Italy’s request to the European Commission to raise the VAT exemption limit from EUR 65,000 to EUR 85,000 has been granted approval.

The European Commission has released a memorandum detailing Italy’s request for a derogation from Article 285 of the VAT Directive, which has now been approved. As a result, businesses with thresholds lower than EUR 85,000 will be exempted from VAT obligations retrospectively from January 1, 2023, until December 31, 2024. This exemption will also affect the requirement for businesses to use SDI. Over 63,000 smaller enterprises will benefit from this derogation.

This proposal aligns with the European Union’s objective of supporting small businesses and is consistent with existing policy provisions. The approval of the EUR 85,000 threshold is the highest in the EU, but it will help to relieve small companies in Italy from administration and compliance costs.