Considerations on COM(2024)399 -

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dossier COM(2024)399 - .
document COM(2024)399
date September  9, 2024
 
(1) Articles 168 and 168a of Directive 2006/112/EC govern taxable persons' right to deduct value added tax (VAT) charged on goods and services supplied to them for the purposes of their taxed transactions. Germany has been authorised to introduce a special measure intended to exclude VAT borne on goods and services from the right of deduction where those goods and services are used by the taxable person for more than 90 % for his private purposes or for purposes of his employees, or in general for non-business purposes or non-economic activities.

(2) Initially, Council Decision 2000/186/EC2 authorised Germany to introduce and apply special measures derogating from Articles 6 and 17 of Council Directive 77/388/EEC3 until 31 December 2002. Council Decision 2003/354/EC4 authorised Germany to apply a special measure derogating from Article 17 of Directive 77/388/EEC until 30 June 2004. Council Decision 2004/817/EC5 extended the authorisation until 31 December 2009.

(3) Council Decision 2009/791/EC6 authorised Germany to continue to apply a special measure derogating from Article 168 of Directive 2006/112/EC until 31 December 2021. The authorisation to apply the special measure under Council Decision 2009/791/EC, as amended by Council Implementing Decision (EU) 2021/17767, is due to expire on 31 December 2024.

(4) By letter registered by the Commission on 19 February 2024, Germany requested the authorisation to continue to apply a special measure derogating from Articles 168 and 168a of Directive 2006/112/EC to entirely exclude 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. That request was accompanied by a report on the application of the special measure including a review of the apportionment rate applied on the right to deduct VAT as required by Article 2 of Council Decision 2009/791/EC. The Commission requested further explanations from Germany on 26 March 2024 and a reply was received on 27 March 2024.

(5) In accordance with Article 395(2), second subparagraph, of Directive 2006/112/EC, the Commission informed the other Member States, by letters dated 27 May 2024 of the request made by Germany. By letter dated 28 May 2024, the Commission notified Germany that it had all the information necessary to consider the request.

(6) According to Germany the special measure has proven very effective to simplify the collection of VAT and to avoid tax evasion and avoidance. The special measure reduces administrative burdens for businesses and tax administrations, as there is no need for any monitoring of the subsequent use of the goods and services to which the exclusion from deduction applied at the time of their acquisition. Germany should therefore be authorised to continue to apply this special measure for a further limited period until 31 December 2027.

(7) In the event that Germany considers an extension beyond 2027 to be necessary, it should submit a request for an extension to the Commission by 31 March 2027 accompanied by a report on the application of the measure which should include a review of the apportionment rate applied.

(8) The special measure will have no adverse impact on the Union's own resources accruing from VAT.

(9) Decision 2009/791/EC should therefore be amended accordingly.