Governing body of the member states’ VAT system, the EU VAT Directive has offered the scope for countries to increase the threshold of VAT registration for resident companies to up to Euro 100,000. This offers the opportunity for countries to shrink the administrative burden on smaller businesses by ensuring that they do not need to incur extra compliance costs associated with the VAT. This provision is apprehended within Article 285 of the VAT Directive 2006/112/EC.
The Italian VAT authorities applied in April to increase their current VAT registration threshold to Euro 65,000 from Euro 30,000 starting from year 2014. The European Union has now approved with an indication that Italy may increase this further in subsequent years to provide for inflation.
