The European Commission has published its Infringement Package for January 2025 – addressing VAT-related issues affecting multiple countries – on 31 January 2025.

The Commission is sending a letter of formal notice to those Member States who have failed to notify national measures transposing directives, whose transposition deadline expired recently. In this case, there are 27 Member States who have not yet notified full transposition measures for eleven EU directives in the field of environment, financial stability, financial services and capital markets union, justice, taxation, mobility and transport.

Member States concerned now have two months to reply to the letters of formal notice and complete their transposition, or the Commission may decide to issue a reasoned opinion.

Commission calls on Member States to fully transpose the Directive on the VAT scheme for small enterprises

The European Commission decided to open infringement procedures by sending letters of formal notice to eight Member States (Bulgaria, Ireland, Greece, Spain, Cyprus, Lithuania, Portugal and Romania) for failing to transpose the Directive on the special VAT scheme for small enterprises (Directive 2020/285).

Member States had to transpose this Directive into national law by 31 December 2024. The Directive on the special VAT scheme allows small enterprises to sell goods and services without charging VAT and alleviates their VAT compliance obligations. Moreover, small enterprises established in another Member State than where VAT is due may exempt their supplies from VAT in the same way as domestically established small enterprises can in their respective Member State.

Commission calls on Member States to fully transpose the Directive on VAT rates

The European Commission decided to open infringement procedures by sending a letter of formal notice to seven Member States (Belgium, Bulgaria, Greece, Spain, Lithuania, Portugal and Romania) for failing to communicate the full transposition of the Directive on rates of VAT (Directive 2022/542).

Member States had to communicate on the full transposition of this Directive into national law by 31 December 2024.

The Directive on rates of VAT allows for a wider use by Member States of reduced rates, including the use of zero rates for essential products such as food, pharmaceuticals and products intended for medical use. Furthermore, country-specific VAT rates called derogations were opened to all Member States, thus ensuring equal treatment across the Union.