Proposal for a COUNCIL DIRECTIVE amending Directive 2008/9/EC laying down detailed rules for the refund of value added tax, provided for in Directive 2006/112/EC, to taxable persons not established in the Member State of refund but established in another Member State
Date: 2010-07-15
Institutions: Council of the European Union
Subjects: VAT, basis of tax assessment, distributive trades, provision of services, tax exemption, tax harmonisation, tax relief

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EUROPEAN COMMISSION 

Brussels, 15.7.2010 
COM(2010)381 final 

2010/0205 (CNS) 

Proposal for a 

COUNCIL DIRECTIVE  

amending Directive 2008/9/EC laying down detailed rules for the refund of value added 
tax, provided for in Directive 2006/112/EC, to taxable persons not established in the 
Member State of refund but established in another Member State 

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EXPLANATORY MEMORANDUM 

1. 

CONTEXT OF THE PROPOSAL 

Grounds for and objectives of the proposal 

Council  Directive  2008/9/EC  (the  Refund  Directive)  allows  for  non-established  taxable 
persons to reclaim VAT on business expenses incurred in another Member State (the Member 
State of refund) via an electronic web portal set up in their own Member State (the Member 
State  of  establishment).  This  electronic  system  replaced  the  old  paper  based  system  and 
simplifies the process for businesses, and provides greater legal certainty via the imposition of 
strict  deadlines together  with interest on late  payments by  the Member State  of refund. The 
refund applications should be submitted to the Member State of establishment no later than 30 
September of the calendar year following the refund period. 

Following a number of problems incurred in the practical application of the procedure at the 
level of several Member States, it is proposed to amend the Refund Directive in order to give 
taxable  persons  more  time  to  submit  applications  relating  to  refund  periods  in  2009. 
Therefore,  exceptionally,  the  deadline  of  30  September  2010  for  the  submission  of 
applications relating to refund periods in 2009 should be extended to 31 March 2011. This is 
without  prejudice  to  the  Commission  taking  other  actions  in  order  to  ensure  the  correct 
application of European Union law. 

Further  to  the  abovementioned  problems,  it  is  also  proposed  to  provide  scope  for  certain 
implementing measures to be adopted according to the procedure provided for under Council 
Regulation No (EC) 1798/2003 on administrative cooperation in the field of value added tax. 
This would allow the Member States and the Commission to agree on the necessary technical 
aspects of application of the Directive, and hence improve the running of the system. 

General context 

Article 15 of the Refund Directive states that applications should be submitted to the Member 
State of establishment at the latest on 30 September of the calendar year following the refund 
period. As the Directive came into force on 1 January 2010, any applications concerning 2009 
are to be submitted to the Member State of establishment by 30 September 2010 at the latest. 

While  the  EU  systems  for  the  exchange  of  information  between  Member  States  have  been 
ready  on  time,  problems  have  occurred  at  the  level  of  certain  individual  Member  States' 
portals.  Some  Member  States  opened  their  web  portals  very  late  (up  to  the  middle  of  May 
2010)  and  there  have  been  various  technical  problems  with  the  operability  and  access  to 
certain portals. 

This  lack  of  availability  of  the  web  portals  in  due  time  seriously  restricts  the  fundamental 
right  of  deduction  of  the  taxable  person,  and  it  is  for  this  reason  that  the  Commission  is 
proposing to extend the deadline for applications relating to 2009 in order that taxable persons 
can properly exercise this right.  

Member  States  have  also  had  divergent  views  of  how  the  system  should  operate  from  a 
technical point of view, which have only come to light once the system has been operational. 
Whilst the common IT elements are defined at the EU level, the technical requirements for the 
electronic communication with taxable persons are defined by each Member State. This has 

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also  contributed  to  a  number  of  delays  and  problems  in  the  submission  and  processing  of 
applications. Therefore it is necessary to provide that the Commission can adopt the necessary 
implementing measures following the opinion of the Standing Committee on Administrative 
Co-operation.  These  areas  specifically  relate  to  the  electronic  application  to  the  web  portal; 
the  attachments  to  applications;  the  means  by  which  the  Member  State  of  establishment 
confirms receipt and transfer of the application; and the means by which the Member State of 
refund notifies the applicant it has received the application, or requests further information.  

Existing provisions in the area of the proposal 

Council Directive 2008/9/EC of 12 February 2008 laying down detailed rules for the refund 
of value added tax, provided for in Directive 2006/112/EC, to taxable persons not established 
in the Member State of refund but established in another Member State. 

Council Regulation (EC) No 1798/2003 of 7 October 2003 on administrative cooperation in 
the field of value added tax and repealing Regulation (EEC) No 218/92. 

Commission Regulation (EC) No 1174/2009 of 30 November 2009 laying down rules for the 
implementation of Articles 34a and 37 of Council Regulation (EC) No 1798/2003 as regards 
refunds of value added tax under Council Directive 2008/9/EC.  

2. 

RESULTS OF CONSULTATIONS WITH THE INTERESTED PARTIES AND 
IMPACT ASSESSMENTS 

Consultation of interested parties 

Informal  consultation  with  businesses  has  been  organised  (meetings  and  conferences  with 
business organisations) and has made it possible to collect feedback. Business representatives 
notably  expressed  their  strong  concerns  with  the  deadline  of  30  September  2010  for 
applications  relating  to  2009.  No  formal  consultation  of  the  proposed  measure  can  be 
organised given the urgency of the measure.  

Impact assessment 

As this measure does not significantly amend the existing measure, no impact assessment is 
necessary. 

3. 

LEGAL ELEMENTS OF THE PROPOSAL 

Summary of the proposed action 

The proposal will extend the deadline for submission of a refund application under Directive 
2008/9/EC  to  31  March  2011  exceptionally  for  applications  concerning  refund  periods  in 
2009,  and  provide  for  certain  implementing  measures  to  be  adopted  under  the  procedure 
provided for in Council Regulation (EC) No 1798/2003. 

4. 

BUDGETARY IMPLICATION 

The proposal has no negative impact on the EU budget. 

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2010/0205 (CNS) 

Proposal for a 

COUNCIL DIRECTIVE 

amending Directive 2008/9/EC laying down detailed rules for the refund of value added 
tax, provided for in Directive 2006/112/EC, to taxable persons not established in the 
Member State of refund but established in another Member State  

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 113 thereof, 

Having regard to the proposal from the European Commission, 

After transmission of the draft legislative act to the national Parliaments, 

Having regard to the opinion of the European Parliament1, 

Having regard to the opinion of the European Economic and Social Committee2, 

Acting in accordance with a special legislative procedure, 

Whereas: 

(1) 

(2) 

(3) 

Council Directive 2008/9/EC of 12 February 2008 laying down detailed rules for the 
refund of value added tax, provided for in Directive 2006/112/EC, to taxable persons 
not  established  in  the  Member  State  of  refund  but  established  in  another  Member 
State3 ('the Refund Directive') took effect on 1 January 2010. 

Under  the  Refund  Directive,  Member  States  are  obliged  to  develop  a  web  portal  via 
which  taxable  persons  established  in  a  Member  State  submit  applications  for  the 
refund of value added tax incurred in a Member State where they are not established. 
The web portal should be operational on the date the Refund Directive took effect. 

A  number  of  serious  delays  and  certain  technical  problems  have  affected  the 
development  and  operation  of  the  web  portals  in  some  Member  States,  thereby 
preventing  the  timely  submission  of  certain  applications.  An  application  is  to  be 
submitted to the Member State of establishment by 30 September of the calendar year 
following that in which the refund period occurs at the latest. Given that deadline, and 
the inoperability of some of the web portals, some taxable persons risk being unable to 
exercise their right to deduct expenses incurred in 2009. The deadline should therefore 

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3 

OJ C , , p. . 
OJ C , , p. . 
OJ L 44, 20.2.2008, p. 23. 

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(4) 

(5) 

(6) 

(7) 

exceptionally be extended  to  31  March 2011 for claims relating  to refund periods in 
2009. 

Taxable persons are also facing difficulties due to a number of technical divergences 
in  the  application  of  the  Refund  Directive  by  Member  States.  To  avoid  such 
divergences, it is necessary for certain details of the technical application of the system 
to be determined by the procedure laid out in Article 44 of Council Regulation (EC) 
No 1798/2003  of  7 October 2003 on administrative cooperation in the field of value 
added tax and repealing Regulation (EEC) No 218/924.  

The  technical  details  to  be  determined  relate  to  the  electronic  applications,  the 
attachments  to  applications,  the  means  by  which  the  Member  State  of  establishment 
confirms receipt and transfer of the application and the means by which the Member 
State of refund notifies reception of the application and requests further information. 
Standardised references and common technical requirements are indeed necessary for 
the scheme to function properly.  

The  measures  necessary  for  the  implementation  of  the  detailed  rules,  including 
common  forms  where  necessary,  on  the  electronic  submissions  and  notifications 
referred  to  in  Directive  2008/9/EC  should  be  adopted  in  accordance  with  Council 
Decision 1999/468/EC of 28 June 1999 laying down the procedures for the exercise of 
implementing powers conferred on the Commission5. 

In order to ensure that taxable persons will not be required to meet the deadline of 30 
September 2010 in respect of claims relating to refund periods in 2009, this Directive 
should  enter  into  force  on  the  day  following  that  of  its  publication  in  the  Official 
Journal of the European Union. 

(8) 

Directive 2008/9/EC should therefore be amended accordingly, 

HAS ADOPTED THIS DIRECTIVE: 

Article 1 

Directive 2008/9/EC is hereby amended as follows: 

(1) In Article 15(1), the following subparagraph is added:  

'Refund applications which relate to refund periods in 2009 shall be submitted to the Member 
State of establishment on 31 March 2011 at the latest.' 

(2) The following Article 27a is inserted: 

The  Commission  shall,  in  accordance  with  the  procedure  referred  to  in  Article  44(2)  of 
Council Regulation (EC) No 1798/2003, adopt measures laying down detailed rules, including 

'Article 27a 

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OJ L 264, 15.10.2003, p.1. 
OJ L 184, 17.7.1999, p. 23. 

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common forms where necessary, on the electronic submissions and notifications referred to in 
Articles 7 and 10, Article 15(2), Article 18(2), Article 19(1) and Article 20 of this Directive.'  

Article 2 

1. 

Member  States  shall  bring  into  force  the  laws,  regulations  and  administrative 
provisions necessary to comply with this Directive by 1 October 2010 at the latest. 
They  shall  forthwith  communicate  to  the  Commission  the  text  of  those  provisions 
and a correlation table between those provisions and this Directive. 

When  Member  States  adopt  those  provisions,  they  shall  contain  a  reference  to  this 
Directive  or  be  accompanied  by  such  a  reference  on  the  occasion  of  their  official 
publication. Member States shall determine how such reference is to be made. 

2. 

Member States shall communicate to the Commission the text of the main provisions 
of national law which they adopt in the field covered by this Directive. 

This Directive shall enter into force on the day following that of its publication in the Official 
Journal of the European Union.  

Article 3 

Article 4 

This Directive is addressed to the Member States. 

Done at Brussels,  

For the Council 
The President 

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