|Author (Corporate)||Council of the European Union|
|Series Title||Official Journal of the European Union|
On 21 October 2015 the European Commission presented a proposal for a Council Implementing Decision authorising Germany and Austria to continue to apply a measure derogating from Articles 168 and 168a of Directive 2006/112/EC on the common system of value added tax (the VAT Directive). The Council of the European Union adopted the Decision on 10 December.
Article 168 of Directive 2006/112/EC provides that a taxable person is entitled to deduct the VAT charged on purchases made for the purpose of his taxed transactions. Article 168a(1) of Directive 2006/112/EC provides that the VAT on expenditure related to immovable property forming part of the business assets of a taxable person and used both for business and non-business purposes shall be deductible only up to the proportion of the property's use for purposes of the taxable person's business.
The measure requested by Austria and Germany deviates from those principles and entirely excludes from the right of deduction the VAT borne on goods and services that are used by a taxable person for more than 90% for private or non-business purposes, including non-economic activities.
The derogating measure for Austria was initially granted by Decision 2004/866/EC for a period until 31 December 2009, extended by Decision 2009/1013/EU until 31 December 2012. The derogating measure for Germany was initially granted by Decision 2003/354/EC until 30 June 2004, extended by Decision 2004/817/EC until 31 December 2009 and by Decision 2009/791/EC until 31 December 2012. Decision 2012/705/EU extended both derogations until 31 December 2015.
The Commission understands that the special measure in question provides a facilitation to both tax administrations and businesses and the amount of tax due at the level of final consumption is only affected to a negligible extent. Therefore, it is proposed to extend the derogations until the end of 2018.
|Subject Tags||Value Added Tax [VAT]|
|Countries / Regions||Austria, Germany|
|International Organisations||European Union [EU]|