The VAT Directive accommodates special VAT schemes for specific categories of taxpayers such as small businesses to reduce paperwork.
| Scheme | In every EU country? | Who or what is covered? | Nature of scheme |
| Small enterprises | No | Small businesses | Simplified charging and collection of VAT |
| Small enterprises | No | All small businesses with turnover below a set amount | Exemption or graduated relief |
| Flat-rate farmers | No | Agricultural, forestry & fisheries businesses | Exemption plus flat-rate fee to offset input VAT |
| Travel agents | Yes | Travel agents & other tour operators | Output VAT on profit margin |
| Second-hand goods, works of art, etc. | Yes | Taxable dealers in these goods | Output VAT on profit margin |
| Public auctions | No | Auctioneers | Output VAT on profit margin |
| Investment gold | Yes | Transactions in investment gold | Exemption with option to tax |
| Telecom, broadcasting and electronic services | Yes | Supplies by non-established businesses | One Stop Shop for registration and payment of output VAT |
VAT One Stop Shop
As of 1 July 2021, new VAT rules on cross-border business-to-consumer (B2C) e-commerce are in place. The aim is to reduce barriers to cross-border online sales and address the challenges of distance sales and importing low-value consignments.
VAT scheme for small businesses
As from 1 January 2025, EU small businesses established in another Member State than where VAT is due can use the special regime for small businesses (SME scheme) to VAT exempt their supplies (cross-border), in the same way that small businesses established in that Member State already can for domestic transactions. To be eligible, neither the Union annual threshold of EUR 100 000 nor the national annual threshold set by the Member State(s) where an EU small business wants to apply the exemption should be exceeded. Under the SME scheme, the compliance is made simpler with a single registration, single quarterly reports and simplified invoices.
Other special schemes
In certain circumstances, special schemes are in place to simplify VAT implementation, reduce administrative burdens or reduce VAT compliance costs.
| Scheme | For whom? | Optional/obligatory | Scope |
|---|---|---|---|
Exemption (Articles 282 to 292d, VAT Directive) | Cross-border SME scheme: EU small businesses with a Union annual turnover not exceeding EUR 100 000 and not exceeding the national annual threshold of Member States where they want to apply the VAT exemption.
Domestic SME scheme: small businesses with an annual turnover not exceeding the national annual threshold set by the Member State of establishment. | For EU Member States: optional. Once a Member State opts for the SME scheme at a domestic level, it must open the scheme to EU small enterprises (cross-border SME scheme).
For small businesses: optional | No need to charge VAT on supplies of goods and services.
Simplified compliance: Single registration Single quarterly reports Simplified invoices |
Simplified procedure to charge and collect VAT (Article 281, VAT Directive) | Small businesses as defined by EU Member States | For EU Member States: optional
For small businesses: as defined by EU Member States | Simplified VAT obligations – scope defined by EU Member States |
(Articles 295-305, VAT Directive)
| For whom? | Optional/obligatory | Scope |
| Farmers engaged in agricultural, forestry or fishing activities (Annex VII, VAT Directive) and further defined by EU country | Optional for EU countries and businesses | Eligible farmers do not charge VAT and cannot recover input VAT. Instead, they charge a standard ‘flat-rate compensation’.
Only applies for businesses in the same EU country or non-taxable legal entities in other EU countries, not for other flat-rate farmers or private customers.
More information on the Taxes in Europe Database (TEDB). |
(Articles 306-310, VAT Directive)
| For whom? | Optional/obligatory | Scope |
Travel agents that use goods and services supplied by other businesses, but not those acting solely as intermediaries.
Only applies to travel and accommodation in the EU, not travels outside the EU. | Obligatory for EU countries and businesses | VAT is applied only to profits. No right to deduct VAT. |
(Articles 311-325 and 342-343, VAT Directive)
| For whom? | Optional/obligatory | Scope |
Businesses dealing with:
| For EU countries: obligatory. For businesses: optional. | Businesses that opt for this scheme pay VAT on their profit margin, but do not charge or deduct VAT.
If VAT was paid to purchase or import the goods, the business can choose not to apply this scheme. Standard VAT arrangements then apply.
Goods supplied outside the EU are exempt from VAT. |
(Articles 333-341, VAT Directive)
| For whom? | Optional/obligatory | Scope |
| Organisers of public auctions of second-hand goods, works of art, collectors’ items or antiques who act under a contract and for a commission, on behalf of certain other people/bodies. | Optional for EU countries and businesses | The auctioneer issues a VAT-free invoice to the purchaser. The taxable amount.. |
(Articles 344-356, VAT Directive)
This scheme covers:
- Bars or wafers
- weighing amounts accepted by the bullion markets
- purity at least 99.5%
- may or may not be represented by securities
- Coins
- purity at least 90%
- minted after 1800
- which are or have been legal tender in their country of origin
- normally sold at a price not more than 80% above the open market value of the gold in the coins
- not regarded as being sold for numismatic interest (coin collectors).
- In December every year, the EU Commission publishes a list of all coins in the EU that are eligible for this scheme in the following year.
- Search on EUR-Lex for: List of gold coins meeting the criteria established in Article 344(1), point (2) of Council Directive 2006/112/EC (Special scheme for investment gold)
| Scheme | For whom? | Optional/obligatory | Scope |
| Type I - exemption | Businesses that produce investment gold or transform gold into investment gold | For EU countries: obligatory. For businesses: optional. | Supply, intra-EU acquisition, importation and futures and forward transactions leading to a transfer of ownership or claims are normally exempt from VAT without the right of deduction, as are the services of any intermediaries involved in the supply. Businesses can waive this exemption for supplies of investment gold to other businesses (i.e. to choose to have these supplies taxed). In some EU countries, they may also be able to opt for taxation of gold bars or wafers they supply for industrial purposes (if they take this option, any intermediaries involved must also be allowed to). |
| Type II – transactions in gold bullion market | Businesses that are members of a regulated gold bullion market | Optional for EU countries and businesses | Specific transactions involving investment gold, with customers both within and outside the market are exempt. In some EU countries, these transactions may be taxed. But any supplies to a customer in another EU country or exports are not subject to VAT. |
| Type III – deduction for traders in investment gold | Traders in investment gold and businesses that produce investment gold or transform gold into investment gold | For EU countries: obligatory. For businesses: optional. | Applies to transactions that remain exempt under the general rule. Where traders sell on exempt investment gold, they must nevertheless be allowed to deduct input VAT due or paid on:
In addition, businesses that produce investment gold or transform gold into investment gold must be allowed to deduct the VAT due or paid by them for the supply, intra-EU acquisition or import of goods/services linked to that production /transformation, as if the subsequent exempt supply of the gold were in fact taxed. |