Nicosia, Cyprus. The Cyprus Chamber of Commerce and Industry (Keve) issued a circular this week outlining changes to the European Union VAT regime that have already taken effect.
Scope of the new VAT regime
The chamber said the new rules are intended to reduce administrative burdens and support the outward-looking activity of small businesses within the single market. Under the previous system, a small business could receive a VAT exemption only in the member state where it was established.
Cross-border VAT exemptions for eligible SMEs
Under the new regime, eligible small and medium-sized enterprises can benefit from VAT exemptions in other EU member states where they make sales, even without maintaining a permanent establishment in those countries.
Eligibility criteria and turnover thresholds
To join the scheme, a business must meet eligibility criteria related to financial performance. The chamber said total annual turnover within the European Union must not exceed 100,000 euros to qualify for the cross-border benefits. Domestic turnover must also not exceed the national exemption threshold of the member state where the exemption is requested, which can be up to 85,000 euros depending on the country.
Operational changes and administrative procedures
The reform introduces changes to daily business operations, including a single registration process. Applications for exemptions in other member states can be completed through a single procedure in the state where the company is established.
Reporting and invoicing
Keve said the changes reduce bureaucracy, including the option to submit a single quarterly declaration and issue simplified invoices.
How could the new EU VAT exemption rules affect your business’s cross-border sales in other member states?