- The EU will implement a revised VAT scheme for SMEs starting January 1, 2025
- The new scheme is designed to reduce administrative burdens and promote cross-border trade within the EU
- The original VAT SME scheme was introduced to alleviate compliance burdens for small businesses but was limited to domestic transactions
- The updated scheme allows for cross-border VAT exemptions and simplifies compliance processes
- Current domestic exemptions are limited to transactions within the SME’s home country with varying turnover thresholds
- From 2025, SMEs can claim VAT exemption for turnovers up to €85,000 within their home country
- A new union annual threshold of €100,000 is set for SMEs engaging in cross-border transactions within the EU
- SMEs exceeding the €100,000 threshold across the EU will need to adhere to standard VAT rules
- A unified VAT identifier with an EX suffix will be introduced for easier reporting and verification across member states
- SMEs must notify their home tax authority of their participation in the scheme and provide anticipated turnover details for effective monitoring and compliance
Source: vatabout.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.
