Proposal for a Decision authorising Czechia to apply the generalised reverse charge mechanism derogating from Article 193 of Directive 2006/112/EC

Author (Corporate)
Series Details COM (2019) 283
Publication Date 21/06/2019
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Proposal presented on 21 June 2019 by the European Commission authorising Czechia to apply a derogation from Article 193 of Directive 2006/112/EC on the common system of value added tax (the VAT Directive).

Further information:

Article 199c of Directive 2006/112/EC permits Member States, by way of derogation from Article 193 of that Directive and under certain strict conditions, to introduce a generalised reverse charge mechanism (GRCM) on non-cross-border supplies of goods and services, providing that the person liable for payment of VAT is the taxable person to whom all supplies of goods or services are made above a threshold of €17,500 per transaction.

In January and March 2019, Czechia requested authorisation to apply the GRCM. Czechia provided details showing that, although several control measures had been implemented with positive results, the measures had not been sufficient to combat carousel fraud. Administrative co-operation in the field of VAT had also not proved sufficient to combat carousel fraud.

The European Commission considers that Czechia fulfils the conditions referred to in Article 199c and that the request submitted by Czechia complies with the other requirements of that Article. It is therefore appropriate to authorise Czechia to apply the GRCM for the period 1 January 2020 to 30 June 2022.


In December 2018, the Council of the European Union adopted Directive (EU) 2018/2057 as regards the temporary application of a generalised reverse charge mechanism (GRCM) for transactions above a threshold of €17,500 via an amendment to the VAT Directive. Under Directive (EU) 2018/2057, Member States meeting certain defined criteria have the possibility, upon request, to be authorised to apply a temporary GRCM until 30 June 2022.

This followed the VAT Action Plan in which the European Commission announced its intentions regarding the introduction of a definitive VAT system for cross-border intra-Union business-to-business trade. However, given the fact that it would take several years to implement such a definitive VAT system, certain Member States asked for urgent and specific measures as to combat carousel fraud in the meantime.

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