Enterprises (SMEs) in the EU

We would like to inform you of significant changes to the European Union’s VAT regime, which have now come into effect. The new rules are designed to substantially reduce administrative burdens and support the cross-border growth of small businesses within the single market.

What is Changing?

Until now, small businesses could only benefit from a VAT exemption in the Member State in which they were established. Under the new scheme, eligible SMEs may also benefit from VAT exemptions in other EU Member States where they conduct business, even if they do not have a permanent establishment in those jurisdictions.

Eligibility Criteria

To qualify for the new scheme, a business must meet all of the following criteria:

  • Total Annual EU Turnover: Must not exceed €100,000
  • Domestic Turnover: Must not exceed the national exemption threshold of the Member State where the exemption is requested (up to €85,000, depending on the country)

Key Benefits and Simplifications

The reform introduces several important advantages for businesses:

  • Single Registration: Applications for VAT exemptions in other Member States can be submitted through a single procedure in the country of establishment
  • Reduced Administrative Burden: Businesses may submit a single quarterly report and issue simplified invoices
  • No VAT Charges: Eligible businesses can supply goods and services without charging VAT, enhancing their competitiveness

Support Tools

The European Commission has launched an official platform providing guidance, information, and practical tools to support the implementation of the Special VAT Scheme for SMEs across the EU ( https://sme-vat-rules.ec.europa.eu/index_en )

For further information or assistance, please do not hesitate to contact us.