EU Council Moves Forward with Simplified VAT Rules for Small Companies
The Council of the European Union, the European institution representing the position of the EU Member States, has come to an agreement for the simplification of VAT rules for small companies in Europe.
Among the many burdens on the shoulders of SMEs and companies in general there is the obligation to act as VAT collectors, taking from consumers the VAT that is charged on top of the products or services they sell and paying it back to the public administration during the fiscal year. For small companies this is a demanding task as the proportional cost to manage this process is a lot more preponderant than on larger companies, which have more resources to assign to conduct it.
In light of this consideration, the existing VAT system in many EU countries foresees some exemptions for small enterprises, but, at the moment, only available to domestic players within the specific country.
We are glad to see that the reform agreed by the Council now enables to apply similar VAT exemption to small enterprises established in other Member States.
The text states that small enterprises will be able to qualify for simplified VAT compliance rules in case their annual turnover remains below a threshold set by the Member State concerned, which can not be higher than 85.000€. Under certain conditions, small enterprises from other Member States, which do not exceed this threshold, will also be able to benefit from the simplified scheme if their total annual turnover in the whole of the EU will not exceed 100.000€.
Together with this reform, the approved text also commits to an improvement of the design of the exemption, with the purpose of further reducing VAT compliance costs.
We are happy to see this an effort to diminish the bureaucratic obligation that SMEs in Europe have to face every year and, while a small step, it is indeed going in the right direction, not only helping SMEs, the backbone of the European economy, to save money and time but also simplifying their access to the Single Market by cutting red tape.
vorheriger Artikel nächster Artikel