- The EU will introduce a special VAT scheme for SMEs starting 1 January 2025
- The scheme is designed to reduce administrative burdens for small businesses and promote fair competition and cross-border trade within the EU
- Current VAT rules only exempt businesses from VAT if they are established in the EU state where the VAT is due and meet the national turnover threshold
- The new scheme will also allow exemptions for small enterprises not established in the state where the VAT is due, under certain conditions
- Activities allowed under the SME scheme include selling goods and services without charging VAT and reducing VAT compliance obligations
- Enterprises must meet specific conditions to benefit from the exemption including being established in an EU member state and not exceeding certain turnover thresholds
- Small enterprises outside the EU are ineligible for the SME scheme
- Compliance for exempt businesses includes notifying their state of establishment, obtaining an identification number, and submitting quarterly reports on their sales in all member states
- The scheme aims to simplify VAT obligations and support small businesses in expanding their activities across EU borders
Source: taxathand.com
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.
