EU VAT SME scheme: using the exemption in other EU countries (€100,000 limit, EX number, quarterly report)

Last updated 20 Oct 2026 · European Union

Short answer. Since 1 January 2025, Council Directive (EU) 2020/285 lets a small business established in the EU use the VAT exemption for small enterprises in other Member States too. It must stay under that country's national threshold (no country may set it above €85,000), and its total EU-wide annual turnover must not exceed €100,000. You notify your own tax authority in advance, receive an identification number with the suffix 'EX', and report your turnover per country every quarter. Businesses outside the EU cannot use the scheme.

Two tests, both must pass

Test	Limit
National threshold of each country where you want the exemption	Set by that country, at most €85,000
Union annual turnover (all EU countries combined), previous and current calendar year	€100,000 or less

How it works

Send a prior notification to your Member State of establishment, listing the countries where you want the exemption.
Get your individual identification number with the EX suffix.
Invoice without VAT in those countries, with the exemption note the country requires.
File the quarterly report of turnover per Member State with your own tax authority, within one month after each quarter.

When it stops

If your Union turnover goes above €100,000 during the year, the cross-border exemption ends at once and you must tell your tax authority promptly. Normal VAT registration (or OSS where it applies) takes over.

SME scheme vs OSS

They are different. OSS (with its €10,000 EU distance-sales threshold) is a way to declare VAT you charge. The SME scheme means you charge no VAT. See our OSS €10,000 guide.

Common mistakes

Counting only domestic sales against the €100,000. The test is EU-wide turnover.
Missing the quarterly report. Late or missing reports can end the exemption.
Expecting to reclaim input VAT. Exempt small businesses cannot deduct input VAT on exempt supplies.
Non-EU businesses applying. The scheme is for businesses established in the EU.

Frequently asked questions

What is the EU VAT SME scheme cross-border limit?

Total annual turnover in the EU must not exceed €100,000, and turnover in each country must stay under that country's national threshold (maximum €85,000).

What is the EX number in EU VAT?

An individual identification number with the suffix 'EX' issued by your Member State of establishment when you notify that you will use the SME exemption in other Member States.

How often do SMEs report under the cross-border scheme?

Quarterly, to the Member State of establishment, within one month after the end of each quarter.

Can a non-EU business use the EU VAT SME scheme?

No. Only businesses established in the EU can use the exemption in other Member States.

Official sources

Not tax or legal advice. This is a free explainer of public rules; deadlines and rules can change by notification, so confirm on the official portal or with your CA before you file. Last checked 20 Oct 2026.

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