For SMEs operating across borders, EU regulatory initiatives such as the SME scheme (the special VAT regime for small enterprises) and ViDA (VAT in the Digital Age) can provide genuine relief if they help reduce administrative barriers arising from differences between Member States.

Based on an interview with Ágnes Czékmánné Kelecsény, Chair of the Nógrád County organisation of the National Association of Entrepreneurs and Employers (VOSZ), differences in taxation, invoicing and documentation practices remain a challenge for businesses operating in border regions. In the Hungarian-Slovak border region, differences in VAT rules and VAT-exemption thresholds influence the operational decisions of micro and small enterprises.

The SME scheme provides small enterprises with a simpler and more predictable framework for handling VAT, making it easier for them to apply VAT exemption when engaging in cross-border activities. Digital developments supported by ViDA, together with national solutions such as Hungary’s Online Invoice system and e-receipts, can help simplify data-reporting processes and improve interoperability between tax administration systems. Digitalisation offers genuine relief to SMEs in border regions only if it not only supports the technical implementation of data reporting but also reduces the burden of adapting to differences between Member States’ systems in terms of technical requirements, data content and documentation.

VOSZ aims to support the harmonisation process by collecting the practical experiences and problems encountered by SMEs in border regions and channelling them to policymakers and tax authorities. The organisation can also play an important role in ensuring that businesses receive appropriate information and that the introduction of new rules and digital systems genuinely helps remove administrative barriers to cross-border operations.