| Author (Corporate) | European Commission |
|---|---|
| Series Title | COM |
| Series Details | (2015) 560 final (10.11.15) |
| Publication Date | 10/11/2015 |
| Content Type | Policy-making |
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Pursuant to Article 395 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax (hereafter 'the VAT Directive'), the Council, acting unanimously on a proposal from the Commission, may authorise any Member State to apply special measures for derogation from that Directive in order to simplify the procedure for charging the tax or to prevent certain types of tax evasion or avoidance. By letter registered with the Commission on 30 March 2015, the Republic of Latvia requested authorization to extend the validity of the current application of a reverse charge mechanism in relation to supplies of timber. As regards the supplies of timber, Latvia was confronted with a considerable number of traders that failed to comply with their obligations. Businesses in this sector are frequently small resellers, which often disappear without paying to the tax authorities the tax they charged on their supplies but leaving their customers in receipt of a valid invoice for VAT deduction. Under the reverse charge mechanism, by derogating from a general rule provided in Article 193 of the VAT Directive, the customer becomes liable for the payment of the VAT on domestic transactions. From the report submitted by the Latvian Tax Authorities together with the request to continue to apply the derogating measure, the Commission understands that the situation, on which the initial derogation was based, continues to exist. In the opinion of Latvia, it is therefore important to continue using the reverse charge procedure for the payment of VAT in Latvia on timber transactions. On this basis, the derogation should be granted for another limited period. |
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| Source Link | http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=COM:2015:560:FIN |
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| Countries / Regions | Latvia |
