The New EU VAT Special Scheme for Small Enterprises as of 1 January 2025

The special VAT scheme for small enterprises was introduced in the European Union in 1977. Precisely for this reason, a review and update are necessary. The main change to be introduced in 2025 is the possibility of applying the VAT exemption, under certain circumstances, to cross-border transactions. While it sounds like a good initiative, putting such an exemption into practice can be complicated. With regard to some of the formal obligations of the special scheme, while they appear to be a simplification, they may not be so in practice. In addition, SMEs will have to keep an exhaustive control of their volume of operations in order not to be suddenly excluded from the scheme. This situation would imply significant complications for them. In this article, the author explains the main intricacies of the new VAT special scheme for SMEs.