This initiative introduces a simplified VAT framework for small businesses across the EU, helping to reduce compliance burdens and unlock new cross-border opportunities.
Key Benefits of the SME VAT Scheme:
- VAT exemptions for eligible SMEs: Businesses can sell goods and services without charging VAT, easing operational complexity.
- Simplified registration: A single registration process in the business’s home Member State allows businesses to apply for VAT exemptions in other Member States.
- Reduced compliance obligations: SMEs can benefit from consolidated quarterly reporting and simplified invoices, depending on the Member State.
The scheme applies to EU-based small businesses with a total annual turnover across all 27 Member States not exceeding €100,000. Businesses must also meet national thresholds set by the Member State(s) where they intend to apply the exemption.
Non-EU businesses are not eligible. Participation in the scheme is optional, allowing SMEs to tailor it to their needs.
Tools and Support for SMEs:
To support businesses in transitioning to the new scheme, the European Commission has launched an SME VAT Portal with the following resources:
- Country-specific details on national thresholds and implementation.
- An SME VAT simulator to help businesses determine their eligibility.
- A centralised database to validate EX numbers issued to SMEs under the scheme.
