New regulations for Small Businesses operating within EU effective from 1st January 2025

Starting from 1st of January 2025 there will be new regulations for small businesses established and operating within the European Union.

Currently each Member State has a threshold below which VAT registration for a resident company is not required (the so-called “small trader” regulation). However, under current regulations, such traders may be required to VAT register from the very first sale made in any other Member State. As from 1st January 2025, small businesses will be able to use the new exemption in all Member States, under the condition that their total annual turnover of taxable sales within the European Union does not exceed EUR 100,000.
Each country will set its own threshold, however as per the regulations this cannot be higher then EUR 85,000 per annum.

Businesses which chose to avail the exemption scheme, and who remain under this annual threshold, will not have to charge VAT on their taxable supplies, nor will they be obligated to submit periodic VAT Returns in the Member State in which the sales are made. Nonetheless, they will need to report their turnover to the responsible tax office in their country of establishment.
The above changes result from the European Directive initiated in 2020 to support small businesses.