- New EU rules from January 2025 aim to simplify VAT procedures for SMEs.
- The SME exemption scheme allows eligible SMEs to avoid VAT registration in other EU states.
- Introduced by Council Directive 2020/285 and implemented in Poland by the 2024 Act.
- Qualifying SMEs can choose VAT exemption in states other than their establishment.
- Previously, VAT exemptions were only domestic, requiring registration in each state.
- SMEs using the exemption cannot deduct input VAT on related purchases.
- Requirements include not exceeding turnover thresholds and registering with prior notification.
- SMEs must not operate in excluded sectors and the exemption must be implemented in the state.
- Only EU-established SMEs are eligible, excluding non-EU enterprises like those in the UK.
- A special tax identification system with an EX code is introduced for the SME procedure.
- The SME scheme and VAT OSS system cannot be used simultaneously.
Source: bdo.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.
