On the proposal for a Council directive amending Directive 2006/112/EC as regards the electronic value added tax exemption certificate

The proposal addresses the amendment of the Directive 2006/112/EC as regards the electronic value added tax exemption certificate. It aims to replace the paper version of the VAT and/or Excise Duty exemption certificate by the introduction of an electronic exemption certificate confirming that a transaction qualifies for a specific exemption under the first subparagraph of Article 151(1) of that Directive.

The transactions covered by the first subparagraph of Article 151(1) are

i. the supply of goods or services under diplomatic and consular arrangements;

ii. the supply of goods or services to international bodies recognised as such by the public authorities of the host Member State, and to members of such bodies, within the limits and under the conditions laid down by the international conventions establishing the bodies or by headquarters agreements;

iii. the supply of goods or services within a Member State which is a party to the North Atlantic Treaty, intended either for the armed forces of other States party to that Treaty for the use of those forces, or of the civilian staff accompanying them, or for supplying their messes or canteens when such forces take part in the common defence effort;

iv. the supply of goods or services to another Member State, intended for the armed forces of any State which is a party to the North Atlantic Treaty, other than the Member State of destination itself, for the use of those forces, or of the civilian staff accompanying them, or for supplying their messes or canteens when such forces take part in the common defence effort;

v. the supply of goods or services to the armed forces of the United Kingdom stationed in the island of Cyprus pursuant to the Treaty of Establishment concerning the Republic of Cyprus, dated 16 August 1960, which are for the use of those forces, or of the civilian staff accompanying them, or for supplying their messes or canteens.

According to the Commission, the highly technical nature of this initiative and its alignment with efforts at EU level to promote digital government interactions justify no stakeholder consultation and no impact assessment. The proposed electronic conversion of the VAT exemption procedure supports the adaptation to the digital age and strengthens the rights of citizens with regard to the processing of their personal data.

The proposal will remove the administrative burden and costs associated with processing the paper version of the VAT exemption certificate. The implementation costs will be covered by the FISCALIS programme within its foreseen financial envelope in the current Multiannual Financial Framework. The costs for Member States, mainly related to providing access to the central application, are estimated to be low.

The new electronic certificate will not affect the scope of VAT exemptions applied. There will therefore be no impact on the EU budget as the own resources based on gross national income (GNI) will not be affected.

The proposal strengthens anti-abuse measures by stipulating that if the exemption conditions outlined in paragraph 1 are not met or cease to apply, the eligible body or individual who issued and signed the certificate will be responsible for paying the VAT to the relevant Member State. In such exceptional cases, Member States are encouraged to allow the payment of VAT without requiring full VAT registration.

The rapporteur acknowledges the highly technical nature of this initiative, its non-controversial content, and the need to enhance digital government interactions, and therefore fully supports the objectives of the directive.