Proposal to amend Decision 2013/805/EU authorising Poland to introduce measures derogating from Article 26(1)(a) and Article 168 of Directive 2006/112/EC on the common system of value added tax

Author (Corporate)
Series Details COM (2019) 309
Publication Date 02/07/2019
Content Type


Proposal presented on 2 July 2019 by the European Commission authorising Poland to continue to apply a derogation from Articles 26(1)(a) and 168 of the VAT Directive on expenditure relating to motor vehicles.

Further information:

On 14 January 2019, Poland requested a further extension of the derogation from Articles 26(1)(a) and 168 of the VAT Directive in order to continue (a) to limit to 50% the right of deduction of input VAT on expenditure relating to certain motor vehicles and (b) to exempt from VAT the use by taxable persons of motor vehicles for private purposes or for any purpose other than business activities.

The present request from Poland to prolong the derogation until 31 December 2022 is based on the same grounds as those presented in the previous requests. Given that the EU legal framework and the factual situation remain unchanged, the requested extension of the derogating measures appears to be justified. Therefore, the Commission proposes that the request be granted.


Article 168 of the VAT Directive provides that a taxable person is entitled to deduct VAT charged on purchases of goods or services used for the purposes of taxed transactions in the Member State where such transactions take place. Article 26(1)(a) of the Directive stipulates that the use for private purposes of goods forming part of the assets of a business shall be considered as a supply of services for consideration if the VAT on such goods was eligible for deduction.

In the case of passenger cars forming part of the assets of a business, the application of the above provisions encounters a number of practical difficulties, in particular because it is not easy to distinguish between private and business use of a motor vehicle. Moreover, in cases where records about the use of such cars are kept, they add an additional burden to both businesses and administrations in terms of maintaining and controlling them. Those difficulties may increase the risk of VAT abuse or fraud attempts.

The authorisation for the above derogating measures was first granted by Decision 2013/805/EU for the period 1 January 2014 until 31 December 2016. Consequently, Poland incorporated the authorised measures into the national VAT legislation with effect from 1 April 2014.  In 2016, Poland requested an extension of the period in which the measures in question could be applied. The Council authorised an extension until 31 December 2019 by means of Decision (EU) 2016/1837.

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