Greece’s Implementation of Directive 2020/285

June 2, 2025

EU Directive 2020/285 introduces significant reforms to the VAT regime for small businesses across the European Union. Its goal is to reduce administrative burdens, support SMEs, and enhance competitiveness in the EU Single Market.

As of January 1, 2025, Greece has officially transposed the directive into national law, and the Independent Authority for Public Revenue (AADE) is now responsible for enforcing its provisions. Businesses must immediately familiarize themselves with the new thresholds, reporting obligations, and strategic implications of the special VAT exemption scheme.

This article outlines the directive’s key features, obligations for both authorities and businesses, and important risk management considerations.

Background and EU Rationale

Directive 2020/285 amends the VAT Directive (2006/112/EC) with the aim of modernizing and harmonizing the special VAT regime for small enterprises. The previous framework was fragmented and favored only domestically established businesses. Key improvements include:

• Allowing VAT exemptions for non-established businesses with EU-wide turnover below €100,000.

• Updating national thresholds up to €85,000, with flexibility for sector-specific adjustments.

• Simplifying procedures by removing the progressive VAT reduction and introducing centralized cross-border registration mechanisms.

• Improving transparency by requiring public access to VAT exemption rules through official EU platforms.

  
  

Business Obligations Under the New Special Scheme

To participate in the special VAT regime in Greece or any other EU country, small businesses must:

• Ensure their annual turnover stays below €85,000 (national threshold) and €100,000 EU-wide (for non-established operators).

• Register through their home tax authority using their domestic tax ID—no need for foreign VAT registration under this scheme.

• Submit periodic declarations, especially via the VIES system, if operating cross-border.

• Monitor turnover carefully to avoid exceeding the exemption limits.

• Choose between the special exemption scheme and the standard VAT regime based on their business strategy and cost structure.

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Risks and Strategic Considerations for Businesses

While the new regime brings simplification, it also introduces new risks that require proactive planning:

• Exceeding turnover limits can lead to loss of exemption status and retroactive VAT liability.

• Incorrect or late declarations may result in penalties—automation and internal training are key.

• Businesses under the exemption cannot deduct input VAT, potentially increasing operational costs.

• Cross-border activities raise the complexity of compliance, especially with varying national thresholds.

• Unexpected transitions to the standard regime can be administratively burdensome if unplanned.

• Inadequate documentation or misinterpretation of the rules may prompt audits and fines.

  
  

To maximize benefits, businesses must align their tax strategy with their growth plans and understand when to opt into or out of the special regime.

The Role of AADE and Public Authorities

Now that Directive 2020/285 is in effect in Greece, AADE is responsible for:

• Publishing clear implementation guidelines for Greek SMEs and freelancers.

• Deploying digital infrastructure to support real-time registration, reporting, and compliance tracking.

• Coordinating with EU systems (e.g., VIES) for cross-border transactions under the special scheme.

• Ensuring transparency and accessibility for public and professional stakeholders.

  
  

Timely action by authorities will be critical to reducing confusion and ensuring that businesses benefit from the directive’s intended simplifications.

Tax Experts: Helping You Navigate the New VAT Landscape

At Tax Experts, we’re ready to guide you through this major regulatory shift. Whether you’re a Greek entrepreneur or an EU-based business expanding into Greece, our services are tailored to the unique challenges of the new VAT regime:

• Eligibility assessments: Determine whether the special VAT scheme fits your business.

• Cross-border VAT planning: Optimize compliance and cash flow across multiple EU jurisdictions.

• Risk mitigation and compliance: From audit preparation to ongoing documentation reviews.

• AADE support: Real-time guidance on Greek implementation procedures and obligations.

  
  

Directive 2020/285 marks a major shift in how small businesses operate within the EU VAT framework. While it opens doors for simplified compliance and reduced costs, it also brings new responsibilities. With the Greek implementation now in force, early adaptation and expert guidance are key to unlocking the benefits and avoiding costly missteps.

Whether you’re a startup, freelancer, or growing SME, we’re here to help you stay compliant, minimize risks, and thrive under the new VAT regime.