Implementing decision 2019/2138 - Amendment of Decision 2007/441/EC authorising Italy to derogate from Articles 26(1)(a) and 168 of the VAT Directive - Main contents

EN

Official Journal of the European Union

L 324/7

Article 168 of the Directive 2006/112/EC establishes a right for taxable persons to deduct value added tax (VAT) charged on supplies of goods or services that they use for the purposes of their taxed transactions. Point (a) of Article 26(1) of that Directive treats the use of business assets by taxable persons or their staff for private purposes or, more generally, for purposes other than those of their business as a supply of services for consideration.

Council Decision 2007/441/EC (2) authorises Italy to limit the right under Article 168 of Directive 2006/112/EC to deduct VAT to 40 % in the case of VAT charged on certain expenditure on certain motorised road vehicles not wholly used for business purposes. For vehicles subject to that 40 % limit, Italy is required to relieve taxable persons from having to treat their use for private purposes as a supply of services for consideration in accordance with point (a) of Article 26(1) of Directive 2006/112/EC. Decision 2007/441/EC, which has been extended several times, is due to expire on 31 December 2019.

By letter registered with the Commission on 12 April 2019, Italy requested authorisation to continue to apply the derogating measures authorised by Decision 2007/441/EC (‘the derogating measures’) for a further period until 31 December 2022.

By letter dated 13 May 2019, the Commission transmitted to the other Member States, pursuant to the second subparagraph of Article 395(2) of Directive 2006/112/EC, the request that had been made by Italy. By letter dated 14 May 2019, the Commission notified Italy that it had all the information it considers necessary for appraisal of the request.

Together with the request, Italy submitted a report to the Commission, in accordance with the second subparagraph of Article 6 of Decision 2007/441/EC, including a review of the percentage restriction applied on the right to deduct VAT. Based on the information currently available, Italy maintains that a rate of 40 % is still justified. Italy also maintains that suspending the requirement to account for VAT on the private use of a motor vehicle subject to that 40 % limit is still necessary to ensure that the measure is complete and consistent. According to Italy, this would prevent double taxation. Italy also maintains that those derogating measures are justified by the need to simplify the procedure for collecting VAT and to prevent tax evasion resulting from incorrect record-keeping and false tax declarations.

An extension of the derogating measures should be limited to the time needed to evaluate the effectiveness of the derogating measures and the appropriateness of the percentage. Italy should therefore be authorised to continue to apply the derogating measures until 31 December 2022.

A deadline should be set for requesting authorisation for any further extension of the derogating measures beyond 2022 which Italy may consider necessary. Moreover, pursuant to the second subparagraph of Article 6 of Decision 2007/441/EC, Italy should be required to submit a report together with any such extension...