EU VAT changes as regards the special scheme for small enterprises : Council Directive (EU) 2020/285 Commission Implementing Regulation (EU) 2021/2007 : explanatory notes

The special scheme for small enterprises ('SME scheme') allows small enterprises to sell goods and services to their customers without charging VAT (VAT exemption) and to get some simplifications regarding their compliance and invoicing obligations. This scheme is optional, so small enterprises can decide to apply it - provided that they fulfil the conditions - or to stick to the standard VAT rules and charge VAT to their customers. These Explanatory Notes are triggered by the modification of the existing rules of application of the SME scheme. New rules will be applicable from 1 January 2025. The objective of the Explanatory Notes is to explain the functioning of the SME scheme based on the new rules and to provide a better understanding of legislation adopted at EU level and in particular Council Directive (EU) 2020/285 amending Council Directive 2006/112/EC (VAT Directive) and Regulation (EU) No 904/2010 on Administrative Cooperation.