BUSINESS

Limit for VAT exemption of enterprises is set to go up

TAGS: Taxation, Business

The Finance Ministry will table a regulation in Parliament in the next few days increasing the limit for the exemption of companies from value-added tax payments depending on their annual takings.

Sources say that the current limit of 10,000 euros will rise to 25,000 euros. The businesses that choose to be exempt from VAT will not charge the tax on the delivery of goods or the supply of any services.

If annual takings may rise above the limit set, the exemption will not apply. The limit concerns total gross revenues within one financial year from a company’s entire range of activities that are also used for the calculation of income tax.

New enterprises will have normal VAT status in their first year and will only be able to choose whether to be exempt from their second year, and provided they meet the gross revenues criterion.

The planned regulation is expected to reduce administrative costs both for the tax authorities and small enterprises. It will also assist smaller companies in terms of competitiveness when compared with larger ones, concerning deliveries of goods and supply of services.

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