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 VAT Directive), 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 letter registered with the Commission on 7 January 2013, Hungary requested to be authorised to introduce a measure derogating from Article 193 of the VAT Directive. In accordance with the second paragraph of Article 395 of that Directive, the Commission informed the other Member States by letter dated 12 February 2013 of the request made by Hungary. By letter dated 13 February 2013, the Commission notified Hungary that it had all the information it considered necessary for appraisal of the request.

Hungary requests to be authorised to apply the reverse charge mechanism in relation to a number of agricultural goods, mainly those produced and supplied in the pig-farming and animal fodder industry. Hungary was most recently given the authorisation to apply the reverse charge mechanism to supplies of certain cereals and oilseeds.

This derogation was granted by the Council under very specific circumstances, under which Hungary committed itself to implement, during the application period of the said derogation, appropriate and effective control measures and reporting obligations which would make it possible to revert to the normal system after this transitional period of time. Hungary is obliged to notify the Commission of the introduction of those measures and obligations. Hungary has not yet fulfilled this obligation.

This approach was notably justified by the risk of fraud moving to other Member States in a sector whose economic importance is quite substantial in several Member States.

• Primary Source

EUR-Lex: COM(2013)148: Follow the progress of this communication through the decision-making procedure http://eur-lex.europa.eu/legal-content/EN/HIS/?uri=COM:2013:148:FIN

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