Revenue has published guidelines for the Cross Border Operation of the EU VAT SME scheme (VSME). The VSME alleviates the compliance obligations of small businesses by allowing the supply of goods and services to EU customers without incurring an obligation to charge VAT.
An Irish established business can avail of the scheme provided the business’ annual turnover within the European Union does not exceed €100,000 in the current and previous years. The small business must also not exceed the annual turnover threshold, in the current and previous calendar years, of the Member State(s) in which they want to utilise the scheme. Participation in the scheme is optional.
The scheme allows qualifying small enterprises to avail of the VAT registration thresholds in all Member States where they supply goods and services, thus avoiding the requirement to register for VAT in those Member States. However, there is no right to deduct input VAT incurred on the purchases of goods and services linked to supplies made under the scheme.
Additional details are included in our earlier article which you can read here.
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