Small Businesses New VAT Scheme in the European Union

Explain the differences between the current system that applies to small businesses and the new simplification rules that will apply from 1 January 2025, to help reduce VAT compliance costs for these businesses. With this new system, the small businesses special scheme is expanded to provide a more level playing field and to fit the future VAT system based on the taxation-at-destination principle. In particular, these new rules of the special scheme will have two layers of application: (i) domestic and (ii) cross-border within the territory of the European Union. Both layers of application are independent from each other, which means that a taxable person fulfilling the conditions to apply the domestic scheme could choose to apply the special scheme in its Member State of establishment only, to apply it in some other Member States than in the Member State of establishment or to apply it in both the Member State of establishment and in some other Member States. An important consequence of this last option is reflected in the possibility to deduct the input VAT. These new rules also have an effect on the application of the exemption to small businesses that do not exceed a certain threshold (annual turnover).

Topics Covered

  • Block 1: Current special scheme for small businesses
  • Block 2: New rules in force from 1 January 2025 due to new scheme for small businesses
  • Block 3: Examples of the new schemes: (i) domestic and (ii) cross-border levels.

Learning Objectives

After watching this webinar, you will be able to: 

  • Learn about the provisions of the VAT Directive applicable to the current special scheme for small businesses
  • Identify the issues and intricacies of the new rules that will apply from 1 January 2025 to small businesses that carry out cross-border transactions for which VAT is due in a Member State other than that in which they are established;
  • Understand the complexities of the new scheme and its advantages or disadvantages; and
  • Pinpoint the challenges and difficulties that the implementation of the new special scheme may present for different parties, specially for small businesses.

Instructors

Fernando Matesanz, Director of Spanish VAT Services Asesores; member of the EU Commission’s VAT Expert Group

Fabiola Annacondia, VAT Senior Principal IBFD; member of the EU Commission’s VAT Expert Group

Laura Alarcón Díaz, VAT Managing Principal IBFD (Facilitator)

Field of study

Taxes

Who should participate

The webinar is suitable for small businesses, in-house tax professionals, tax lawyers and advisers, managers of businesses, government officials and academics.

Course level and prerequisites

This is an intermediate-level webinar. Participants in this webinar are expected to be familiar with the EU VAT system and the latest amendments to the VAT Directive.

Read the Council Directive (EU) 2020/285 of 18 February 2020 that amends certain provisions of the VAT Directive regarding the special scheme for small businesses by which a new system was introduced.

Interactive webinar – “Group Internet Based” (live webinar only)

During live webinars, it is possible to interact with the presenters via a chat message function. Please note that questions are answered based on relevance, order of receipt and available time. Additionally, participants in the live webinar are invited to answer poll questions. Participants will also have access to the on-demand version for a further 12 months from the live date.

Date of live broadcast: 12 December 2024

On-demand webinar

On-demand webinars are intended for individual self-study only. Unlike live webinars, they are not open to interactive participation nor do they offer the assistance of a real-time instructor. Access to on-demand webinars is granted for a period of 12 months.

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webinars or to on-demand webinars as well. 

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Webinar registration details

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