| Author (Corporate) | Council of the European Union |
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| Series Title | Official Journal of the European Union |
| Series Details | L 329 |
| Publication Date | 27/12/2018 |
| Content Type | Legislation |
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Summary: On 21 December 2016 the European Commission presented a proposal to amend the VAT Directive as regards the temporary application of a generalised reverse charge mechanism in relation to supplies of goods and services above a certain threshold. The Council of the European Union adopted the new Directive on 20 December 2018. Further information: In its Communication of 7 April 2016 on an action plan on VAT, the Commission announced its intention to come forward with a proposal for a definitive VAT regime for cross-border business-to-business trade between Member States on the basis of the taxation of cross-border supplies of goods and services. In light of the level of VAT fraud and the fact that not all Member States are equally affected by such fraud, and given that it will take several years for the definitive VAT regime to be implemented, some urgent and specific measures may be necessary. In this context, certain Member States asked to be allowed to implement a temporary generalised reverse charge mechanism (GRCM) with a certain threshold per transaction which would derogate from one of the general principles of the current VAT system. To that end, the Commission agreed to thoroughly assess the political, legal and economic implications of such a temporary GRCM before presenting its conclusions. This in depth analysis was presented during the ECOFIN meeting of 17 June 2016. In the context of a political agreement on the overall anti-fraud policy within the EU, the Commission committed to present, before the end of that year, a legislative proposal allowing individual Member States to derogate from the common system of value added tax so as to apply a generalised reverse charge mechanism to domestic supplies above a defined threshold. |
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| Source Link | Link to Main Source https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2018.329.01.0003.01.ENG |
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| Subject Categories | Taxation |
| Subject Tags | Value Added Tax [VAT] |
| Keywords | Reverse Charge Mechanism |
| International Organisations | European Union [EU] |
