The Minister for Finance, Paschal Donohoe has recently signed the statutory instrument transposing Council Directive (EU) 2020/285 on the special VAT scheme for small enterprises into Irish law (“the SME scheme”).
From 1 January 2025, the SME scheme allows small enterprises to avail of the VAT registration thresholds in other Member States. If eligible, businesses can supply goods and services in another Member State without a requirement to register for VAT thus alleviating their VAT compliance obligations.
In general, to be eligible to use the SME scheme in another Member State, an Irish business must:
- be established for VAT purposes in Ireland only,
- not exceed the domestic turnover threshold(s) of the other Member State(s) where supplies are made,
- not exceed the Union turnover threshold of €100,000,
- be registered in Ireland to use the scheme, and
- file quarterly reports once registered.
An Irish business wishing to register to use the SME scheme in other Member States must make a formal application to Revenue in Ireland.
Revenue has a dedicated webpage Overview of the EU VAT SME Scheme which provides further details on the scheme.
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