Considerations on COM(2025)7 - Amendment of Implementing Decision (EU) 2019/310 as regards the extension of the authorisation given to Poland to derogate from Article 226 of the VAT Directive - Main contents
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| dossier | COM(2025)7 - Amendment of Implementing Decision (EU) 2019/310 as regards the extension of the authorisation given to Poland to derogate ... |
|---|---|
| document | COM(2025)7 |
| date | January 14, 2025 |
(2) By letters registered with the Commission on 27 March 2024 and on 1 October 2024, Poland requested a further extension, from 1 March 2025 to 28 February 2028, of the authorisation to derogate from Article 226 of Directive 2006/112/EC, as regards VAT invoicing requirements, in order to continue to apply the mandatory split payment mechanism to supplies of goods and services susceptible of fraud and generally covered by the procedure whereby the purchaser is designated as liable for the VAT on certain supplies (the so-called ‘reverse charge mechanism’) and by joint and several liability in Poland.
(3) In accordance with Article 395(2) of Directive 2006/112/EC, the Commission informed the other Member States by letter dated 9 October 2024 of the request made by Poland. By letter dated 10 October 2024, the Commission notified Poland that it had all the information necessary to consider the request.
(4) The mandatory split payment mechanism applies to the goods and services listed in the Annex to Implementing Decision (EU) 2019/310. That Annex consists of an extensive, detailed list of goods and services classified in accordance with the Polish Classification of Goods and Services. As Poland is currently replacing at national level that classification system with the system of the Combined Nomenclature, as laid down in Council Regulation (EEC) No 2658/874, to avoid the need to amend the authorisation to derogate from Article 226 of Directive 2006/112/EC, the list in the Annex to Implementing Decision (EU) 2019/310 should be replaced by a simplified list of categories of goods and services. Poland has confirmed that the replacement of the list does not entail the extension of the scope of the mandatory split payment mechanism. To that end, the obligation to notify a national measure to the Commission provided for in Article 2 of Implementing Decision (EU) 2019/310 continues to apply.
(5) The report Poland submitted on 13 November 2023, under Article 2, second paragraph, of Council Implementing Decision (EU) 2019/310, on the overall impact of the extension of the authorisation on the level of VAT fraud and on the taxable persons concerned demonstrates that, since the authorisation was extended, the continued use of the mandatory split payment mechanism for certain supplies of goods and services resulted in the reduction of, in particular, carousel fraud in the sectors that are subject to that mechanism, such as the sector of steel, scrap, precious metals and fuels. Poland further reported that, where a trader is entitled to a VAT refund, Polish authorities have managed to reduce the refund time below twenty days, in order to enhance the trader’s cash-flow position.
(6) Derogations are in general granted for a limited period of time to allow an assessment whether the special measure is appropriate and effective. It is therefore appropriate that the derogation is extended until 28 February 2028. The obligation, provided for in Article 2 of Implementing Decision (EU) 2019/310, for Poland to submit a new report on the overall impact of the derogation, in case it requests an extension thereof, should continue to apply.
(7) The special measure will not negatively affect the overall amount of tax revenue collected at the stage of final consumption and will have no adverse impact on the Union's own resources accruing from VAT.
(8) Implementing Decision (EU) 2019/310 should therefore be amended accordingly.