On Wednesday 30 June, the Member States’ ambassadors to the EU (Coreper) decided to limit the Commission’s proposal to exempt from VAT the goods and services that the EU makes available to Member States and citizens in times of crisis to the Covid-19 crisis (see EUROPE 12696/8).
Faced with Member States’ concerns about the scope of the proposal, which was considered too broad, and the lack of an impact assessment, the Portuguese Presidency of the EU Council had proposed this temporary solution in order to achieve a rapid adoption of the Directive and to leave the decision on a permanent VAT exemption linked to the response to future crises until a later date (see EUROPE 12736/18).
This proposal was the subject of a consensus at the Ecofin Council meeting on 18 June (see EUROPE 12744/2), followed by an agreement after a silence procedure, which ended on 25 June.
The text provides for a retroactive application of the new VAT exemption to transactions carried out from 1 January 2021.
It should be noted that it also removes the Commission’s proposal to replace the traditionally used exemption certificate with an electronic certificate. Concerns had been raised about its scope, the IT solutions required and the timeframe for its implementation.
In a statement attached to the text, the European Commission regretted this limitation of the scope of the Directive to the current pandemic and stressed that without an “ambitious and future-proof solution”, the EU’s ability to react quickly in the interest of European citizens, should emergencies and crises similar to Covid-19 arise in the future, will be affected.
Read the text: https://bit.ly/363neOk (Original version in French by Marion Fontana)