Proposal for a COUNCIL IMPLEMENTING DECISION amending Implementing Decision 2013/680/EU authorising the Kingdom of Denmark and the Kingdom of Sweden to extend the application of a special measure derogating from Articles 168, 169, 170 and 171 of Directive 2006/112/EC on the common system of value added tax
Date: 2020-07-20
Institutions: Directorate-General for Taxation and Customs Union, European Commission
Subjects: Denmark, Sweden, VAT, bridge, derogation from EU law, internal border of the EU, tax relief, taxpayer, toll

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   EUROPEAN COMMISSION  Brussels, 20.7.2020  COM(2020) 328 final 2020/0147 (NLE)  Proposal for a COUNCIL IMPLEMENTING DECISION amending Implementing Decision 2013/680/EU authorising the Kingdom of Denmark and the Kingdom of Sweden to extend the application of a special measure derogating from Articles 168, 169, 170 and 171 of Directive 2006/112/EC on the common system of value added tax  
 
EXPLANATORY MEMORANDUM 

1. 

CONTEXT OF THE PROPOSAL 

Grounds for and objectives of the proposal 

Pursuant to Article 395(1) of Directive 2006/112/EC of  28 November 2006 on the common 
system of value added tax1 (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  that Directive in order to  simplify the procedure  for  charging 
the tax or to prevent certain types of tax evasion or avoidance. 

Denmark  and  Sweden  requested  an  extension  to  their  existing  derogation  firstly  granted  by 
Decision  2000/91/EC2  and  extended  by  Decisions  2003/65/EC3,  2007/132/EC4  and 
2013/680/EU5 . In accordance with Article 395(2) of the VAT Directive, the Commission, in 
a letter dated 2 April 2020, informed the other Member States of the request by Denmark and 
Sweden. By letter dated 3 April 2020, the Commission notified Denmark and Sweden that it 
had all the information it considered necessary for the appraisal of the request. 

General context 

Denmark  and  Sweden  have  jointly  introduced  simplified  rules  on  the  recovery  of  VAT  in 
connection  with  tolls  on  the  Öresund  fixed  link  between  Denmark  and  Sweden.  This  was 
deemed necessary as the normal VAT rules would create excessive paperwork for taxpayers 
and administrations alike. 

Under  the  normal  VAT  rules  as  contained  in  Articles  168,  169,  170  and  171  of  the  VAT 
Directive, VAT must be deducted in or refunded by the Member State in which it was due or 
paid. As the Öresund fixed link is located partly in the territory of Denmark and partly in the 
territory of Sweden the VAT paid on the toll charge for using the link would be recoverable 
from  either  of  these  countries  to  the  extent  that  the  charge  relates  to  their  territory. 
Specifically 50% would be recoverable from Denmark and 50% from Sweden. 

In  practice  this  would  mean  that  taxable  persons  established  in  either  Denmark  or  Sweden 
would only be able to recover 50% of the VAT on their periodic VAT returns in the Member 
State of registration. The remaining 50% would have to be claimed back as a refund from the 
other Member State via Directive 2008/9/EC6. Also, taxable persons established in  Member 

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OJ L 347, 11.12.2006, p. 1. 
Council  Decision  of  24  January  2000  authorising  the  Kingdom  of  Denmark  and  the  Kingdom  of 
Sweden to apply a measure derogating from Article 17 of the Sixth Council Directive (77/338/EEC) on 
the  harmonisation  of  the  laws  of  the  Member  States  relating  to  turnover  taxes  (OJ  L  28,  3.2.2000, p. 
38). 
Council Decision of 21 January 2003 extending the application of Decision 2000/91/EC authorising the 
Kingdom of Denmark and the Kingdom of Sweden to apply a measure derogating from Article 17 of 
the Sixth Council Directive 77/388/EEC on the harmonisation of the laws of the Member States relating 
to turnover taxes (OJ L 25, 30.1.2003, p. 40). 
Council Decision of 30 January 2007 extending the application of Decision 2000/91/EC authorising the 
Kingdom of Denmark and the Kingdom of Sweden to apply a measure derogating from Article 17 of 
the  Sixth  Council  Directive  (77/388/EEC)  on  the  harmonisation  of  the  laws  of  the  Member  States 
relating to turnover taxes (OJ L 57, 24.2.2007, p. 10). 
Council  Implementing  Decision  of  15  November  2013  authorising  the  Kingdom  of  Denmark  and  the 
Kingdom of Sweden to extend the application of a special measure derogating from Articles 168, 169, 
170  and  171  of  Directive  2006/112/EC  on  the  common  system  of  value  added  tax  (OJ  L  316, 
27.11.2013, p. 39–40). 
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 (OJ L 44, 20.2.2008, p. 23). 

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States other than Denmark and Sweden would be required to recover VAT via two separate 
refund  claims  under  Directive  2008/9/EC,  one  submitted  to  Denmark  and  the  other  to 
Sweden. Likewise, taxable persons established outside the territory of the Union would under 
Directive 86/560/EEC7 need to send refund claims both to Denmark and to Sweden. 

The  existing  derogation  for  Denmark  and  Sweden  simplifies  the  VAT  rules  concerning  the 
recovery of VAT. In effect, under that derogation, they allow a single claim for the recovery 
of VAT in relation to the toll. The simplified rules applied are as follows: 

Taxable persons  established in  Denmark and Sweden are  entitled to  deduct,  on their 
– 
domestic  VAT  return,  the  full  amount  of  deductible  VAT  on  the  tolls  including  that  part 
relating  to  the  use  of  the  link  in  the  territory  of  the  Member  State  in  which  they  are  not 
established. 

To  recover  VAT  deductible  under  the  procedure  laid  down  in  Directive  2008/9/EC 
– 
regarding  taxable  persons  established  in  a  Member  State  other  than  Denmark  or  Sweden  or 
under  the  procedure  laid  down  in  Directive  86/560/EEC  for  taxable  persons  established 
outside of the Member States, the application should be made to the Swedish authorities only. 

Denmark and Sweden request that these existing simplification rules be extended for a further 
period.  

According  to  the  statistical  information  provided  by  Sweden,  the  derogation  created  for  the 
taxable persons provides a significant simplification of the VAT recovery of the Öresund link 
tolls,  and  has  proven  successful.  It  is  also  the  Commission's  view  that  this  type  of  cross-
border deduction is a model of simplification of business obligations that could be extended 
through a generalised One Stop Shop in the long term. 

The Commission therefore considers that a further extension is appropriate.  

Existing provisions in the area of the proposal 

An existing derogation granted to Denmark and Sweden on 24 January 2000 and extended on 
21 January 2003, on 30 January 2007 and on 13 November 2013. 

Consistency with other policies and objectives of the Union 

Not applicable. 

2. 

RESULTS OF CONSULTATIONS WITH THE INTERESTED PARTIES AND 
IMPACT ASSESSMENTS 

Consultation of interested parties 

Not relevant. 

Collection and use of expertise 

There was no need for external expertise. 

Impact assessment 

The  proposed  Decision  aims  at  simplifying  the  procedure  for  recovery  of  VAT  on  tolls  for 
taxable  persons  using  the  Öresund  fixed  link  between  Denmark  and  Sweden  and  therefore 
potentially has a positive economic impact. 

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Council Directive 86/560/EEC of 17 November 1986 on the harmonization of the laws of the Member 
States relating to turnover taxes - Arrangements for the refund of value added tax to taxable persons not 
established in Community territory (OJ L 326, 21.11.1986, p. 40-41). 

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The impact will in any case be limited because of the narrow scope of the derogation. 

3. 

LEGAL ELEMENTS OF THE PROPOSAL 

Summary of the proposed action 

Authorisation  for  Denmark  and  Sweden  to  apply  a  measure  derogating  from  Articles  168, 
169, 170 and 171 of the VAT Directive as regards the right of deduction for taxable persons. 

Legal basis 

Article 395 of Directive 2006/112/EC of 28 November 2006 on the common system of value 
added tax. 

Subsidiarity principle 

The  proposal  falls  under  the  exclusive  competence  of  the  Union.  The  subsidiarity  principle 
therefore does not apply. 

Proportionality principle 

The proposal complies with the proportionality principle for the following reasons: 

This Decision concerns an authorisation granted to two Member States upon their own request 
and does not constitute any obligation. 

Given  the  limited  scope  of  the  derogation,  the  special  measure  is  proportionate  to  the  aim 
pursued. 

Choice of instruments 

Proposed instruments: other. 

Other means would not be adequate for the following reasons: 

Under  Article  395  of  the  Directive  2006/112/EC  of  28  November  2006  on  the  common 
system  of value  added tax, derogation from  the  common VAT rules is  only possible on the 
authority of the Council acting unanimously on a proposal from the Commission. A Council 
Implementing  Decision  is  the  only  suitable  instrument  since  it  can  be  addressed  to  an 
individual Member State. 

4. 

BUDGETARY IMPLICATION  

The proposal has no implication for the Union's budget. 

5. 

OPTIONAL ELEMENTS  

Review/revision/sunset clause 

The proposal includes a sunset clause. 

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2020/0147 (NLE) 

Proposal for a 

COUNCIL IMPLEMENTING DECISION 

amending Implementing Decision 2013/680/EU authorising the Kingdom of Denmark 
and the Kingdom of Sweden to extend the application of a special measure derogating 
from Articles 168, 169, 170 and 171 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 tax8 , and in particular Article 395(1) thereof, 

Having regard to the proposal from the European Commission, 

Whereas: 

(1) 

(2) 

(3) 

(4) 

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By letters registered with the Commission on 20 February 2020 Denmark and Sweden 
requested authorisation to extend the application of a special measure derogating from 
Articles 168, 169, 170 and 171 of Directive 2006/112/EC requiring taxable persons to 
exercise  their  right  to  deduct  or  obtain  a  refund  of  value  added  tax  (VAT)  in  the 
Member State where it was paid.  

In accordance with Article 395(2), the second subparagraph, of Directive 2006/112/EC 
the Commission informed the other Member States by letter dated 2 April 2020 of the 
requests made by Denmark and Sweden. By letter dated 3 April 2020, the Commission 
notified Denmark and Sweden that it had all the information  it considered necessary 
for appraisal of the requests. 

The requests for derogation relate to the recovery of VAT paid on tolls for the use of 
the  Öresund  fixed  link  between  Denmark  and  Sweden.  Under  the  VAT  rules  on  the 
place of supply of services connected with  immovable property, part of the VAT on 
tolls for the Öresund fixed link is payable to Denmark and part to Sweden. 
By  Council  Decision  2000/91/EC9,  by  way  of  derogation  from  the  requirement  for 
taxable  persons  to  exercise  their  right  to  deduct  or  obtain  a  refund  of  VAT  in  the 
Member  State  where  it  was  paid,  Denmark  and  Sweden  were  authorised  to  apply  a 
special measure enabling taxpayers to recover VAT from a single administration until 
31 December 2002. The authorisation to apply that special measure was subsequently   
extended by Council Decision 2003/65/EC10 until 31 December 2006 and by Council 

OJ L 347, 11.12.2006, p. 1. 
Council  Decision  2000/91/EC  of  24  January  2000  authorising  the  Kingdom  of  Denmark  and  the 
Kingdom  of  Sweden  to  apply  a  measure  derogating  from  Article  17  of  the  Sixth  Council  Directive 
(77/338/EEC) on the harmonisation of the laws of the Member States relating to turnover taxes (OJ L 
28, 3.2.2000, p. 38). 
Council  Decision  2003/65/EC  of  21  January  2003  extending  the  application  of  Decision  2000/91/EC 
authorising the Kingdom of Denmark and the Kingdom of Sweden to apply a measure derogating from 

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Decision 2007/132/EC11 until 31 December 2013. By Council Implementing Decision 
2013/680/EU12  Denmark  and  Sweden  were  authorised  to  apply  special  measure 
derogating  from  Articles  168,  169,  170  and  171  of  Directive  2006/112/EC  from  1 
January 2014 until 31 December 2020. 

The  legal  and  factual  situation  which  justified  that  derogation  has  not  changed  and 
continues to  exist.  Denmark and Sweden should therefore be authorised to apply the 
special measure during a further limited period.  

The  derogation  has  no  negative  effect  on  the  Union's  own  resources  accruing  from 
VAT. 

(5) 

(6) 

(7) 

Implementing Decision 2013/680/EU should therefore be amended accordingly, 

HAS ADOPTED THIS DECISION:  

In  Article  2  of  Implementing  Decision  2013/680/EU,  the  date  "31  December  2020"  is 
replaced by “31 December 2027”. 

Article 1 

This Decision is addressed to the Kingdom of Denmark and to the Kingdom of Sweden. 

Done at Brussels, 

Article 2 

For the Council 
The President 

Article 17 of the Sixth Council Directive 77/388/EEC on the harmonisation of the laws of the Member 
States relating to turnover taxes (OJ L 25, 30.1.2003, p. 40). 

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Council Decision 2007/132/EC of 30 January 2007 extending the application of Decision 2000/91/EC 
authorising the Kingdom of Denmark and the Kingdom of Sweden to apply a measure derogating from 
Article 17 of the Sixth Council Directive (77/388/EEC) on the harmonisation of the laws of the Member 
States relating to turnover taxes (OJ L 57, 24.2.2007, p. 10). 
Council  Implementing  Decision  2013/680/EU  of  15  November  2013  authorising  the  Kingdom  of 
Denmark and the Kingdom of Sweden to extend the application of a special measure derogating from 
Articles 168, 169, 170 and 171 of Directive  2006/112/EC on the common system of value added tax 
(OJ L 316, 27.11.2013, p. 39). 

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