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, such derogations should be proportionate and limited in scope.

By letter registered at the Commission on 18 June 2015, the Republic of Austria, the Republic of Bulgaria, the Czech Republic and the Slovak Republic requested to be authorised to introduce a measure derogating from Article 193 of the VAT Directive as regards the person liable for the payment of the VAT to the tax authorities and to apply the so-called ‘reverse charge mechanism’.

The person liable for the payment of VAT pursuant to Article 193 of the VAT Directive is the taxable person supplying the goods or services. The purpose of the reverse charge mechanism is to shift that liability onto the taxable person to whom the supplies are made.

It is the Commission's view that any substantial change to the principles of the VAT system should be decided at EU level in the context of the reform of the VAT system, and not through stand-alone national solutions. On that basis, the Commission objects to the request made by the Republic of Austria, the Republic of Bulgaria, the Czech Republic and the Slovak Republic.