Proposal for a COUNCIL IMPLEMENTING REGULATION amending Implementing Regulation (EU) 2019/2026 as regards the dates of application due to the outbreak of the COVID-19 crisis
Date: 2020-05-08
Institutions: Directorate-General for Taxation and Customs Union, European Commission
Subjects: VAT, application of EU law, electronic commerce, epidemic, goods and services, import (EU), infectious disease, provision of services, supply, taxpayer, third country

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   EUROPEAN COMMISSION  Brussels, 8.5.2020  COM(2020) 199 final 2020/0083 (NLE)  Proposal for a COUNCIL IMPLEMENTING REGULATION  amending Implementing Regulation (EU) 2019/2026 as regards the dates of application due to the outbreak of the COVID-19 crisis     
 
EXPLANATORY MEMORANDUM 

1. 

CONTEXT OF THE PROPOSAL 

Reasons for and objectives of the proposal 

• 
On  21 November 2019,  the  Council  adopted  Implementing  Regulation  (EU) 2019/20261 
amending  Implementing  Regulation  (EU)  No  282/20112  as  regards  supplies  of  goods  or 
services  facilitated  by  electronic  interfaces  and  the  special  schemes  for  taxable  persons 
supplying  services  to  non-taxable  persons,  making  distance  sales  of  goods  and  certain 
domestic supplies of goods. 

The  date  of  application  of  the  bulk  of  the  package  of  legislation  on  modernising  VAT  for 
cross-border  B2C  e-commerce  (“VAT  e-commerce  package”),  including  the  implementing 
provisions, was fixed to be 1 January 2021. 

The  Commission  presented  a  state  of  play  of  the  readiness  of  Member  States  on 
14 February 2020, whereby most Member States confirmed that they would be in a position to 
apply  the  rules  by  due  date.  Two  Member  States  raised  concerns  and  requested  a 
postponement  for  the  entry  into  application  by  one  year  or  more.  The  Commission  offered 
assistance to those Member States encountering  difficulties in  order to  help  them overcome 
these hurdles and remained confident that Member States would be ready by 1 January 2021.  

However,  due  to  the  unforeseen  outbreak  of  the  COVID-19  crisis  and  its  major  impact, 
Member States had to shift priorities and re-allocate resources from the implementation of the 
VAT e-commerce package to fighting this pandemic. Therefore, other Member States cannot 
guarantee  anymore  to  be  able  to  finalise  the  preparatory  work  to  apply  the  new  rules  by 
1 January 2021. The IT system at national level required for the implementation of the VAT 
e-commerce package seriously risks to be delayed and thus jeopardises several Member States 
to be ready to apply the new rules as of 1 January 2021. Similar concerns were raised by key 
economic  operators,  especially  postal  and  courier  operators,  who  urged  the  Commission  to 
postpone  the  date  of  application  of  the  VAT  e-commerce  package  by  6  months  due  to  the 
COVID-19 crisis.  

The  Commission  held  a  meeting  with  Member  States  on  24 April 2020  to  assess  their 
readiness  to  apply  the  new  rules  as  of  1 January 2021.  The  majority  of  Member  States  still 
confirmed  to  be  ready  to  apply  them  on  time,  but  stressed  that  the  provisions  on  the 
functioning  of  the  VAT  e-commerce  package  are  based  on  the  principle  that  all  Member 
States should be in a position to apply them correctly and would therefore be ready to support 
a postponement not exceeding 6 months.  

of 

the 

The  objective  of  this  proposal  is  to  postpone  the  dates  of  application  of  the  implementing 
rules 
in 
Implementing Regulation (EU) 2019/2026  and  scheduled  for  1 January 2021  by  six  months. 
The  new  date  of  application  shall  thus  be  1 July 2021.  A  postponement  of  six  months  is 
suggested,  because  the  delay  should  be  kept  as  short  as  possible  to  minimise  additional 
budgetary losses for Member States. 

e-commerce 

package 

down 

VAT 

laid 

1 

2 

Council  Implementing  Regulation  (EU)  2019/2026  of  21  November  2019  amending  Implementing 
Regulation  (EU)  No  282/2011  as  regards  supplies  of  goods  or  services  facilitated  by  electronic 
interfaces  and  the  special  schemes  for  taxable  persons  supplying  services  to  non-taxable  persons, 
making distance sales of goods and certain domestic supplies of goods (OJ L 313, 4.12.2019, p. 14). 
Council  Implementing  Regulation  (EU)  No  282/2011  of  15  March  2011  laying  down  implementing 
measures for Directive 2006/112/EC on the common system of value added tax (OJ L 77, 23.3.2011, p. 
1). 

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• 

Consistency with existing policy provisions in the policy area 

The  general  objective  of  this  proposal  is  the  smooth  functioning  of  the  internal  market,  the 
competitiveness  of  EU  business  and  the  need  to  ensure  effective  taxation  of  the  digital 
economy.  The  VAT  e-commerce  package  is  consistent  with  the  future  application  of  the 
destination principle for VAT as set out in the recent VAT Action plan supported by Council3.  

In addition to the VAT Action Plan, the VAT e-commerce package has been identified as a 
key  initiative  in  the  Digital  Single  Market  Strategy4  ('DSM  Strategy')  as  well  as  the  Single 
Market strategy5 and the E-Government Action Plan6.  

2. 

LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY 

Legal basis 

• 
The  proposal  is  based  on  Article  397  of  Directive  2006/112/EC7  on  the  common  system  of 
value  added  tax  (the  'VAT  Directive').  This  article  provides  that  the  Council,  acting 
unanimously  on  a  proposal  from  the  Commission,  shall  adopt  the  measures  necessary  to 
implement the VAT Directive.  

• 

Subsidiarity (for non-exclusive competence)  

This  proposal  changes  the  date  of  application  of  the  implementing  rules  of  the  VAT  e-
commerce  package  that  have  been  adopted  by  Council  in  November 2019  insofar  that  date 
was fixed on 1 January 2021. This goes hand in hand with the proposal to postpone the date of 
application of the VAT e-commerce package, including thus all the legal acts affected. This 
proposal  is  made as a consequence of and reaction to  the outbreak of the COVID-19  crisis, 
which  confronts  Member  States  with  challenges  at  national  level  to  tackle  the  current 
emergency situation and whichs causes some of them difficulties in  guaranteeing to  finalise 
the  preparatory  work  to  apply  the  new  rules  as  of  1 January 2021.  The  provisions  on  the 
functioning  of  the  VAT  e-commerce  package  are  based  on  the  principle  that  all  Member 
States should be in a position to apply them correctly. 

The  measures  necessary  to  implement  the  VAT  Directive  are  adopted  by  Council  acting 
unanimously on a proposal from the Commission. A proposal by the Commission is therefore 
necessary  to  change  the  date  of  application  of  the  already  adopted  implementing  measures, 
which cannot be achieved by unilateral actions at national level. 

The proposal is therefore consistent with the subsidiarity principle. 

• 

Proportionality 

The proposal is consistent with the principle of proportionality i.e. it does not go beyond what 
is necessary to meet the objectives of the Treaties and in particular the smooth functioning of 
the single market. As with the subsidiarity test, it is not possible for Member States to address 
the issues without a proposal to amend the date of application of the Council Implementing 
Regulation. 

3 
4 
5 
6 
7 

http://www.consilium.europa.eu/en/press/press-releases/2016/05/25-conclusions-vat-action-plan/  
COM(2015) 192 final. 
COM(2015) 550 final. 
COM(2016) 179 final. 
OJ L 347, 11.12.2006, p. 1. 

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• 

Choice of the instrument 

This  proposal  amends  Council  Implementing  Regulation  (EU)  2019/2026.  The  only 
amendment made is the postponement of the date of application. 

3. 

• 

RESULTS 
CONSULTATIONS AND IMPACT ASSESSMENTS 

EX-POST 

EVALUATIONS, 

OF 

STAKEHOLDER 

Stakeholder consultations 

This proposal reflects the strong concerns some Member States, postal and courier operators 
have  expressed  and  addressed  to  the  Commission  not  to  be  able  to  finalise  the  preparatory 
works  of  the  VAT  e-commerce  package  at  national  level  to  apply  the  new  rules  by 
1 January 2021 due to the current COVID-19 crisis. 

The  Commission  held  a  meeting  with  Member  States  on  24 April 2020  to  assess  their 
readiness  to  apply  the  new  rules  as  of  1 January 2021.  The  majority  of  Member  States  still 
confirmed  to  be  ready  to  apply  them  on  time,  but  stressed  that  the  provisions  on  the 
functioning  of  the  VAT  e-commerce  package  are  based  on  the  principle  that  all  Member 
States should be in a position to apply them correctly and would therefore be ready to support 
a postponement not exceeding 6 months.  

• 

Impact assessment 

An impact assessment was carried out for the proposal which led to the adoption of the VAT 
e-commerce  Directive8  which  is  the  basis  for  the  implementing  rules  laid  down  in  the 
by 
Implementing 
Implementing Regulation (EU) 2019/2026.  The  current  proposal  only  amends  the  date  of 
application of these amendments due to the COVID-19 crisis. 

Regulation 

282/2011 

amended 

(EU) 

as 

• 

Regulatory fitness and simplification 

The main goal of this proposal is to postpone the date of application of the VAT e-commerce 
package by six months due to the outbreak of the COVID-19 crisis. 

The  proposal  does  not  change  the  substance  of  the  implementing  rules,  but  only  postpones 
their date of application. 

4. 

BUDGETARY IMPLICATIONS 

This  proposal  is  part  of  the  project  to  postpone  the  date  of  application  of  the  VAT  e-
commerce package.  

The budgetary implications of the already adopted VAT e-commerce package as a whole are 
set  out  in  detail  in  the  explanatory  memorandum  of  the  proposal  for  Council  Directive 
2017/2455, document COM(2016)757 final9. 

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COMMISSION  STAFF  WORKING  DOCUMENT  IMPACT  ASSESSMENT  Accompanying  the 
document  Proposals  for  a  Council  Directive,  a  Council  Implementing  Regulation  and  a  Council 
Regulation  on  Modernising  VAT  for  cross-border  B2C  e-Commerce,  https://eur-lex.europa.eu/legal-
content/EN/TXT/?uri=SWD:2016:0379:FIN 
Proposal for a COUNCIL DIRECTIVE amending Directive  2006/112/EC and Directive 2009/132/EC 
as regards certain value added tax obligations for supplies of services and distance sales of goods 
COM/2016/0757 
2016/0370 
- 
content/EN/TXT/?qid=1586260266830&uri=CELEX:52016PC0757 

https://eur-lex.europa.eu/legal-

(CNS), 

final 

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The  budgetary  losses  for  Member  States  have  been  estimated  at  around  EUR  5-7  billion 
yearly if the VAT e-commerce package is not implemented successfully. A delay of 6 months 
would therefore cause losses of around EUR 2.5-3.5 billion. However, if Member States and 
businesses are not ready to apply the new VAT e-commerce rules, the risk of the system not 
working properly could entail almost the same losses. 

5. 

• 

OTHER ELEMENTS 

Implementation plans and monitoring, evaluation and reporting arrangements 

Implementation will be overseen by the Standing Committee on Administrative Cooperation 
(SCAC),  supported  by  its  IT  subcommittee,  the  Standing  Committee  on  Information 
Technology (SCIT).  

• 

Detailed explanation of the specific provisions of the proposal 

of 

the 

VAT 

This  proposal  only  concerns  the  date  of  application  of  the  already  adopted  implementing 
in 
provisions 
Implementing Regulation (EU) 2019/2026.  The  date  of  application  of  these  new  rules 
originally  fixed  for  1 January 2021,  shall  be  postponed  by  six  months.  This  means  that  the 
provisions shall be applied as of 1 July 2021 instead of 1 January 2021. The registration of a 
taxable person to use one of the new schemes shall be possible three months before the date of 
application,  i.e.  as  of  1 April 2021.  The  current  mechanism  for  corrections  of  VAT  returns 
will continue to apply to VAT returns up to and including the second quarter of 2021. 

e-commerce 

package 

out 

set 

The  reason  for  this  proposal  is  the  outbreak  of  the  COVID-19  crisis,  which  puts  Member 
States  under  pressure  to  react  immediately  and  adopt  measures  urgently  at  national  level  to 
alleviate  its  consequences  for  businesses  and  the  population  in  general.  Due  to  these 
unprecedented, exceptional circumstances, several Member States cannot guarantee to finalise 
the  preparatory  work  to  apply  the  new  rules  of  the  VAT  e-commerce  package  as  of 
1 January 2021. 

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2020/0083 (NLE) 

Proposal for a 

COUNCIL IMPLEMENTING REGULATION  

amending Implementing Regulation (EU) 2019/2026 as regards the dates of application 
due to the outbreak of the COVID-19 crisis 

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 397 thereof, 

Having regard to the proposal from the European Commission, 

Whereas: 

(1) 

(2) 

(3) 

(4) 

1 
2 

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Council  Implementing  Regulation (EU) No 282/20112 lays down detailed provisions 
for the special schemes  for taxable persons supplying certain  services  to  non-taxable 
persons. 
Council  Implementing  Regulation  (EU)  2019/20263  amends  those  provisions  in  line 
with the extension of the scope of the existing special schemes and the introduction of 
a  new  scheme  in  the  framework  of  the  package  of  legislation  on  modernising  value 
added  tax  (VAT)  for  cross-border  business  to  consumer  (B2C)  e-commerce.  Those 
amendments are to be applied from 1 January 2021. 

On 30 January 2020, the World Health Organisation (WHO) declared the COVID-19 
outbreak  a  public  health  emergency  of  international  concern.  On  11 March 2020, 
WHO  declared  the  COVID-19  outbreak  a  pandemic.  COVID-19  has  provoked 
infections in all Member States. Due to the alarming increase in cases and the lack of 
efficient means immediately available to deal with the COVID-19 outbreak, numerous 
Member States have declared a national state of emergency.  

The  outbreak  of  the  COVID-19  crisis  constitutes  an  unexpected  and  unprecedented 
emergency that deeply affects all Member States and obliges them to take immediate 
action  at  national  level  to  deal  with  the  ongoing  crisis  as  a  priority  by  reallocating 
resources  to  other  issues.  Due  to  this  crisis,  several  Member  States  encounter 

OJ L 347, 11.12.2006, p. 1. 
Council  Implementing  Regulation  (EU)  No  282/2011  of  15  March  2011  laying  down  implementing 
measures for Directive 2006/112/EC on the common system of value added tax (OJ L 77, 23.3.2011, p. 
1). 

Council  Implementing  Regulation  (EU)  2019/2026  of  21  November  2019  amending  Implementing 
Regulation  (EU)  No  282/2011  as  regards  supplies  of  goods  or  services  facilitated  by  electronic 
interfaces  and  the  special  schemes  for  taxable  persons  supplying  services  to  non-taxable  persons, 
making distance sales of goods and certain domestic supplies of goods (OJ L 313, 4.12.2019, p. 14). 

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(5) 

difficulties in finalising the development of IT systems necessary for the application of 
the rules laid down in Implementing Regulation (EU) 2019/2026 and apply them as of 
1 January 2021.  Several  Member  States  as  well  as  postal  and  courier  operators  have 
therefore  asked  for  the  postponement  of  the  dates  of  application  of  Implementing 
Regulation (EU) 2019/2026.  

Taking  into consideration the challenges that Member States  are facing to tackle the 
COVID-19 crisis and the fact that the new provisions are based on the principle that 
all  Member  States  have  to  update  their  IT  systems  in  order  to  be  able  to  apply  the 
provisions laid down in Implementing Regulation (EU) 2019/2026, thus ensuring the 
collection and transmission of information and payments under the modified schemes, 
it is necessary to postpone the dates of application of this Regulation by six months. A 
postponement of six months is appropriate, because the delay should be kept as short 
as possible to minimise additional budgetary losses for Member States.  

(6) 

Implementing Regulation (EU) 2019/2026 should therefore be amended accordingly, 

HAS ADOPTED THIS REGULATION: 

Implementing Regulation (EU) 2019/2026 is amended as follows: 

Article 1 

(1) 

‘ 

1. 

in Article 1 point (5) replacing Section 2 of Chapter XI of Implementing Regulation 
(EU) No 282/2011, paragraph 1 of Article 61 is replaced by the following: 

Changes  to  the  figures  contained  in  a  VAT  return  relating  to  periods  up  to  and 
including  the  second  return  period  in  2021  shall,  after  the  submission  of  that  VAT 
return, be made only by means of amendments to that return and not by adjustments 
in a subsequent return. 

Changes to the figures contained in a VAT return relating to periods from the third 
return period in 2021 shall, after the submission of that VAT return, be made only by 
adjustments in a subsequent return.’; 

(2) 

in Article 2, the second and the third paragraphs are replaced by the following: 

‘It shall apply from 1 July 2021. 

However, Member States shall allow taxable persons and intermediaries acting on their behalf 
to  submit  the  information  required  under  Articles  360,  369c  or  369o  of  Directive 
2006/112/EC for registration under the special schemes as from 1 April 2021.’. 

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

Article 2 

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This Regulation shall be binding in its entirety and directly applicable in all Member States. 

Done at Brussels, 

For the Council 
The President 

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