Proposal for a COUNCIL IMPLEMENTING DECISION amending Implementing Decision (EU) 2017/2408 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
Date: 2020-07-09
Institutions: Directorate-General for Taxation and Customs Union, European Commission
Subjects: Latvia, VAT, derogation from EU law, small business, tax exemption

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   EUROPEAN COMMISSION  Brussels, 9.7.2020  COM(2020) 303 final 2020/0138 (NLE)  Proposal for a COUNCIL IMPLEMENTING DECISION amending Implementing Decision (EU) 2017/2408 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  
 
EXPLANATORY MEMORANDUM 

Pursuant  to  Article  395(1)  of  Council  Directive  2006/112/EC  of  28  November  2006  on  the 
common system of valued added tax1 (‘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 17 April 2020, Latvia requested an authorisation 
to continue to apply, until 31 December 2024, a measure derogating from Article 287 of the 
VAT Directive, allowing Latvia to exempt from VAT taxable persons whose annual turnover 
is no higher than EUR 40 000. 

In accordance with Article 395(2) of the VAT Directive, the Commission informed the other 
Member States by letter dated 19 May 2020 of the request made by Latvia. The Commission 
notified  Latvia  by  letter  dated  20  May  2020  that  it  had  all  the  information  necessary  to 
consider the request. 

1. 

• 

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 or she cannot deduct the VAT 
on his inputs. 

Under Article 287(10) of the VAT Directive, Latvia may exempt from VAT taxable persons 
whose annual turnover is no higher than the equivalent in national currency of EUR 17 200 at 
the conversion rate on the day of its accession. By virtue of Council Implementing Decision 
2010/584/EU2  Latvia  was  authorised  to  apply  a  higher  threshold  and  thus  to  exempt  from 
VAT taxable persons with an annual turnover not exceeding EUR 50 000. This measure was 
extended  by  Council  Implementing  Decision  2014/796/EU3  until  31  December  2017.  By 
Council  Implementing  Decision  (EU)  2017/24084,  Latvia  was  authorised  to  extend  the 
measure until 31 December 2020 and, at the same time, to decrease the exemption threshold 
from EUR 50 000 to EUR 40 000.  

According to the Latvian authorities, the measure facilitates VAT collection, enabling Latvia 
to simplify administrative procedures for small enterprises and thus reduce the administrative 
burden on them. Moreover, the measure also reduces the workload for the tax authorities. 

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OJ L 347, 11.12.2006, p.1. 
Council Implementing Decision 2010/584/EU of 27 September 2010 authorising the Republic of Latvia 
to apply a  measure derogating  from  Article 287 of Directive  2006/112/EC  on the common  system of 
value added tax (OJ L 256, 30.9.2010, p. 29). 
Council Implementing Decision 2014/796/EU of 7 November 2014 authorising the Republic of Latvia 
to apply a  measure derogating  from  Article 287 of Directive  2006/112/EC on the common  system of 
value added tax (OJ L 330, 15.11.2014, p. 46-47).  
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. 8-9). 

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Further, the Latvian authorities explain that in the last years they observed a reduction in the 
number of registered VAT payers, partly due to the faster removal of VAT payers from the 
VAT register as a result of measures adopted to combat VAT fraud, while the VAT revenue 
continued  to  increase  and  the  cost  incurred  by  the  Latvian  tax  administration  to  collect  one 
euro decreased. Those results, coupled with the fact that Latvia´s neighbouring countries have 
similar thresholds for the application of the special scheme for small enterprises (the threshold 
in Estonia is fixed at EUR 40 000 while the threshold in Lithuania is of EUR 45 000), advise 
to  maintain  the  threshold  at  the  current  level.  According  to  the  estimates  of  the  Latvian 
authorities,  lowering  the  threshold  further  will  not  have  a  major  positive  fiscal  impact  or 
increase the number of persons registered for VAT purposes, because, as actual data for 2018 
show,  the  impact  in  fiscal  terms  and  in  terms  of  the  number  of  enterprises  was  lower  than 
forecast. By contrast, increasing it, for example to EUR 50 000, would have a negative fiscal 
impact. 

The measure has an optional character. Therefore, small businesses whose turnover does not 
exceed the threshold will still have the possibility to exercise their right to apply the normal 
VAT arrangements. 

Derogations are normally granted for a limited period to allow an assessment of whether the 
derogating  measure  remains  appropriate  and  effective.  Moreover,  the  provisions  of  Articles 
281  to  294  of  the  VAT  Directive  on  the  special  scheme  for  small  enterprises  have  recently 
been  reviewed.  The  new  directive  laying  down  simpler  VAT  rules  for  small  enterprises5 
requires  that  Member  States  adopt  and  publish  the  laws,  regulations  and  administrative 
provisions, which are necessary to comply with the new rules, by 31 December 2024 at the 
latest. Member States will have to apply those national provisions from 1 January 2025. 

It  is  therefore  appropriate  to  authorise  Latvia  to  apply  the  derogating  measure  until  31 
December 2024.  

• 

Consistency with existing policy provisions in the policy area 

The derogating measure is in line with the philosophy of the new directive amending Articles 
281  to  294  of  the  VAT  Directive  on  a  special  scheme  for  small  enterprises,  which  resulted 
from  the  VAT  action  plan6,  and  aims  to  create  a  modern,  simplified  scheme  for  those 
businesses.  In  particular,  it  seeks  to  reduce  VAT  compliance  costs  and  distortions  of 
competition  both  domestically  and  at  EU  level,  reduce  the  negative  impact  of  the  threshold 
effect, and facilitate business compliance as well as monitoring by tax administrations. 

Moreover,  the  threshold  of  EUR  40  000  is  consistent  with  the  new  directive,  insofar  as  it 
allows  Member  States  to  set  the  annual  turnover  threshold  required  for  an  exemption  from 
VAT at a level no higher than EUR 85 000 (or the equivalent in national currency). 

Similar derogations, exempting from VAT taxable persons whose annual turnover is below a 
certain  threshold,  as  provided for in  Articles 285 and 287 of the VAT  Directive, have been 

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Council  Directive  (EU)  2020/285  of  18  February  2020  amending  Directive  2006/112/EC  on  the 
common system of value added tax as regards the special scheme for small enterprises and Regulation 
(EU)  No  904/2010  as  regards  the  administrative  cooperation  and  exchange  of  information  for  the 
purpose  of  monitoring  the  correct  application  of  the  special  scheme  for  small  enterprises  (OJ  L  62, 
2.3.2020, p.13). 
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 COM(2016)148 final. 

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granted  to  other  Member  States.  Malta7  has  been  granted  a  threshold  of  EUR  20  000;  the 
Netherlands8 a threshold of EUR 25 000; Italy9 a threshold of EUR 30 000; Luxembourg10 a 
threshold of EUR 35 000; Poland11 and Estonia12 have been granted a threshold of EUR 40 
000; Croatia13 and Lithuania14 a threshold of EUR 45 000; Hungary15 a threshold of EUR 48 
000; Slovenia16 a threshold of EUR 50 000; and Romania17 a threshold of EUR 88 500. 

As already mentioned, derogations from the VAT Directive should always be limited in time 
so that their effects  can be assessed. The inclusion of an expiry date of the special measure 
until 31 December 2024, as requested by Latvia, is aligned with the requirements of the new 
directive  on  simpler  VAT  rules  for  small  and  medium-sized  enterprises.  That  directive 
provides  for  1  January  2025  as  the  date  on  which  Member  States  will  have  to  apply  the 
national provisions, which they are required to adopt to comply with it. 

The proposed measure is therefore consistent with the provisions of the VAT Directive. 

• 

Consistency with other Union policies 

The  Commission  has  been  consistently  stressing  the  need  for  simpler  rules  for  small 
enterprises  in  its  annual  work  programmes.  In  this  regard,  the  2020  Commission  Work 

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Council  Implementing  Decision  (EU)  2018/279  of  20  February  2018  authorising  Malta  to  apply  a 
special measure derogating from Article 287 of Directive 2006/112/EC on the common system of value 
added tax (OJ L 54, 24.2.2018, p. 14). 
Council  Implementing  Decision  (EU)  2018/1904  of  4  December  2018  authorising  the  Netherlands  to 
introduce  a  special  measure  derogating  from  Article  285  of  Directive  2006/112/EC  on  the  common 
system of value added tax (OJ L 310, 6.12.2018, p. 25). 
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.11-12). 
Council  Implementing  Decision  (EU)  2019/2210  of  19  December  2019  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  332,  23.12.2019,  p. 
155). 
Council Implementing Decision (EU) 2018/1919 of 4 December 2018 amending Decision 2009/790/EC 
authorising  the  Republic  of  Poland  to  apply  a  measure  derogating  from  Article  287  of  Directive 
2006/112/EC on the common system of value added tax (OJ L 311, 7.12.2018, p. 32). 
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)  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) 2017/1853 of 10 October 2017 amending Implementing Decision 
2011/335/EU authorising the Republic of Lithuania to apply a 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. 15). 
Council Implementing Decision (EU) 2018/1490 of 2 October 2018 authorising Hungary to introduce a 
special measure derogating from Article 287 of Directive 2006/112/EC on the common system of value 
added tax (OJ L 252, 8.10.2018, p.38). 
Council  Implementing  Decision  (EU)  2018/1700  of  6  November  2018  amending  Implementing 
Decision  2013/54/EU  authorising  the  Republic  of  Slovenia  to  introduce  a  special  measure  derogating 
from  Article  287  of  Directive  2006/112/EC  on  the  common  system  of  value  added  tax  (OJ  L  285, 
13.11.2018, p. 78). 
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) 

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Programme18  refers  to  “a  dedicated  SME  Strategy  that  will  make  it  easier  for  small  and 
medium-sized businesses to operate, scale up and expand”. The derogating measure is in line 
with such objectives, as far as fiscal rules are concerned. It is notably consistent with the 2017 
Commission  Work  Programme19,  which  referred  specifically  to  VAT,  pointing  out  that  the 
administrative  burden  of  VAT  compliance  for  small  businesses  is  high  and  that  technical 
innovations pose new challenges for effective tax collection, and stressed the need to simplify 
VAT for smaller companies. 

Likewise,  the  measure  is  consistent  with  the  2015  single  market  strategy20,  where  the 
Commission set out to help small and medium-sized businesses grow, inter alia by reducing 
the administrative burdens that prevent them from taking full advantage of the single market. 
It  also  follows  the  philosophy  of  the  2013  Commission  Communication  ‘Entrepreneurship 
2020  Action  Plan:  Reigniting  the  entrepreneurial  spirit  in  Europe’21,  which  underlined  the 
need to simplify tax legislation for small businesses. 

Finally, the measure is in line with EU policies on small and medium-sized enterprises, as set 
out  in  the  2016  Start-Up  Communication22,  and  the  2008  Communication  ‘”Thinks  small 
first”  –  a  “Small  Business  Act”  for  Europe’23  which  called  on  the  Member  States  to  take 
account of the special features of SMEs when designing legislation and 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 it is based, the proposal falls under 
the exclusive competence of the European Union. Hence, 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. 

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Communication  from  the  Commission  to  the  European  Parliament,  the  Council,  the  European 
Economic and Social Committee and the Committee of the Regions  – Commission Work Programme 
2020 – A Union that strives for more (COM(2020) 37 final). 
Communication  from  the  Commission  to  the  European  Parliament,  the  Council,  the  European 
Economic and Social Committee and the Committee of the Regions  – Commission Work Programme 
2017 (COM(2016) 710 final). 
Communication  from  the  Commission  to  the  European  Parliament,  the  Council,  the  European 
Economic and Social Committee and the Committee of the Regions upgrading the Single Market: more 
opportunities for people and businesses (COM(2015) 550 final). 
Communication  from  the  Commission  to  the  European  Parliament,  the  Council,  the  European 
Economic  and  Social  Committee  and  the  Committee  of  the  Regions  –  Entrepreneurship  2020  Action 
Plan: Reigniting the entrepreneurial spirit in Europe (COM(2012) 795 final). 
Communication  from  the  Commission  to  the  European  Parliament,  the  Council,  the  European 
Economic  and  Social  Committee  and  the  Committee  of  the  Regions  –  Europe’s  Next  Leaders:  The 
Start-Up and Scale-Up Initiative (COM(2016) 733 final). 
Communication  from  the  Commission  to  the  European  Parliament,  the  Council,  the  European 
Economic  and  Social  Committee  and  the  Committee  of  the  Regions  ‘Think  Small  First’  A  ‘Small 
Business Act’ for Europe (COM(2008) 394 final). 

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

• 

Choice of the instrument 

The instrument proposed is a Council Implementing Decision. 

Under Article 395 of the VAT Directive, a derogation from the common VAT rules is only 
possible upon authorisation by the Council, which is 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 

No stakeholder consultation has been conducted. The present proposal is based on a request 
made by Latvia and concerns only this particular Member State. 

• 

Collection and use of expertise 

There was no need for external expertise. 

• 

Impact assessment 

The  proposal  for  a  Council  Implementing  Decision  authorises  Latvia  to  continue  to  exempt 
from  VAT  taxable  persons  whose  annual  turnover  does  not  exceed  EUR 40 000.  Persons 
whose  taxable  turnover  does  not  exceed  the  threshold  do  not  have  to  register  for  VAT 
purposes, and thus the administrative burden on them will reduce as a result of the measure, 
since  they  will  not  need  to  keep  VAT  records  or  submit  a  VAT  return.  Subsequently,  the 
measure  will  have  a  potential  positive  impact  on  the  tax  administration  as  it  will  reduce  its 
administrative burden. 

According  to  the  Latvian  authorities,  the  lowering  of  the  VAT  registration  threshold  from 
EUR  50  000  to  EUR  40  000  was  forecast  to  generate  an  extra  EUR  5.9  million  of  VAT 
revenue for the State budget and create an additional 3 426 new persons registering for VAT 
purposes per year. In order to determine the actual fiscal impact, account was taken of persons 
registered for VAT purposes whose total value of transactions for the 2018 VAT return was 
between  EUR  40  000  and  EUR  50  000  and  who  were  not  registered  for  VAT  purposes  in 
2017.  The  fiscal  impact  is  assumed  to  be  the  total  amount  of  VAT  declared  by  persons 
registered for VAT purposes, which in 2018 was EUR 2.8 million. The number of this type of 
registered VAT payer is 2 636, which can be taken to be the increase in the number of VAT 
payers created by this measure. Data from VAT returns for 2019 show that persons registered 
for  VAT 
in 
VAT returns of between EUR 40  000 and  EUR  50  000,  generated  EUR  10.7  million  of 
revenue  for  the  State  budget,  compared  with  the  EUR  5.8  million  generated  in  2018.  The 
Latvian  authorities  therefore  conclude  that  the  fiscal  impact  on  the  State  budget  from  this 
measure is positive, although slightly lower than previously forecasted. 

purposes  with 

transactions 

declared 

value 

total 

of 

a 

In  the  view  of  the  Latvian  authorities,  lowering  the  threshold  further  will  not  have  a  major 
positive  fiscal  impact  or  increase  the  number  of  persons  registered  for  VAT  purposes, 
because, as actual data for 2018 show, the impact in fiscal terms and in terms of the number 

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of enterprises was lower than forecast. By contrast, increasing it, for example to EUR 50 000, 
would have a negative fiscal impact. 

The derogating measure will be optional for taxable persons. Taxable persons will be able to 
opt  for  the  regular  VAT  arrangements  in  accordance  with  Article  290  of  Directive 
2006/112/EC. 

• 

Fundamental rights 

The proposal does not have any consequences for the protection of fundamental rights. 

4. 

BUDGETARY IMPLICATIONS 

The proposal will not have a negative impact on the EU budget because Latvia will carry out 
a  compensation  calculation  in  accordance  with  Article  6  of  Council  Regulation  (EEC, 
EURATOM) 1553/89. 

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2020/0138 (NLE) 

Proposal for a 

COUNCIL IMPLEMENTING DECISION 

amending Implementing Decision (EU) 2017/2408 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 

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), first subparagraph thereof, 

Having regard to the proposal from the European Commission, 

Whereas: 

(1) 

(2) 

(3) 

(4) 

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Pursuant  to  point  (10)  of  Article  287  of  Directive  2006/112/EC,  Latvia  may  exempt 
taxable  persons  whose  annual  turnover  is  no  higher  than  the  equivalent  in  national 
currency of EUR 17 200 from value added tax (‘VAT’) at the conversion rate on the 
day of its accession.  
By Council Implementing Decision 2010/584/EU2 Latvia was authorised to introduce 
a  special  measure  derogating  from  Article  287  of  Directive  2006/112/EC  (‘the 
derogating measure’) to exempt taxable persons whose annual turnover was no higher 
than  EUR  50  000  from  VAT  until  31  December  2013.  The  derogating  measure  was 
extended by Council Implementing Decision 2014/796/EU3 until 31 December 2017.  
By  Council  Implementing  Decision  (EU)  2017/24084,  Latvia  was  both  authorised  to 
further  extend  the  derogating  measure  until  31  December  2020,  and  to  decrease  the 
exemption threshold from EUR 50 000 to EUR 40 000. 

By  letter  registered  with  the  Commission  on  17  April  2020,  Latvia  requested 
authorisation  to  continue  to  apply  the  derogating  measure  until  31  December  2024, 
being  the  date  by  which  Member  States  are  to  transpose  Council  Directive  (EU) 
2020/2855, which lays down simpler VAT rules for small enterprises. That Directive 

OJ L 347, 11.12.2006, p. 1. 
Council Implementing Decision 2010/584/EU of 27 September 2010 authorising the Republic of Latvia 
to apply a  measure derogating  from  Article 287 of Directive  2006/112/EC on the common  system of 
value added tax (OJ L 256, 30.9.2010, p. 29). 
Council Implementing Decision 2014/796/EU of 7 November 2014 authorising the  Republic of Latvia 
to apply a  measure derogating  from  Article 287 of Directive  2006/112/EC on the common  system of 
value added tax (OJ L 330, 15.11.2014, p. 46).  
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  Directive  (EU)  2020/285  of  18  February  2020  amending  Directive  2006/112/EC  on  the 
common system of value added tax as regards the special scheme for small enterprises and Regulation 
(EU)  No  904/2010  as  regards  the  administrative  cooperation  and  exchange  of  information  for  the 

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also  lays  down  the  maximum  threshold  allowing  Member  States  to  exempt  taxable 
persons  whose  Member  State  annual  turnover  does  not  exceed  EUR  85 000  or  the 
equivalent in national currency. 

By  letter  dated  19  May  2020,  the  Commission  informed  the  other  Member  States, 
pursuant  to  Article  395(2)  of  Directive  2006/112/EC,  second  subparagraph,  of  the 
request made by Latvia. By letter dated 20 May 2020, the Commission notified Latvia 
that it had all the information necessary to consider the request. 

The  derogating  measure  is  in  line  with  Directive  (EU)  2020/285,  which  seeks  to 
reduce VAT compliance costs of small enterprises and distortions of competition both 
at  national  and  Union  level,  and  to  reduce  the  negative  impact  of  transition  from 
exemption  to  taxation  (the  so-called  threshold  effect).  It  also  seeks  to  facilitate 
business compliance by small enterprises as well as monitoring by tax administrations. 
The threshold of EUR 40 000 is consistent with Article 284 of Directive 2006/112/EC, 
as amended by Directive (EU) 2020/285. 

The  derogating  measure  will  remain  optional  for  taxable  persons.  Taxable  persons 
may  still  opt  for  the  normal  VAT  arrangements  in  accordance  with  Article  290  of 
Directive 2006/112/EC. 

According  to  the  information  provided  by  Latvia,  the  derogating  measure  will  only 
have a negligible effect on the overall amount of the tax revenue of Latvia collected at 
the stage of final consumption. 

The derogating measure will not adversely affect the Union’s own resources accruing 
from  VAT  because  Latvia  will  carry  out  a  compensation  calculation  in  accordance 
with Article 6 of Council Regulation (EEC, Euratom) No 1553/896. 

(5) 

(6) 

(7) 

(8) 

(9) 

(10)  Given  the  potential  positive  impact  of  the  derogating  measure  in  reducing  the 
administrative  burden  and  compliance  costs  for  small  enterprises  and  for  the  tax 
authorities,  and  the  lack  of  any  major  impact  on  the  total  VAT  revenue  generated, 
Latvia should be authorised to continue applying the derogating measure. 

(11)  The authorisation to apply the derogating measure should be limited in time. The time 
limit  should  be  sufficient  to  allow  the  effectiveness  and  appropriateness  of  the 
threshold to be evaluated. Moreover, according to Directive (EU) 2020/285, Member 
States  are  to  adopt  and  publish,  by  31  December  2024,  the  laws,  regulations  and 
administrative  provisions  necessary  to  comply  with  Article  1  of  that  Directive,  and 
apply  those  provisions  from  1  January  2025.  It  is  therefore  appropriate  to  authorise 
Latvia to apply the derogating measure until 31 December 2024. 

(12) 

Implementing Decision (EU) 2017/2408 should therefore be amended accordingly, 

HAS ADOPTED THIS DECISION:  

In Article 2 of Implementing Decision (EU) 2017/2408, the second paragraph is replaced by 
the following: 

Article 1 

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purpose  of  monitoring  the  correct  application  of  the  special  scheme  for  small  enterprises  (OJ  L  62, 
2.3.2020, p. 13). 
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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‘This Decision shall apply until 31 December 2024.’. 

This Decision is addressed to the Republic of Latvia. 

Done at Brussels, 

Article 2 

For the Council 
The President 

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