EU Commissioner has rejected excluding digital micro businesses from new VAT rules

The European Commissioner for Economic and Financial Affairs, Taxation and Customs, Pierre Moscovici, has ruled against introducing a minimum threshold for VAT paid on e-services, broadcasting and telecommunications. UK MEPs wanted an EU-wide minimum turnover limit that was in accordance with the UK law. This meant that companies that turnover less than £81,000 do not need to register for VAT. This was due to the new VAT Mini One Stop Shop as micro businesses are having difficulty with the new red tape involved.

Moscovici said, “the idea of having a minimum threshold was discussed in council at the time these rules were negotiated but this was firmly rejected by member states. Microbusinesses can still enjoy the benefit of their VAT exemption threshold for domestic supplies and this is the case in the UK, where businesses with turnover below the threshold of £81,000 can still enjoy the VAT exemption benefit for their domestic supplies.”