Implementing decision 2018/1994 - Authorisation of Croatia to derogate from point (a) of Article 26(1) and Article 168 of the VAT Directive - Main contents
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official title
Council Implementing Decision (EU) 2018/1994 of 11 December 2018 authorising Croatia to introduce a special measure derogating from point (a) of Article 26(1) and Article 168 of Directive 2006/112/EC on the common system of value added tax| Legal instrument | implementing decision |
|---|---|
| Number legal act | Implementing decision 2018/1994 |
| Original proposal | COM(2018)726  |
| CELEX number i | 32018D1994 |
| Document | 11-12-2018; Date of adoption |
|---|---|
| Publication in Official Journal | 17-12-2018; OJ L 320 p. 35-37 |
| Effect | 13-12-2018; Takes effect Date notif. See Art 6 01-01-2019; Application See Art 6 |
| Deadline | 31-03-2024; See Art 6 |
| End of validity | 31-12-2024; Ext. valid. by 32021D1997 |
| Notification | 13-12-2018 |
17.12.2018 |
EN |
Official Journal of the European Union |
L 320/35 |
COUNCIL IMPLEMENTING DECISION (EU) 2018/1994
of 11 December 2018
authorising Croatia to introduce a special measure derogating from point (a) of Article 26(1) and Article 168 of Directive 2006/112/EC on the common system of value added tax
THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty on the Functioning of the European Union,
Having regard to Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax (1), and in particular Article 395(1) thereof,
Having regard to the proposal from the European Commission,
Whereas:
(1) |
Article 168 of Directive 2006/112/EC establishes a taxable person's right to deduct value added tax (VAT) charged on supplies of goods and services received by that person for the use of that person's taxed transactions. Point (a) of Article 26(1) of that Directive contains a requirement to account for VAT when a business asset is put to use for private purposes of the taxable person or his staff or, more generally, for purposes other than those of his business. |
(2) |
By letter registered with the Commission on 22 December 2016, Croatia requested authorisation to apply a special measure derogating from the provisions of Directive 2006/112/EC governing the right to deduct input tax in relation to the purchase and leasing of aircrafts, vessels and personal cars, including the purchase of accessories for such goods as well as services supplied in relation thereto. After a number of discussions with the Commission, Croatia submitted a modified request limited to passenger cars, which was registered with the Commission on 17 September 2018. |
(3) |
The Commission transmitted the request of Croatia to other Member States by letter dated 21 September 2018. By letter dated 24 September 2018, the Commission notified Croatia that it had all the information it considered necessary for the appraisal of the request. |
(4) |
Taxable persons in Croatia cannot deduct VAT related to passenger cars used partially for business purposes. Croatia intends to modify its legislation and allow the deduction of input VAT relating to passenger cars. |
(5) |
Croatia claims that it is often difficult to accurately determine the extent to which cars are used for private or professional purposes and that, even where it is possible, this is often burdensome. Croatia therefore considers that it would be appropriate to apply the fixed percentage for the VAT deduction. Based on estimations, Croatia submits that the 50 % limit is appropriate. |
(6) |
According to Croatia, the application of the fixed percentage limit for the VAT deduction will not result in an additional administrative burden or additional costs for businesses or tax authorities, while the VAT deduction will be possible. The introduction of the VAT deduction will reduce the interest of taxpayers to procure goods and services related to passenger cars from persons performing a non-registered activity. |
(7) |
Croatia therefore requested authorisation, based on Article 395 of Directive 2006/112/EC, to apply a special measure derogating from point (a) of Article 26(1) and Article 168 of that Directive in order to limit the right of deduction on passenger cars to a set percentage (‘the special measure’). |
(8) |
The restriction on the right of deduction should apply to VAT paid on the purchase and lease of personal cars, including the purchase of all goods and services supplied in relation thereto. Passenger cars covered are considered to be motor vehicles intended for the transport of persons with a maximum of eight seats in addition to the driver's seat. |
(9) |
The special measure is designed to simplify the procedure for charging tax and... |
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