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EU VAT Rules for SMEs

This initiative introduces a simplified VAT framework for small businesses across the EU.

From 1st January 2025, EU small businesses can use VAT exemption in Member States, where they are not established. This can be done through a simple registration in the Member State of establishment, allowing them to fully benefit from EU internal market.

EU VAT for smes

Image source: European Commission

Key Benefits of the SME VAT Scheme

  • VAT exemptions for eligible SMEs: Businesses can sell goods and services without charging VAT.
  • 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.

Eligibility and Flexibility

  • 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. To check eligibility please use the European Commission Simulator.
     
    Please note:
    Non-EU businesses are not eligible for this scheme.
    For the purposes of this scheme, Northern Ireland businesses are considered non-EU and therefore cannot avail of the scheme.

For more information:

This European Commission article has more information about VAT rules for small enterprises: https://sme-vat-rules.ec.europa.eu/index_en

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Article published by the InterTradeIreland Trade Hub Team: October 2025