Considerations on COM(2018)652 - Authorisation of the United Kingdom to derogate from Articles 16 and 168 of the VAT Directive

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dossier COM(2018)652 - Authorisation of the United Kingdom to derogate from Articles 16 and 168 of the VAT Directive.
document COM(2018)652 EN
date December  4, 2018
 
table>(1)Council Decision 2006/659/EC (2) authorised the United Kingdom to apply a special simplification measure (‘the measure’) in order to determine on a flat-rate basis the proportion of non-deductible value added tax (VAT) relating to expenditure on fuel in business cars not exclusively used for business purposes. The system, which is optional for taxable persons, is based on the level of carbon dioxide (CO2) emissions from the car, as there is a proportional correlation between emissions and fuel consumption and therefore with expenditure on fuel.
(2)Decision 2006/659/EC was replaced by Council Implementing Decision (EU) 2015/2109 (3), which will expire on 31 December 2018.

(3)By letter registered with the Commission on 27 April 2018, the United Kingdom requested authorisation to continue to apply the measure until 31 December 2020.

(4)The Commission informed the other Member States of the request made by the United Kingdom in a letter dated 11 June 2018. By letter dated 12 June 2018, the Commission notified the United Kingdom that it had all the information necessary to consider the request.

(5)As required by Article 4 of Implementing Decision (EU) 2015/2109, the United Kingdom submitted a report on the functioning of the special measure. According to the United Kingdom, the arrangement has led to a simplification, both for taxable persons and for the tax administration, of the procedure for collecting VAT in relation to expenditure on fuel for business cars.

(6)It is therefore appropriate that the United Kingdom be authorised to apply the measure until 31 December 2020.

(7)The derogating measure will have no adverse impact on the Union's own resources accruing from VAT,