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Starting from January 1, 2025, small and medium-sized enterprises (SMEs) in the European Union will have the opportunity to take advantage of new, simplified tax regulations. The introduction of the SME (Small and Medium Enterprises) procedure aims to simplify VAT rules and create a more business-friendly environment for companies operating across borders. This is an important change worth knowing about, so we will take a closer look at it in our tax blog.
What is the SME Procedure?
The SME procedure is an innovative approach that will allow SMEs, including businesses operating in Poland, to benefit from VAT exemptions available in other EU countries. As a result, a Polish entrepreneur who meets certain criteria will be able to, for example, take advantage of German or French VAT exemption regulations. Similarly, companies from other EU countries will be able to benefit from Polish tax exemption rules. This is a particularly important change that will impact the functioning of small businesses engaged in cross-border activities.
Benefits of the SME Procedure for Small Businesses
In our accounting and tax blog, we often emphasize the importance of favorable regulations for SMEs. The SME procedure introduces many benefits that can significantly improve the efficiency and competitiveness of businesses:
- Simplification of formalities – One of the main objectives of the SME procedure is to reduce the bureaucratic burden on companies. This will allow entrepreneurs to focus on developing their business rather than complex tax formalities.
- Cost reduction – VAT exemption in other EU countries will allow small businesses to lower the costs of running their operations. This is a significant advantage that can improve financial liquidity.
- Easier access to foreign markets – The SME procedure will facilitate the export of goods and services to other EU countries, opening up new opportunities for growth and expansion for small businesses.
Who Can Benefit from the SME Procedure?
According to the regulations, SMEs with an annual turnover not exceeding €100,000 across the entire European Union will be eligible to use the SME procedure. It is important that the member state where the entrepreneur wants to take advantage of the exemption has introduced the relevant regulations. The entrepreneur must also meet all the necessary conditions to obtain the exemption and submit the appropriate notification to the Chief Tax Office in Warsaw.
In our blog for entrepreneurs, we regularly publish accounting advice and HR and payroll tips to help better understand these types of regulations.
Additional Changes from 2025
The SME procedure is not the only change that will take effect in 2025. Another significant amendment will be the change regarding the VAT exemption limit, i.e., the exemption based on turnover. Under the new regulations, intra-community supplies of goods (ICGs) will be included in the turnover limit for VAT exemption.
These types of changes may affect many businesses, which is why we regularly publish accounting updates and inform about all legislative changes on our accounting blog.
Why is it Worth Following Changes in the Regulations?
Trends in accounting and HR are constantly evolving, and up-to-date information on new regulations can help entrepreneurs avoid mistakes and better adapt to the dynamic legal environment. Regularly following accounting blogs and articles for businesses can bring tangible benefits.
FPD Accounting Office offers professional assistance in understanding and implementing new tax regulations. Our team of specialists provides support in accounting, HR, and payroll tailored to current regulations and the needs of small and medium-sized businesses. We encourage you to contact us and follow our accounting blog to stay up to date with the latest tax law changes.
Need more information?
Contact us!
Our accounting office, FPD, offers comprehensive accounting services and tax advisory tailored to your company’s needs. We have extensive experience in servicing both small, one-person businesses and larger enterprises. Our offer also includes top-level payroll and HR services. Regardless of the size of your company, our accountant will provide full support in bookkeeping and tax optimization. If you are looking for a trusted partner for bookkeeping in Kielce or online, our tax advisory office is at your disposal.
Trust our experience – our specialists in accounting, tax advisory, and HR services in Kielce are ready to help your business grow. We also offer accounting services for sole proprietorships, guaranteeing full service and professionalism.
