Decision (EU) 2018/1920 authorising Lithuania to extend the application of a measure derogating from Article 193 of Directive 2006/112/EC on the common system of value added tax

Summary:

On 5 November 2018 the European Commission presented a proposal for a Council Implementing Decision amending Decision 2010/99/EU authorising Lithuania to continue to apply a derogation from Article 193 of the VAT Directive. The Council of the European Union adopted the Decision on 4 December.

Further information:

Article 193 of the VAT Directive stipulates that the taxable person supplying goods or services is normally liable to pay VAT. Member States may apply measures derogating from the provisions of the VAT Directive to simplify the procedure for collecting VAT or to prevent certain forms of tax evasion or avoidance.

The derogating measure for Lithuania was initially granted in May 2006 for a period until 31 December 2009. The measure was subsequently extended in February 2010, November 2012 and December 2015. The current derogation expires on 31 December 2018.

Lithuania has requested to continue to apply the reverse charge mechanism to supplies of timber and to supplies of goods and services by a taxable person under an insolvency or a restructuring procedure subject to judicial oversight, i.e. to make the person to whom these goods or services are supplied liable for the payment of VAT.

Lithuania informed the Commission that the special measure has proven to be very effective in preventing fraud, and the number of infringements has fallen significantly since the introduction of the reverse charge mechanism. The Commission therefore proposed to extend the derogating measure until 31 December 2021.

Official

EUR-Lex: COM(2018)727: Proposal for a Council Implementing Decision authorising Lithuania to extend the application of a measure derogating from Article 193 of Directive 2006/112/EC https://eur-lex.europa.eu/legal-content/EN/HIS/?uri=COM:2018:727:FIN

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