Council Directive (EU) 2022/542 amending Directives 2006/112/EC and (EU) 2020/285 as regards rates of value added tax

Summary:

Directive (EU) 2022/542 - adopted by the Council of the European Union on 5 April 2022 - introducing amendments to Directive 2006/112/EC and Directive (EU) 2020/285 as regards rates of value added tax (VAT).

Further information:

Directive 2006/112/EC establishes the European Union's common system of Value Added Tax (VAT). Directive (EU) 2020/285 amended that Directive as regards the special scheme for small enterprises.

The draft Council Directive was tabled by the European Commission on 18 January 2018 as part of package on Fair Taxation. It was designed in line with the 2016 VAT Action Plan and according to a mandate provided by the Council of the European Union in May 2016. The proposal aimed at introducing more flexibility for EU Member States to change the VAT rates they apply to different products.

The plenary of the European Parliament adopted a resolution on this draft law on 3 October 2018. Following years of discussion between the Member States, the Council of the European Union was able to adopt a common position on 7 December 2021. The Act was published in the Official Journal on 6 April 2022.

Official

EUR-LEX: COM(2018)20: Proposal for a Directive amending Directive 2006/112/EC as regards rates of value added tax http://eur-lex.europa.eu/legal-content/EN/ALL/?uri=COM:2018:020:FIN

EUR-LEX: SWD(2018)7: Staff Working Document accompanying the Proposal - Impact assessment http://eur-lex.europa.eu/legal-content/EN/ALL/?uri=SWD:2018:007:FIN

EUR-LEX: SWD(2018)8: Staff Working Document accompanying the Proposal - Executive summary of the impact assessment http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=SWD:2018:008:FIN

European Parliament: Legislative Observatory: Procedure File for Proposal on Rates of value added tax (2018/0005(CNS)) https://oeil.secure.europarl.europa.eu/oeil/popups/ficheprocedure.do?reference=2018/0005(CNS)

European Parliament: Legislative Train Schedule: Modernising VAT rate regime in the European Union https://www.europarl.europa.eu/legislative-train/theme-an-economy-that-works-for-people/file-modernised-vat-rate-regime

European Commission: Taxation & Customs Union: Proposal VAT Rates https://ec.europa.eu/taxation_customs/proposal-vat-rates_en

European Commission: Press Release, 18/01/2018: VAT: More flexibility on VAT rates, less red tape for small businesses https://ec.europa.eu/commission/presscorner/detail/en/IP_18_185

European Commission: Questions and Answers on the VAT package (18 January 2018) https://ec.europa.eu/commission/presscorner/detail/en/MEMO_18_186

Council of the European Union: Press Release, 07/12/2021: Council reaches agreement on updated rules for VAT rates https://www.consilium.europa.eu/en/press/press-releases/2021/12/07/council-reaches-agreement-on-updated-rules-for-vat-rates/

European Commission: Press Release, 07/12/2021: New rules on VAT rates offer Member States more flexibility while supporting the EU's green, digital and public health priorities https://ec.europa.eu/commission/presscorner/detail/en/ip_21_6608

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Commentary and Analysis

European Tax Blog, 07/01/2022: Proposal to amend rules on VAT Directive rates https://www.europeantax.blog/post/102hfqm/proposal-to-amend-rules-on-vat-directive-rates

Wolters Kluwer: International Tax Blog, 19/07/2022: Greening the EU VAT Rate System: The Case for a Differentiated Assessment http://kluwertaxblog.com/2022/07/19/greening-the-eu-vat-rate-system-the-case-for-a-differentiated-assessment/

EPRS: Briefing, September 2022: More flexible VAT rates https://www.europarl.europa.eu/thinktank/en/document/EPRS_BRI(2018)625137

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