Communication in accordance with Article 395 of Council Directive 2006/112/EC

Pursuant to Article 395 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, the Council, acting unanimously on a proposal from the Commission, may authorise any Member State to introduce special measures for derogation from the provisions of this Directive, in order to simplify the procedure for collecting VAT or to prevent certain forms of tax evasion or avoidance. As this procedure provides for derogations from the general principles of VAT, in accordance with the consistent rulings from the European Court of Justice, such derogations should be proportionate and limited in scope.

By notification registered at the Commission on 27 November 2013, Hungary requested, on the basis of Article 199b of Directive 2006/112/EC (hereafter ‘the VAT Directive’), authorisation to introduce a Quick Reaction Mechanism (QRM) special measure derogating from Article 193 of the VAT Directive in order to apply the reverse charge mechanism to supplies of sugar. However, the Commission was not in a position to accept the proposed measure as the basic legal conditions were not fulfilled.

When a notification within the framework of the QRM is sent, an application for a ‘normal’ derogation within the meaning of Article 395 of the VAT Directive has to be filed as well in accordance with the last paragraph of Article 199b(2) of the VAT Directive. Hungary, via the same letter sent for the QRM notification, requested to be authorised to apply, as mentioned, the reverse charge mechanism to supplies of sugar.

In accordance with the second paragraph of Article 395 of that Directive, the Commission informed the other Member States by letter dated 19 March 2014 of the request made by Hungary. By letter dated 20 March 2014, the Commission notified Hungary that it had all the information it considered necessary for appraisal of the request.

• Primary Source

EUR-Lex: COM(2014)229: Follow the progress of this communication through the decision-making procedure http://eur-lex.europa.eu/legal-content/EN/HIS/?uri=COM:2014:229:FIN

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