The EU cross-border SME scheme: use a VAT exemption in other member states from 2025
Since January 2025, a small business can use a VAT exemption not just at home but in other EU countries too — if its total EU-wide turnover stays under €100,000 and it stays under each country's national threshold. One notification, one EX number, one quarterly report.
This article is general information, not tax advice. Regulations change — verify the current rules with the official sources below before acting.
Until recently, the small-business VAT exemption was a home-country perk: cross a border and you lost it. Since 1 January 2025 a new EU scheme changes that — and for a freelancer selling across Europe, it can mean staying VAT-free in more places than before.
What the scheme does
The cross-border SME scheme lets an EU-established small business apply a VAT exemption in other member states, not just its own. You don't charge VAT to customers in the countries you're exempt in, and you don't file full VAT returns there.
The two limits you must stay under
Two ceilings apply at once:
- EU-wide cap: €100,000. Your total annual turnover across all 27 member states must not exceed €100,000 in the current or previous calendar year. Breach it and you're excluded from the scheme everywhere.
- Each country's national threshold. In each member state where you want the exemption, your turnover there must also stay under that country's own small-business threshold — which EU law caps at a maximum of €85,000 (many countries set it lower).
How it works in practice
You make one prior notification in your country of establishment and receive a single "EX" identification number to use across your chosen countries; registration should take up to 35 working days. Compliance is one quarterly report covering your turnover in all member states, plus simplified invoicing.
A note on interaction: the SME scheme and the One-Stop-Shop can coexist (but not both in the same country at once), while the SME scheme and the import IOSS are mutually exclusive. Which route fits depends on whether your cross-border sales are mainly B2C digital (OSS territory) or small enough to sit under the exemptions (SME scheme) — worth a quick check before you register.
General information about the EU cross-border SME VAT scheme, current as of the review date above, and not tax advice. National thresholds vary — confirm the rules for each country with its tax authority or a qualified adviser.
Frequently asked questions
What is the EU cross-border SME VAT scheme?
A scheme in force since 1 January 2025 that lets an EU-established small business apply a VAT exemption in other member states, not only in its home country. Previously the small-business exemption was home-country only. You register once in your home country, receive an EX identification number, and use it across the countries you choose.
What are the limits?
Your total annual turnover across all 27 EU countries must stay at or under €100,000 in both the current and previous calendar year. Separately, in each country where you want the exemption, you must also stay under that country's national threshold (which EU law caps at a maximum of €85,000). Exceed the €100,000 EU cap and you lose the scheme everywhere.