Proposal for a COUNCIL DECISION amending Directives (EU) 2017/2455 and (EU) 2019/1995 as regards the dates of transposition and 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, broadcasting, electronic commerce, epidemic, goods and services, import (EU), infectious disease, national implementing measure, supply, telecommunications, third country

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   EUROPEAN COMMISSION  Brussels, 8.5.2020  COM(2020) 198 final 2020/0082 (CNS)  Proposal for a COUNCIL DECISION amending Directives (EU) 2017/2455 and (EU) 2019/1995 as regards the dates of transposition and 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  5 December 2017,  the  Council  adopted  Directive  (EU)  2017/24551  (“the  VAT  e-
commerce  Directive”)  amending  Directive  2006/112/EC2  (“the  VAT  Directive”)  and 
Directive 2009/132/EC3 as regards certain value added tax obligations for supplies of services 
and distance sales of goods. 
On 21 November 2019, the Council adopted Directive (EU) 2019/19954 (“the second VAT e-
commerce Directive”) amending the VAT Directive as regards provisions relating to distance 
sales of goods and certain domestic supplies of goods. 

The  date  of  application  of  the  major  part  of  this  comprehensive  package  of  legislation  on 
modernising  VAT  for  cross-border  B2C  e-commerce  (“VAT  e-commerce  package”)  was 
fixed to be 1 January 2021, allowing Member States sufficient time to adapt their legislation 
and IT systems.  

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,  including  a  timely  transposition  of  the  aforementioned  Directives  into 
national law. The IT system at national level required to implement the rules laid down in the 
VAT  e-commerce  Directives  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 

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4 

Council  Directive  (EU)  2017/2455  of  5 December  2017  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 (OJ L 348, 29.12.2017, p. 7). 
Council  Directive  2006/112/EC  of  28 November  2006  on  the  common  system  of  value  added  tax 
(OJ L 347, 11.12.2006, p. 1). 
Council Directive 2009/132/EC of 19 October 2009 determining the scope of Article 143(b) and (c) of 
Directive 2006/112/EC as regards exemption from value added tax on the final importation of certain 
goods (OJ L 292, 10.11.2009, p. 5).  
Council Directive (EU) 2019/1995 of 21 November 2019 amending Directive 2006/112/EC as regards 
provisions  relating  to  distance  sales  of  goods  and  certain  domestic  supplies  of  goods  (OJ  L  310, 
2.12.2019, p. 1–5¬) 

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States should be in a position to apply them correctly and would therefore be ready to support 
a postponement not exceeding 6 months.  

date 

Taking  into  account  the  above,  the  objective  of  this  proposal  is  to  postpone  the 
1 January 2021 
in 
Council Directive (EU) 2017/2455 and Council Directive (EU) 2019/1995 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. 

amendments 

application 

out 

the 

set 

of 

of 

• 

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 Council5.  

In addition to the VAT Action Plan, the VAT e-commerce package has been identified as a 
key  initiative  in  the  Digital  Single  Market  Strategy6  ('DSM  Strategy')  as  well  as  the  Single 
Market strategy7 and the E-Government Action Plan8.  

2. 

• 

LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY 

Legal basis 

The proposal is based on Article 113 of the Treaty on the Functioning of the European Union 
(TFEU).  This  article  provides  for  the  Council,  acting  unanimously  in  accordance  with  a 
special legislative procedure and after consulting the European Parliament and the European 
Economic and Social Committee, to adopt provisions for the harmonisation of Member States' 
rules in the area of indirect taxation. 

• 

Subsidiarity (for non-exclusive competence)  

This  proposal  postpones  the  1 January 2021  date  of  application  of  the  VAT  e-commerce 
Directives, which have been adopted by Council in December 2017 and November 2019 and 
have  to  be  transposed  into  national  law  by  31 December 2020  by  all  Member  States.  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  which  causes  some  of  them  difficulties  in  guaranteeing  a  timely 
implementation of the required changes in their domestic IT systems. 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. 

Given  that  VAT  is  a  tax  harmonised  at  EU  level,  Member  States  cannot  by  themselves  set 
different rules. Therefore, any initiative to amend the VAT rules for e-commerce, including a 
change of the date of application, requires a proposal by the Commission to amend the VAT 
Directive and cannot be achieved by unilateral actions at national level. 

The proposal is therefore consistent with the subsidiarity principle. 

5 
6 
7 
8 

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. 

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• 

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 dates of application of the VAT 
e-commerce Directives. 

• 

Choice of the instrument 

amends 

proposal 

and 
The 
Council Directive (EU) 2019/1995.  A  Council  Decision  has  been  chosen  for  this  purpose, 
because  the  only  amendment  made  is  the  postponement  of  the  dates  of  transposition  and 
application.  

2017/2455 

Directive 

Council 

(EU) 

3. 

• 

RESULTS 
CONSULTATIONS AND IMPACT ASSESSMENTS 

EX-POST 

EVALUATIONS, 

OF 

STAKEHOLDER 

Stakeholder consultations 

The Commission has been contacted by several Member States as well as postal and courrier 
operators stressing that it will be highly unlikely for them to be able to have their IT systems 
ready  and  operational  for  the  application  and  implementation  of  the  VAT  e-commerce 
package by 1 January 2021 due to the outbreak of 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.  

Impact assessment 

• 
An impact assessment was carried out for the proposal9 which led to the adoption of the VAT 
e-commerce  Directive.  The  current  proposal  only  amends  the  dates  of  application  of  the 
amendments  set  out  in  Directive  (EU)  2017/2455  and  Directive  (EU)  2019/1995  due  to  the 
outbreak of the COVID-19 crisis. 

• 

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  rules,  but  only  postpones  their  date  of 
application by six months. 

4. 

BUDGETARY IMPLICATIONS 

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

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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 

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The budgetary implications of the already adopted VAT e-commerce package as a whole are 
for 
the 
set  out 
Council Directive 2017/2455, document COM(2016)757 final10. 

explanatory  memorandum  of 

the  proposal 

in  detail 

in 

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 

This proposal only concerns the date of application of the already adopted legal framework of 
the VAT e-commerce package set out in the VAT Directive. The date of application shall be 
postponed by six months. This means that the rules shall be applied as of 1 July 2021 instead 
of  1 January 2021.  Consequently,  Member  States  shall  adopt  and  publish  their  transposition 
measures by 30 June 2021 instead of 31 December 2020. 

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  meet 
the deadline to transpose and implement the necessary rules of the VAT e-commerce package 
at national level by 1 January 2021. 

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EN 

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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2020/0082 (CNS) 

Proposal for a 

COUNCIL DECISION 

amending Directives (EU) 2017/2455 and (EU) 2019/1995 as regards the dates of 
transposition and 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,  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) 

Council  Directive  2006/112/EC3  as  amended  by  Council  Directive  (EU)  2017/24554 
and Council Directive (EU) 2019/19955 lays down the legal framework of the package 
of  legislation  on  modernising  value  added  tax  (VAT)  for  cross-border  business  to 
consumer (B2C) e-commerce. The majority of those new provisions are to be applied 
as 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 the number of 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.  

(3) 

The outbreak of the COVID-19 crisis constitutes an unprecedented and unpredictable 
emergency that deeply affects all Member States and obliges them to take immediate 
action  at  national  level  to  tackle  the  ongoing  crisis  as  a  priority  by  reallocating 

1 
2 
3 

4 

5 

OJ C , , p. . 
OJ C , , p. . 
Council  Directive  2006/112/EC  of  28 November  2006  on  the  common  system  of  value  added  tax 
(OJ L 347, 11.12.2006, p. 1). 
Council  Directive  (EU)  2017/2455  of  5  December  2017  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 (OJ L 348, 29.12.2017, p. 7). 
Council Directive (EU) 2019/1995 of 21 November 2019 amending Directive 2006/112/EC as regards 
provisions  relating  to  distance  sales  of  goods  and  certain  domestic  supplies  of  goods  (OJ  L  310, 
2.12.2019, p. 1). 

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(4) 

resources  to  other  issues.  Due  to  this  crisis,  several  Member  States  encounter 
difficulties in finalising the development of IT systems necessary for the application of 
the  rules  laid  down  in  Directives  (EU)  2017/2455  and  (EU)  2019/1995  by 
31 December 2020 and apply them as of 1 January 2021. Some Member States as well 
as postal and courier operators have therefore asked for the postponement of the dates 
of application of Directives (EU) 2017/2455 and (EU) 2019/1995.  

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  Directives (EU) 2017/2455  and  (EU)  2019/1995,  thus 
ensuring  the  collection  and  transmission  of  information  and  payments  under  the 
modified  schemes,  it  is  necessary  to  postpone  the  dates  of  transposition  and 
application  of  those  Directives  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. 

(5) 

Directives  (EU)  2017/2455  and  (EU)  2019/1995  should  therefore  be  amended 
accordingly, 

HAS ADOPTED THIS DECISION:  

Article 1  
Amendments to Directive (EU) 2017/2455 

Directive (EU) 2017/2455 is amended as follows: 

(1) 

(a) 

Article 2 is amended as follows: 

the heading is replaced by the following: 

 ‘Amendments to Directive 2006/112/EC with effect from 1 July 2021’; 

(b) 

the introductory sentence is replaced by the following: 

‘With effect from 1 July 2021, Directive 2006/112/EC is amended as follows:’; 

(2) 

Article 3 is replaced by the following: 

‘Article 3 
Amendment to Directive 2009/132/EC 

With effect from 1 July 2021, Title IV of Directive 2009/132/EC is deleted.’; 

(3) 

(a) 

in Article 4, paragraph 1 is amended as follows: 

the second subparagraph is replaced by the following: 

‘Member States shall adopt and publish, by 30 June 2021, the laws, regulations and 
administrative provisions necessary to comply with Articles 2 and 3 of this Directive. 

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They  shall  immediately  communicate  to  the  Commission  the  text  of  those 
provisions.’; 

(b) 

the fourth subparagraph is replaced by the following: 

‘They  shall  apply  the  measures  necessary  to  comply  with  Articles  2  and  3  of  this 
Directive from 1 July 2021.’; 

Article 2  
Amendments to Directive (EU) 2019/1995 

In  Article  2(1)  of  Directive  (EU)  2019/1995,  the  first  and  the  second  subparagraphs  are 
replaced by the following: 

‘Member  States  shall  adopt  and  publish,  by  30 June 2021  at  the  latest,  the  laws, 
regulations  and  administrative  provisions  necessary  to  comply  with  this  Directive. 
They shall forthwith communicate to the Commission the text of those provisions. 

They shall apply those measures from 1 July 2021.’ 

Article 3  
Entry into force 

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

Article 4  
Addressees 

This Decision is addressed to the Member States. 

Done at Brussels, 

For the Council 
The President 

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