Implementing decision 2021/1778 - Authorisation of Germany to derogate from Article 193 of the VAT Directive - Main contents
Please note
This page contains a limited version of this dossier in the EU Monitor.
Contents
official title
Council Implementing Decision (EU) 2021/1778 of 5 October 2021 authorising the Federal Republic of Germany to apply a special measure derogating from Article 193 of Directive 2006/112/EC on the common system of value added taxLegal instrument | implementing decision |
---|---|
Number legal act | Implementing decision 2021/1778 |
Regdoc number | ST(2021)11666 |
Original proposal | COM(2021)445 ![]() |
CELEX number i | 32021D1778 |
Document | 05-10-2021; Date of adoption |
---|---|
Publication in Official Journal | 11-10-2021; OJ L 360 p. 117-119 |
Effect | 07-10-2021; Takes effect Date notif. See Art 3 |
Deadline | 31-03-2024; See Art 2 |
End of validity | 31-12-2024; See Art. 2 |
Notification | 07-10-2021 |
11.10.2021 |
EN |
Official Journal of the European Union |
L 360/117 |
COUNCIL IMPLEMENTING DECISION (EU) 2021/1778
of 5 October 2021
authorising the Federal Republic of Germany to apply a special measure derogating from Article 193 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), first subparagraph, thereof,
Having regard to the proposal from the European Commission,
Whereas:
(1) |
Article 193 of Directive 2006/112/EC provides that the taxable person supplying the goods or services is, as a general rule, liable for the payment of value added tax (VAT) to the tax authorities. |
(2) |
By letter registered with the Commission on 15 March 2021, the Federal Republic of Germany (‘Germany’) submitted a request to the Commission for authorisation to apply a special measure derogating from Article 193 of Directive 2006/112/EC regarding persons liable for payment of VAT in the case of the transfer of emission allowances traded in a national trade system under the Fuel Emission Allowance Trading Act (Gesetz über einen nationalen Zertifikatehandel für Brennstoffemissionen – ‘BEHG’) of 12 December 2019 (‘the request’). |
(3) |
Pursuant to Article 395(2), second subparagraph, of Directive 2006/112/EC, by letters dated 7 April 2021, the Commission transmitted the request to the other Member States and, by letter dated 8 April 2021, it notified Germany that it had all the information necessary to consider the request. |
(4) |
Article 199a(1), points (a) and (b), of Directive 2006/112/EC allows Member States to designate taxable persons receiving transfers of allowances to emit greenhouse gases, as defined in Article 3 of Directive 2003/87/EC of the European Parliament and of the Council (2), and transfers of other units that can be used by operators for compliance with that Directive, as liable for payment of VAT (‘the reverse charge mechanism’). Those provisions were included in Directive 2006/112/EC by means of Council Directive 2010/23/EU (3) in order to contribute to fighting VAT fraud. The application of the reverse charge mechanism for trading in greenhouse gas emissions pursuant to Article 199a(1), points (a) and (b), of Directive 2006/112/EC is limited to allowances traded under the EU emission trading system (‘EU ETS’). |
(5) |
Under the BEHG, Germany has created a legal framework for a national emissions trading scheme, which covers emissions that do not fall within the EU ETS. Therefore, Articles 199a(1), points (a) and (b), of Directive 2006/112/EC do not provide a legal basis for applying the reverse charge mechanism to trading under the BEHG. |
(6) |
According to Germany, trading in allowances is highly vulnerable to VAT fraud. Trading in allowances for fuel emissions under the BEHG might be exploited for fraudulent purposes in the same way as under the EU ETS. Emission allowances can be exchanged quickly, repeatedly and easily. It is therefore very difficult for the authorities to detect such changes of ownership and to ensure that the proper amount of tax is levied. The purchaser of the allowances, being a taxable person with the right of deduction, could deduct the VAT incurred, without the supplier having paid the invoiced turnover tax to the tax authorities. In particular, the involvement in the supply chain of ‘missing traders’, who quickly disappear or do not have any assets, prevents the evaded tax from being collected by the authorities, negatively impacting the budget. To remedy the losses to public revenues, Germany has requested authorisation to derogate from Article 193 of Directive 2006/112/EC... |
More
This text has been adopted from EUR-Lex.
This dossier is compiled each night drawing from aforementioned sources through automated processes. We have invested a great deal in optimising the programming underlying these processes. However, we cannot guarantee the sources we draw our information from nor the resulting dossier are without fault.
This page is also available in a full version containing the legal context, de Europese rechtsgrond, other dossiers related to the dossier at hand and the related cases of the European Court of Justice.
The full version is available for registered users of the EU Monitor by ANP and PDC Informatie Architectuur.
The EU Monitor enables its users to keep track of the European process of lawmaking, focusing on the relevant dossiers. It automatically signals developments in your chosen topics of interest. Apologies to unregistered users, we can no longer add new users.This service will discontinue in the near future.