Compliance Alert – New cross-border VAT exemption regime for small businesses

On December 30, 2024, the Italian Revenue Agency (Agenzia delle Entrate) published a new Provision, implementing a cross-border VAT exemption regime harmonizing with the EU’s cross-border SME scheme. The aim is to facilitate small businesses by reducing administrative burdens, along with supporting growth and development in cross-border trade.

What are the criteria for small businesses in Italy to apply for this regime?

The annual turnover of the established business for the present year, until the application date, and of the preceding year:

• Must be below 100,000 EUR in the EU territory;
• Must not exceed the national annual threshold (currently 85,000 EUR in Italy) or sectoral threshold in each Member State where it wants to make use of the VAT exemption; and
• The business has not already applied in another Member State.

How do I apply?

The notification should be made by using the “Direct registration for the PI regime” (It: Registrazione diretta al regime PI) accessible on the business’ private account (It: Area riservata) on the Revenue Agency’s website.

Apart from company-specific data, the notification requires information such as a declaration of not being registered under this regime in another EU Member State and exemption State(s) in which the business intends to benefit from the regime.

Once the Revenue Agency has processed the notification the business will be assigned a so-called EX-identification number. From this date the business can start applying the exemption regime.

More details are listed on the Revenue Agency’s website (in Italian).