Proposal for a COUNCIL IMPLEMENTING DECISION amending Implementing Decision 2013/53/EU authorising the Kingdom of Belgium to introduce a special measure derogating from Article 285 of Directive 2006/112/EC on the common system of value added tax
Date: 2018-11-20
Institutions: Directorate-General for Taxation and Customs Union, European Commission
Subjects: Belgium, VAT, derogation from EU law, small business, tax exemption

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   EUROPEAN COMMISSION  Brussels, 20.11.2018 COM(2018) 749 final 2018/0387 (NLE)  Proposal for a COUNCIL IMPLEMENTING DECISION amending Implementing Decision 2013/53/EU authorising the Kingdom of Belgium to introduce a special measure derogating from Article 285 of Directive 2006/112/EC on the common system of value added tax  
 
 
EXPLANATORY MEMORANDUM 

Pursuant to Article 395(1) of 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  the  provisions  of  that  Directive  in  order  to  simplify  the 
procedure for collecting VAT or to prevent certain forms of tax evasion or avoidance. 

By  letter  registered  with  the  Commission  on  12  September  2018,  Belgium  requested  an 
authorisation to continue to exempt from VAT taxable persons whose annual turnover is no 
higher  than  EUR 25 000.  In  accordance  with  Article  395(2)  of  the  VAT  Directive,  the 
Commission informed the other Member States by letters dated 14 September 2018. By letter 
dated  17  September  2018,  the  Commission  notified  Belgium  that  it  had  all  the  information 
necessary to consider the request. 

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CONTEXT OF THE PROPOSAL 

Reasons for and objectives of the proposal 

Chapter 1 of Title XII of the VAT Directive allows for the possibility for Member States to 
apply  special  schemes  for  small  enterprises,  including  the  possibility  of  exempting  taxable 
persons below  a certain  annual  turnover. This  exemption  implies that a taxable person does 
not have to charge VAT on his supplies and, consequently, he cannot deduct the VAT on his 
input. 

Under Article 285 of the VAT Directive, Member States which did not make use of Article 14 
of Council Directive 67/228/EEC1, can exempt taxable persons whose threshold is no higher 
than EUR 5 000. As Belgium did not make use of this option, this resulted in the application 
of a particularly low threshold which in 2012 corresponded to EUR 5 580. 

At  the  request  of  Belgium,  by  Council  Implementing  Decision  2013/53/EU2  the  Council 
authorised Belgium to exempt from VAT taxable persons whose annual turnover is no higher 
than EUR 25 000 until  31 December 2015. This  decision was prolonged  until  31 December 
2018 by Council Implementing Decision (EU) 2015/23483.  

Belgium requested an extension of that measure for another limited period. Belgium indicated 
that  the  special  measure  reduces  administrative  burden  for  taxable  persons  and  for  tax 
authorities. It therefore contributes to the simplification of tax collection, as set out in Article 
395(1)  of  the  VAT  Directive.  The  measure  is  and  will  remain  fully  optional  for  taxable 
persons. 

According  to  Belgium,  at  the  end  of  2017  around  142 000  taxpayers,  being  15%  of  all 
registered taxpayers made use of the special measure. The impact of the special measure on 
VAT revenues remains negligible.  

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OJ 71, 14.4.1967, p. 1303/67. 
Council Implementing Decision 2013/53/EU of 22 January 2013 authorising the Kingdom of Belgium 
to introduce a special measure derogating from Article 285 of  Directive 2006/112/EC on the common 
system of value added tax, OJ L 22, 25.1.2013, p. 13–14. 
Council  Implementing  Decision  (EU)  2015/2348  of  10  December  2015  amending  Implementing 
Decision 2013/53/EU authorising the Kingdom of Belgium to introduce a special  measure derogating 
from  Article  285  of  Directive  2006/112/EC  on  the  common  system  of  value  added  tax,  OJ  L  330, 
16.12.2015, p. 51–52.  

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Given a potential positive impact on the reduction of administrative burden for businesses and 
tax administration without a major impact on the total VAT revenue, it is proposed to extend 
the derogation for another limited period, until 31 December 2021. 

The  Commission  has  recently  launched  a  proposal4  modifying  Articles  281  to  294  of 
Directive 2006/112/EC governing the special scheme for small enterprises. It is thus possible 
that a directive amending those Articles enters into force and sets a date from which Member 
States are to apply national provisions to implement it. If this date is set before the derogation 
expires on 31 December 2021, this Decision should cease to apply. 

Consistency with existing policy provisions in the policy area 

• 
Similar derogations have been granted to other Member States.  Luxembourg5 was granted a 
threshold  of  EUR 30 000,  Estonia6  a  threshold  of  EUR 40 000,  Italy7  a  threshold  of 
EUR 65 000,  Croatia8  a  threshold  of  EUR 45 000,  Latvia9  a  threshold  of  EUR 40 000  and 
Romania10 a threshold of EUR 88 500.  

Derogations from the VAT Directive should always be limited in time so that their effects can 
be  assessed.  Moreover,  the  provisions  of  Articles  281  to  294  of  the  VAT  Directive  on  a 
special  scheme  for  small  enterprises  are  currently  subject  to  review.  As  announced  in  the 
VAT  Action  Plan11,  and  the  2017  Commission  Work  Programme12,  the  Commission's 
proposal on the SMEs scheme13 has recently been presented. 

It is therefore proposed to grant the derogating measure until 31 December 2021 or until the 
date from which Member States are to apply any national provisions that they are required to 
adopt  in  the  event  that  a  directive  is  adopted  amending  Articles  281  to  294  of  Directive 
2006/112/EC.  

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Proposal  for  a  Council  Directive  amending  Directive  2006/112/EC  on  the  common  system  of  value 
added tax as regards the special scheme for small enterprises, 18.1.2018, COM(2018) 21 final. 
Council Implementing Decision (EU) 2017/319 of 21 February 2017 amending Implementing Decision 
2013/677/EU  authorising  Luxembourg  to  introduce  a  special  measure  derogating  from  Article  285  of 
Directive 2006/112.EC on the common system of value added tax (OJ L 47, 24.2.2017, p. 7).  
Council Implementing Decision (EU) 2017/563 of 21 March 2017 authorising the Republic of Estonia 
to  apply  a  special  measure  derogating  from  Article  287  of  Directive  2006/112/EC  on  the  common 
system of value added tax (OJ L 80, 25.3.2017, p. 33). 
Council  Implementing  Decision  (EU)  2016/1988  of  8  November  2016  amending  Implementing 
Decision  2013/678/EU  authorising  the  Italian  Republic  to  continue  to  apply  a  special  measure 
derogating from Article 285 of Directive 2006/112/EC on the common system of value added tax (OJ L 
306, 15.11.2016, p. 11). 
Council  Implementing  Decision  (EU)  2017/1768  of  25  September  2017  authorising  the  Republic  of 
Croatia  to  introduce  a  special  measure  derogating  from  Article  287  of  Directive  2006/112/EC  on  the 
common system of value added tax (OJ L 250, 28.9.2017, p. 71). 
Council  Implementing  Decision  (EU)  2017/2408  of  18  December  2017  authorising  the  Republic  of 
Latvia  to  apply  a  special  measure  derogating  from  Article  287  of  Directive  2006/112/EC  on  the 
common system of value added tax (OJ L 342, 21.12.2017, p. 8). 
Council Implementing Decision (EU) 2017/1855 of 10 October 2017 authorising  Romania to apply a 
special measure derogating from Article 287 of Directive 2006/112/EC on the common system of value 
added tax (OJ L 265, 14.10.2017, p. 19). 
Communication  from  the  Commission  to  the  European  Parliament,  the  Council  and  the  European 
Economic and Social Committee on an action plan on VAT, Towards a single EU VAT area – Time to 
decide, Brussels, 7.4.2016, COM(2016)148 final. 
Commission  Work  Programme  2017  -  Delivering  a  Europe  that  protects,  empowers  and  defends, 
Strasbourg, 25.10.2016, COM(2016)710 final 
Proposal  for  a  Council  Directive  amending  Directive  2006/112/EC  on  the  common  system  of  value 
added tax as regards the special scheme for small enterprises, 18.1.2018, COM(2018) 21 final. 

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• 

Consistency with other Union policies 

The measure is in line with the Union's objectives for small businesses, as laid down in the 
Commission  Communication  "Think  small  first"  –  a  "Small  Business  Act"  for  Europe"14 
which  calls  on  the  Member  States  to  take  account  of  the  special  features  of  SMEs  when 
designing legislation and, therefore, to simplify the existing regulatory environment. 

2. 

• 

LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY 

Legal basis 

Article 395 of the VAT Directive.  

• 

Subsidiarity (for non-exclusive competence)  

Considering  the  provision  of  the  VAT  Directive  on  which  the  proposal  is  based,  the 
subsidiarity principle does not apply. 

• 

Proportionality 

The Decision concerns an authorisation granted to a Member State upon its own request and 
does not constitute any obligation. 

Given  the  limited  scope  of  the  derogation,  the  special  measure  is  proportionate  to  the  aim 
pursued, i.e. simplification for an additional number of small taxable persons and for the tax 
administration. 

• 

Choice of the instrument 

Proposed instrument: Council Implementing Decision. 

Under  Article  395  of  Council  Directive  2006/112/EC,  a  derogation  from  the  common  VAT 
rules  is  only  possible  upon  authorisation  of  the  Council  acting  unanimously  on  a  proposal 
from the Commission. A Council Implementing Decision is the most suitable instrument since 
it can be addressed to an individual Member State. 

3. 

• 

RESULTS 
CONSULTATIONS AND IMPACT ASSESSMENTS 

EX-POST 

EVALUATIONS, 

OF 

STAKEHOLDER 

Stakeholder consultations 

This proposal is based on a request made by Belgium and concerns only this Member State. 

• 

Collection and use of expertise 

There was no need for external expertise. 

• 

Impact assessment 

The proposal for a Council Implementing Decision aims at continuing for another three years 
a  simplification  measure  which  removes  many  of  the  VAT  obligations  for  businesses 
operating  with  an  annual  turnover  no  higher  than  EUR 25 000  and  therefore  has  a  potential 
positive  impact  on  the  reduction  of  administrative  burden  for  businesses  and  tax 
administration without a major impact on the total VAT revenue. Because of the narrow scope 
of  the  derogation  and  its  limited  application  in  time,  the  impact  of  the  measure  will  in  any 
case be limited. 

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COM(2008)394 of 25 June 2008. 

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4. 

BUDGETARY IMPLICATIONS 

The  proposal  has  no  implication  for  the  EU  budget  because  Belgium  will  carry  out  a 
compensation  calculation  in  accordance  with  Article  6(1)  of  Council  Regulation  (EEC 
EURATOM) 1553/89. 

5. 

OTHER ELEMENTS 

The proposal includes a sunset clause; an automatic time limit.  

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2018/0387 (NLE) 

Proposal for a 

COUNCIL IMPLEMENTING DECISION 

amending Implementing Decision 2013/53/EU authorising the Kingdom of Belgium to 
introduce a special measure derogating from Article 285 of Directive 2006/112/EC on 
the common system of value added tax 

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty on the Functioning of the European Union,  

Having  regard  to  Council  Directive  2006/112/EC  of  28  November  2006  on  the  common 
system of value added tax1, and in particular Article 395(1) thereof, 

Having regard to the proposal from the European Commission, 

Whereas: 

(1) 

(2) 

(3) 

(4) 

(5) 

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By  Council  Implementing  Decision  2013/53/EU2  the  Kingdom  of  Belgium  was 
authorised to  apply until 31 December 2015 a special measure to exempt from VAT 
taxable  persons  whose  annual  turnover  is  no  higher  than  EUR 25 000.  This 
authorisation  was  subsequently  extended  until  31  December  2018  by  Council 
Implementing Decision (EU) 2015/23483. 

By letter registered with the Commission on 12 September 2018, Belgium requested a 
further extension of the special measure for a limited period.  

In  accordance  with  the  second  subparagraph  of  Article  395(2)  of  Directive 
2006/112/EC,  the Commission  informed the other Member States, by letter dated 14 
September 2018, of the request made by Belgium. By letter dated 17 September 2018, 
the Commission notified Belgium that it had all the information necessary to consider 
the request. 

According  to  Belgium  the  special  measure  reduces  the  administrative  burden  and 
compliance  costs  for  small  enterprises  and  for  tax  authorities  and  therefore  it 
contributes  to  the  simplification  of  tax  collection,  as  set  out  in  Article  395(1)  of 
Directive  2006/112EC.  The  measure  is  and  will  remain  entirely  optional  for  taxable 
persons.  

Given the potential positive impact on the reduction of the administrative burden and 
compliance  costs  for  small  businesses  and  for  the  tax  administration,  without  any 
major impact on the total VAT revenue to be generated, it is proposed to extend the 
special measure for another limited period, until 31 December 2021.  

OJ 347, 11.12.2006, p. 1. 
Council Implementing Decision 2013/53/EU of 22 January 2013 authorising the Kingdom of Belgium 
to introduce a special measure derogating from Article 285 of Directive 2006/112/EC on the common 
system of value added tax, (OJ L 22, 25.1.2013, p. 13). 
Council  Implementing  Decision  (EU)  2015/2348  of  10  December  2015  amending  Implementing 
Decision 2013/53/EU authorising the Kingdom of Belgium to introduce a special  measure derogating 
from  Article  285  of  Directive  2006/112/EC  on  the  common  system  of  value  added  tax,  (OJ  L  330, 
16.12.2015, p. 51).  

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(6) 

(7) 

As  Articles  281  to  294  of  Directive  2006/112/EC  governing  the  special  scheme  for 
small enterprises are subject  to  review, it is  possible that a directive  amending those 
Articles  will  enter  into  force  setting  a  date  from  which  Member  States  are  to  apply 
national  provisions  before  the  period  of  validity  of  the  derogation  expires  on  31 
December 2021. If that happens, this Decision should cease to apply. 

The  derogation  has  no  impact  on  the  Union's  own  resources  accruing  from  VAT 
because Belgium is to carry out a compensation calculation in accordance with Article 
6(1) of Council Regulation (EEC, Euratom) No 1553/894.  

(8) 

Decision 2013/53/EU should therefore be amended accordingly, 

HAS ADOPTED THIS DECISION:  

Article 1 

Article 2 of Implementing Decision 2013/53/EU is replaced by the following:  

'Article 2 

This Decision shall apply from 1 January 2013 until the earlier of the following two dates: 

(a) 

31 December 2021;  

(b) 
the date from which Member States are to apply any national provisions that they are 
required  to  adopt  in  the  event  that  a  directive  is  adopted  amending  Articles  281  to  294  of 
Directive 2006/112/EC governing the special scheme for small enterprises.' 

This Decision shall apply from 1 January 2019.  

Article 2 

This Decision is addressed to the Kingdom of Belgium. 

Done at Brussels, 

Article 3 

For the Council 
The President 

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Council  Regulation  (EEC,  Euratom)  No  1553/89  of  29  May  1989  on  the  definitive  uniform 
arrangements for the collection of own resources accruing from value added tax (OJ L 155, 7.6.1989, p. 
9). 

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