2007/133/EC: Council Decision of 30 January 2007 authorising Estonia, Slovenia, Sweden and the United Kingdom to apply a special measure derogating from Article 167 of Directive 2006/112/EC on the common system of value added tax
Date: 2007-01-30
Institutions: Council of the European Union
Subjects: Estonia, Slovenia, Sweden, United Kingdom, VAT, basis of tax assessment, delivery, derogation from EU law, tax relief

L 57/12

EN

Official Journal of the European Union

24.2.2007

COUNCIL DECISION

of 30 January 2007

authorising Estonia, Slovenia, Sweden and the United Kingdom to apply a special measure
derogating from Article 167 of Directive 2006/112/EC on the common system of value added tax

(2007/133/EC)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty
Community,

establishing the European

Having regard to Council Directive 2006/112/EC of 28
November 2006 on the common system of value added
tax (1), and in particular Article 395(1) thereof,

Having regard to the proposal from the Commission,

Whereas:

(1)

the laws of

In accordance with Article 27 of
the Sixth Council
Directive 77/388/EEC of 17 May 1977 on the harmon-
isation of
the Member States relating to
turnover taxes — Common system of value added tax:
uniform basis of assessment (2), the United Kingdom was
authorised by Decision 97/375/EC (3), by way of dero-
gation from Article 17(1) of the said Directive and in
order to operate an optional scheme in which tax is
accounted for on the basis of cash paid and received
(cash accounting), to postpone the right of deduction
of input VAT of taxable persons who account for the
output VAT for their supplies when they have received
the payment of the price from their customers, pursuant
to the second indent of the third subparagraph of Article
10(2) of the said Directive, until the input VAT has been
paid to the supplier.

(2)

By letter registered by the Secretariat-General of
the
Commission on 26 January 2006, the United Kingdom
requested an extension of three years of that derogation.
The United Kingdom also requested for the turnover
limit for the simplified cash accounting scheme to be
increased from GBP 660 000 to GBP 1 350 000.

(3)

By letter registered by the Secretariat-General of
the
Commission on 31 August 2006, Estonia requested a
derogation from Article 17(1) of Directive 77/388/EEC

(1) OJ L 347, 11.12.2006, p. 1. Directive as amended by Directive

2006/138/EC (OJ L 384, 29.12.2006, p. 92).

(2) OJ L 145, 13.6.1977, p. 1. Directive as last amended by Directive

2006/98/EC (OJ L 363, 20.12.2006, p. 129).

(3) OJ L 158, 17.6.1997, p. 43. Decision as last amended by Decision

2003/909/EC (OJ L 342, 30.12.2003, p. 49).

(4)

(5)

(6)

scheme

under which

to allow the VAT to become deductible by the taxable
person when the supplier is paid. This postponement of
deduction will apply only under a simplified cash
accounting
persons
for the output VAT for their supplies when
account
from their customers,
they have received payment
pursuant to the second indent of the third subparagraph
of Article 10(2) of the said Directive. Estonia requested
that the cash accounting scheme be limited to taxable
persons classified as sole proprietors under Estonian law.

taxable

By letter registered by the Secretariat-General of
the
Commission on 27 June 2006, Slovenia requested a
derogation from Article 17(1) of Directive 77/388/EEC
to allow the VAT to become deductible by the taxable
person when the supplier is paid. This postponement of
deduction will apply only under a simplified cash
persons
accounting
for the output VAT for their supplies when
account
they have received payment
from their customers,
pursuant to the second indent of the third subparagraph
of Article 10(2) of the said Directive. Slovenia requested
simplified cash
that
accounting scheme be set at EUR 208 646.

under which

turnover

scheme

taxable

limit

their

the

for

the
By letter registered by the Secretariat-General of
Commission on 6 April 2006, Sweden requested a dero-
gation from Article 17(1) of Directive 77/388/EEC to
allow the VAT to become deductible by the taxable
person when the supplier is paid. This postponement
of deduction will apply only under a simplified cash
accounting
persons
for the output VAT for their supplies when
account
they have received payment
from their customers,
pursuant to the second indent of the third subparagraph
of Article 10(2) of the said Directive. Sweden requested
that
simplified cash
accounting scheme be set at SEK 3 000 000.

under which

turnover

scheme

taxable

limit

their

the

for

27(2)

accordance with Article

of Directive
In
77/388/EEC,
the Commission informed the other
Member States by letter dated 6 October 2006 of the
request made by Estonia, by letter dated 6 October 2006
of
the request made by Slovenia, by letter dated 4
October 2006 of the request made by Sweden and by
letter dated 6 October 2006 of the request made by the
United Kingdom. By letter dated 6 October 2006 the
Commission notified Sweden and by letters dated 9
October 2006 the Commission
Estonia,
Slovenia and the United Kingdom, that it had all the
information it considered necessary for the appraisal of
their request.

notified

24.2.2007

EN

Official Journal of the European Union

L 57/13

Directive 77/388/EEC has been recast and repealed by
Directive 2006/112/EC. References to the provisions of
the former are to be construed as references to the latter.

HAS ADOPTED THIS DECISION:

(7)

(8)

(9)

(10)

The cash accounting scheme is a simplification measure
for small and medium sized businesses. Regarding the
United Kingdom, raising the ceiling for the simplified
scheme will allow a greater number of firms to opt for
the scheme. The increase of the turnover limit would
extend the scheme to a potential additional 57 000 busi-
nesses. The derogation requested by Estonia will allow
5 700 businesses to use the cash accounting scheme. In
the case of Slovenia, 62 000 businesses will be able to
opt for the use of the cash accounting scheme. As for
Sweden, the scheme will be available to 630 000 busi-
nesses.

The Estonian, Slovenian, Swedish and United Kingdom
derogations can be accepted in view of the percentage of
eligible businesses that could opt
this simplified
scheme and the limited duration.

for

interruption,

Since taxable persons who have applied the optional
scheme in the past should be able to continue using it
the authorisation given to the
without
United Kingdom should apply from the date of expiry
of Decision 97/375/EC. Also as this would allow more
taxable persons to adopt the scheme from the beginning
their accounting year, Member States concerned
of
should be
scheme
available as from 1 January 2007.

allowed to make

the optional

(11)

the tax revenue of

The derogation in question does not affect the overall
amount of
the Member States
collected at the stage of
final consumption and as a
consequence does not have a negative effect on the
own resources of the European Communities accruing
from VAT.

(12) Given the urgency of the matter, in order to avoid a legal
gap, it is imperative to grant an exception to the six-week
period mentioned in point I(3) of the Protocol on the
role of national Parliaments in the European Union,
annexed to the Treaty on European Union and to the
Treaties establishing the European Communities,

Article 1

By way of derogation from Article 167 of Directive
2006/112/EC, Estonia, Slovenia, Sweden and the United
Kingdom are authorised to postpone the right of deduction of
the input tax of the taxable persons, as defined in the second
paragraph, until the input tax has been paid to their suppliers.

The taxable persons concerned must use a scheme whereby they
account for the output VAT for their supplies when they have
received the payments from their customers. They must have an
annual turnover not higher than EUR 208 646 for Slovenia,
the
SEK 3 000 000 for Sweden and GBP 1 350 000 for
United Kingdom, or, in the case of Estonia, must be registered
as a sole proprietor.

Article 2

Decision 97/375/EC is hereby repealed.

Article 3

This Decision shall apply from 1 January 2007 to 31 December
2009.

Article 3

This Decision is addressed to the Republic of Estonia,
the
Republic of Slovenia, the Kingdom of Sweden and the United
Kingdom of Great Britain and Northern Ireland.

Done at Brussels, 30 January 2007.

For the Council
The President

P. STEINBRÜCK