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

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Series Details L 322
Publication Date 18/12/2018
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Summary:

On 6 November 2018 the European Commission presented a proposal for a Council Decision amending Decision 2009/1008/EU authorising Latvia to extend the application of a measure derogating from Article 193 of the VAT Directive. The Council of the European Union adopted the Decision on 11 December.

Further information:

As a general rule, Article 193 of the VAT Directive stipulates that the taxable person supplying goods or services is normally liable to pay VAT. Latvia requested to apply the reverse charge mechanism to timber transactions, i.e. to make the person to whom these goods or services are supplied liable for the payment of VAT.

The derogating measure for Latvia was initially granted in January 2006 until 31 December 2009. This was subsequently extended in December 2009, January 2013 and December 2015. The current derogation expires on 31 December 2018.

According to Latvia, the timber market, which is one of the most important sectors of its economy, is particularly sensitive to VAT fraud, because it is dominated by a great number of small local operators and individual suppliers. Introducing the reverse charge mechanism to timber transactions has proven to be very effective and has decreased fraud in this sector significantly.

The Commission proposes to extend the derogation one last time, allowing Latvia to continue to apply this special measure until 31 December 2021.

Source Link Link to Main Source https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2018.322.01.0020.01.ENG
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EUR-Lex: COM(2018)725: Proposal for a Council Implementing Decision authorising Latvia 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:2018:725:FIN

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