Germany and Croatia should benefit from derogations from Directive 2006/112/EC on the common system of value added tax (VAT), according to two proposals for implementing decisions put forward by the European Commission on Tuesday 10 September.
In February 2024, in a letter to the European Commission, Germany requested authorisation to extend the application of a measure derogating from articles 168 and 168a of the VAT Directive. The aim is to exclude from the right to deduct VAT charged on goods and services that the taxable person uses more than 90% for their private needs or those of their staff or, more generally, for purposes unrelated to their business or for non-economic activities. In its current application, Germany informed the Commission that the application of the special measure had proved very effective and greatly simplified the collection of VAT. It also helps to prevent tax evasion and avoidance.
In April 2024, Croatia sent a similar letter making the same request, and also asking for an extension of the derogation from Article 26. It wishes to continue to limit the right to deduct input tax on the purchase and leasing of passenger cars, including the purchase of all related goods and services. It explained that an average of 50% of a company’s private cars continue to be used for private purposes.
The EU Council still has to approve these derogations.
Read the proposal regarding Germany: https://aeur.eu/f/dee
Read that for Croatia: https://aeur.eu/f/deg (Original version in French by Anne Damiani)