The SME scheme allows a business established in Belgium to benefit from a VAT exemption in another Member State. Exemption for those transactions comes with the inability to deduct VAT on purchases used for them: the expected benefit must therefore be assessed taking account of input tax borne.
Annual turnover in the Union must not exceed 100,000 euros in the current calendar year and the preceding year. The national or sectoral ceiling in each chosen State must also be met in the current and preceding year, or the two preceding years if that State requires it. Excluded transactions remain outside the scheme.
Monitoring activity must therefore allow two simultaneous views: by State and across the Union. A business may remain small at European level while exceeding a national market's ceiling. Economically, comparing the VAT that would no longer be charged with the VAT that would become non-deductible helps assess the value of the choice. This comparison must take account of purchases actually allocated to exempt transactions and does not remove the need to monitor thresholds after entering the scheme.
The business must notify its request in Belgium, await allocation of the EX number and confirmation of its use in the chosen States, then report its turnover quarterly. Exceeding a national ceiling may end the exemption in that State without excluding the business everywhere, provided the European ceiling is still met; any national tolerances must also be checked.