Council Decision (EU) 2020/1109 amending Directives (EU) 2017/2455 and (EU) 2019/1995 as regards the dates of transposition and application in response to the COVID-19 pandemic

Summary:

Decision (EU) 2020/1109 adopted by the Council of the European Union on 20 July 2020, which introduces a number of amendments to Directive (EU) 2017/2455 and Directive (EU) 2019/1995 as regards dates of transposition and application of rules aimed at modernising cross-border B2C Value Added Tax (VAT) rules, in light of the COVID-19 (coronavirus) pandemic.

Further information:

Directive (EU) 2017/2455 and Directive (EU) 2019/1995 are both part of a package of legislation aimed at modernising VAT for cross-border B2C online commerce (also known as VAT e-commerce package). In both cases, the date of application was fixed to be 1 January 2021, allowing Member States some time to adapt their legislation and IT systems.

A state of play of the readiness of Member States was presented by the European Commission in February 2020, whereby two Member States raised concerns and requested a postponement for the entry into application. While initially support was provided to make sure the date of application was respected, the virus outbreak later caused a major impact on capacity across the European Union. An additional number of Member States were unable to conclude preparations.

A meeting was held on 24 April 2020 to assess readiness and the conclusion was that the provisions on the functioning of the VAT e-commerce package are based on the principle that all Member States should be in a position to apply them correctly. The objective of this proposal is therefore to postpone the date of application by six months, with a new date coming into effect on 1 July 2021.

The proposal was tabled by the European Commission on 8 May 2020. The Council of the European Union adopted the Decision on 20 July, which was published in the Official Journal on 29 July 2020.

Official

EUR-Lex: COM(2020)198: Proposal for a Council Decision amending Directives (EU) 2017/2455 and (EU) 2019/1995 as regards the dates of transposition and application due to the outbreak of the COVID-19 crisis https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=COM:2020:198:FIN

European Parliament: Legislative Observatory: Procedure File for Proposal on VAT e-commerce package – distance sales of goods and services: postponement of the date of application due to the outbreak of the COVID-19 crisis https://oeil.secure.europarl.europa.eu/oeil/popups/ficheprocedure.do?lang=en&reference=2020/0082(CNS)

Council of the European Union: Press Release, 24/06/2020: Taxation: Council agrees on the postponement of certain tax rules https://www.consilium.europa.eu/en/press/press-releases/2020/06/24/taxation-council-agrees-on-the-postponement-of-certain-tax-rules/

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