With the aim of reducing administrative burdens and compliance costs, small businesses in the European Union (EU) will have simpler value added tax (VAT) rules from the 1st of January 2025. The EU Council announced it, and added that these new tax rules provide «small businesses to benefit from simplified rules on compliance with VAT obligations if their annual turnover is below a threshold set by a Member State concerned», which cannot be higher than 85,000 EUR. Still, 'under certain conditions, small enterprises from other Member States that do not exceed this threshold may also benefit from the simplified system if their total annual turnover in the whole of the EU does not exceed 100,000 EUR," explained the Council. Furthermore, «the current VAT system provides that the VAT exemption for small businesses is only available to national enterprises», but with the reform now agreed, it will be possible to apply an exemption similar to small businesses established in other Member States.
