European Finance Ministers unanimously agreed on Friday 8 November on the proposal for a Directive to simplify value added tax (VAT) for SMEs.
As anticipated by EUROPE (see EUROPE 12361/4), supplies of goods and services by small businesses with a national annual turnover not exceeding 85,000 euros may be exempt from VAT. Under certain conditions, Member States which allow such an exemption to companies established in their territory will be required to apply such exemption to supplies made in their territory by taxable persons established elsewhere in the EU whose annual turnover from activities in the Union does not exceed 100,000 euros.
During the debate, the Netherlands welcomed the latest provisions introduced, in particular the one that will allow Member States that so wish to terminate the exemption, if the national threshold set is exceeded. Several countries, including Ireland and France, supported this provision in Annex II of the legislative text.
Hungary and Spain, on the other hand, considered that the proposal on the table would not reduce the administrative burden. Like the United Kingdom, which was not convinced by the new thresholds, the two countries did not block the adoption of the text on the table.
The EU Council's Legal Service advised the Finnish Presidency to consult the European Parliament again, due to the substantial changes made to the legislative text after Parliament delivered its opinion in September 2018.
See the agreed text: https://bit.ly/2qC6pby (Original version in French by Mathieu Bion)