Two Limits to Remember
Under Council Directive (EU) 2020/285, every EU small business claiming cross-border VAT exemption must satisfy two cumulative turnover limits simultaneously:
€100,000
Union Annual Threshold
Total turnover across all 27 EU member states combined in current & previous year
≤ €85,000
National / Sectoral Threshold
Ceiling set by destination member state (ranges from €0 to €85,000)
Cumulative Test: Exceeding either the €100,000 Union cap OR a destination state's national threshold disqualifies you from exemption in that scope.
Interactive EU Threshold Map (2025/2026)
Hover over any EU country to inspect its national VAT exemption threshold under the SME Scheme.
EU Domestic VAT Thresholds by Country (2025/2026)
Hover over a country to see its national VAT exemption threshold under Directive (EU) 2020/285
EU SME Scheme Active
Spain (€0 / Scheme Not Applied)
Hovered country
Non-EU
Important Exception: Spain (€0 Threshold): Spain has not implemented a domestic SME VAT exemption scheme. The threshold in Spain is €0 — all sales destined for Spain under domestic rules require standard VAT handling from €0 turnover.
What Counts Toward Annual Turnover? (Article 288)
Under Article 288 of the VAT Directive and Section 2.4 of the EC Explanatory Notes, annual turnover is calculated exclusive of VAT and follows strict inclusion/exclusion rules:
| Feature | Transaction Type | RecommendedTurnover Calculation Status |
|---|---|---|
| Taxed B2C & B2B Sales of Goods & Services | Standard domestic & cross-border sales | INCLUDED |
| Marketplace-Handled Sales (Etsy/Amazon) | Sales where marketplace collected VAT | INCLUDED (Gross sale value) |
| Exempt Exports & International Transport | Supplies dispatched outside the EU (Art 146) | INCLUDED |
| Exempt Intra-EU Supplies of Goods | B2B intra-EU supplies (Art 138) | INCLUDED |
| Business Stock Transfers to another EU MS | Transfer of stock (Art 17) at purchase/cost price | INCLUDED |
| Disposals of Capital Assets | Sale of used machinery, computers, business cars | EXCLUDED |
| Non-EU Stock Transfers (No supply) | Moving raw materials to a non-EU warehouse | EXCLUDED |
| Reverse-Charge Purchases & Input Services | Purchases of services (Art 196) / imports | EXCLUDED |
Threshold Exceedance & Transition Ceilings
1
Union Cap Exceeded (€100,000)
Immediate ExclusionImmediate exclusion across all cross-border Member States from the exact transaction that crossed €100,000. No tolerance or grace period permitted by EU law. Must file final report within 15 working days.
2
National Threshold Exceeded (e.g. 10% / 25% Ceiling)
Member States may grant a transitional period if national threshold is exceeded by ≤10% or ≤25% (up to €100,000 cap), allowing exemption until year-end. If no transition is set, exclusion is immediate.
3
Quarantine Period (1 to 2 Years)
Once excluded, a quarantine period of 1 to 2 calendar years applies before an enterprise can re-apply for cross-border exemption in that jurisdiction.
Official Sources & Legal References
- •EU VAT Directive 2006/112/EC — Article 284(1), Article 284(2)(a), and Article 288 (Calculation of Annual Turnover).
- •European Commission Explanatory Notes — Section 2.4 (Calculation of annual turnover) & Section 3.3.4 (Exclusion & Transitional Ceilings).
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