EU Unveils VAT Reform to Ease Burden on Small Businesses

Anew EU model is paving the way for changes to the VAT exemption authorities for small businesses and self-employed professionals, aiming to boost the competitiveness of SMEs and simplify cross-border trade procedures.

The European Union’s updated VAT Directive, which is expected to beryllium transposed into nationalist law, sets the stage for an summation successful the yearly turnover threshold that allows businesses to merchantability goods and supply services without charging VAT.

Key Provisions of the Directive

According to sources, 1 of the scenarios presently under information involves raising the existent home turnover threshold for VAT exemption from 10,000 euros to astir 15,000 euros. This would broaden the fig of small businesses eligible for exemption within their ain country.

Officials stress that immoderate accommodation will beryllium measured, arsenic a important summation could effect successful too galore businesses being exempted, perchance reducing nationalist revenue.

Under the Directive, EU subordinate states tin acceptable a home VAT exemption threshold of up to 85,000 euros successful yearly turnover. For businesses operating crossed much than 1 subordinate state, the headdress rises to 100,000 euros.

This caller system is expected to importantly trim administrative burdens for small businesses, strengthen their competitiveness, and facilitate enlargement into different EU markets by removing bureaucratic barriers.

Implementation and Next Steps

To assistance businesses prepare, Greece’s Independent Authority for Public Revenue (AADE) has issued an informational bulletin outlining the upcoming changes. The extremity is to guarantee small enterprises are acceptable to take vantage of the new, much favorable authorities erstwhile it is officially adopted into Greek law.

How the System Will Work

To beryllium included under different EU subordinate state’s special SME VAT regime, a concern will lone request to submit a notification petition to its nationalist tax authority. This petition indispensable see information connected its past and existent year transactions crossed each EU subordinate states.

Because these are VAT-exempt activities, businesses opting into different subordinate state’s SME authorities will beryllium required to submit quarterly reports to their location country’s tax authority. These reports will item their transactions each quarter, allowing authorities to show compliance with some home and EU-wide exemption thresholds.