Croatia Requests Derogation for Small Business Exemption Threshold

June 12, 2017

Kaitlyn Smethurst

Author

Sovos

This blog was last updated on June 27, 2021

On June 8th, the Republic of Croatia submitted a final proposal to the European Commission, requesting a derogation from the EU VAT Directive regarding threshold amounts for tax application on small enterprises. This derogation would allow Croatia to exempt from VAT taxable persons whose annual turnover is EUR 45 000, effective January 1, 2018. Under Article 287 of the EU VAT Directive, the current threshold for exemption is EUR 35 000. Croatia’s request is not without precedent, as the EU Commission has granted similar variances from the threshold for Luxembourg, Belgium, Poland, Lithuania, Latvia, Slovenia, Italy, and Romania. The EU Commission has yet to issue a decision on Croatia’s proposal; a full copy of the submitted document is available here.

Kaitlyn Smethurst

Katie Smethurst is a Regulatory Counsel at Sovos. Within Sovos' Regulatory Analysis function, Katie focuses on global sales tax and VAT issues, supporting both the tax determination and reporting engines. Katie received her B.A. in International Relations and Spanish from Roger Williams University and her J.D. from Suffolk University Law School. She is a member of the Massachusetts and New Hampshire Bars.

Stay up to date with the latest tax and compliance updates that may impact your business.