The Council of Ministers, with legislative decree approved on 29 October 2024, approved the VAT exemption regime for small businesses, implementing Directive 2020/285/EU.
The new legislation requires Member States to extend the VAT exemption regime to small businesses established in other EU countries, provided that they comply with the turnover limit set by the reference State and do not exceed a total turnover of 100,000 euros in the entire EU area.
Let's look at the main points of the new rules, which will be applied starting from January 1, 2025.
Features of the new VAT exemption regime
Italy has adopted a cross-border VAT exemption model divided into two regimes:
Internal regime for small businesses established in other EU countries operating in Italy
External regime for Italian companies operating in other EU Member States
For activities in Italy, natural persons established in other EU countries will be able to access the exemption regime if they have achieved an annual turnover not exceeding 85,000 euros in Italy and a maximum of 100,000 euros overall in the EU.
For Italian companies operating in other EU countries, access to the exemption regime will be subject to compliance with the turnover limit of the reference country, as well as the overall EU limit of 100,000 euros.
Identification with "EX" number
Companies that will benefit from the exemption regime will be identified at Community level by a unique number with the suffix “EX”, assigned by the State of establishment. This number will allow easier access to the exemption regime in the various EU countries.
The identifier “EX” will be added by the Italian tax authorities to the VAT number of national companies operating abroad and will also be valid for foreign companies operating in Italy.
How can we help you?
Our Law Firm is available to offer assistance and advice on all the innovations and opportunities introduced by the new VAT exemption regime. For further information and to request our support, you can contact our Of Counsel, Avv. Giorgio Beretta , at the email address: giorgio.beretta@rclex.it
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