Proposal for a COUNCIL DIRECTIVE amending Directive 2006/112/EC as regards conferral of implementing powers to the Commission to determine the meaning of the terms used in certain provisions of that Directive
Date: 2020-12-18
Institutions: Directorate-General for Taxation and Customs Union, European Commission
Subjects: European Commission, VAT, powers of the institutions (EU), tax collection, tax harmonisation, tax law, transfer of competence

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   EUROPEAN COMMISSION  Brussels, 18.12.2020  COM(2020) 749 final 2020/0331 (CNS)  Proposal for a COUNCIL DIRECTIVE amending Directive 2006/112/EC as regards conferral of implementing powers to the Commission to determine the meaning of the terms used in certain provisions of that Directive  
 
EXPLANATORY MEMORANDUM 

1. 

CONTEXT OF THE PROPOSAL 

Reasons for and objectives of the proposal 

• 
The  Commission  has  currently  no  implementing  powers  in  respect  of  the  VAT  Directive1. 
The  only  existing  tool  for  the  Commission  to  promote  the  uniform  application  of  EU  VAT 
rules  is  an  advisory  Committee  set  up  under  Article 398  of  the  VAT  Directive,  the  ‘VAT 
Committee’. 

The  VAT  Committee  consists  of  representatives  of  the  Member  States  and  of  the 
Commission,  and  examines  questions  concerning  the  application  of  EU  VAT  provisions 
raised by the Commission or a Member State. Because it is an advisory committee, the VAT 
Committee  can  currently  only  agree  non-binding  guidelines  on  the  application  of  the  VAT 
Directive,  whereas  binding  implementing  measures  may  only  be  adopted  by  the  Council 
based on a Commission proposal (Article 397 of the VAT Directive). 

Experience shows that these guidelines do not always ensure uniform application of the EU 
VAT  legislation.  For  instance,  the  VAT  Committee  has  recently  failed  to  reach  unanimous 
guidelines  on  a  number  of  issues  related  to  the  practical  application  of  the  provisions  of 
Council Directive (EU) 2018/1910 (the “Quick Fixes” Directive)2. As a consequence Member 
States follow different approaches on issues such as: 

– 

– 

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whether a warehouse is a fixed establishment of a taxable person or otherwise (where 
the warehouse to which the goods are transported in the framework of call-off stock 
arrangements is owned or rented by the taxable person transferring the goods),  

what qualifies as “small losses”, or the treatment to be given to such small losses for 
the purposes of call-off stock arrangements; 

the meaning of the terms “supplier… who dispatches or transports the goods either 
himself  or  through  a  third  party  acting  on  his  behalf”  (Article 36a(3)  of  the  VAT 
Directive). 

The VAT Committee has also recently failed to reach a unanimous guideline: 

– 

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on how the location of a service consisting of an event which takes place in several 
Member States should be identified for VAT purposes; 

on  whether  a  supply  of  goods  or  services  between  a  head  office  of  a  company 
established  in  a  Member  State  and  a  VAT  group  in  another  Member  State  which 
includes  a  branch  of  that  same  company  constitutes  a  taxable  transaction  for  VAT 
purposes.   

Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax (OJ 
L 347 of 11.12.2006). 
Council  Directive  (EU)  2018/1910  of  4  December  2018  amending  Directive  2006/112/EC  as  regards 
the harmonisation and simplification of certain rules in the value added tax system for the taxation of 
trade between Member States (OJ L 311 of 7.12.2018, p. 3-7). 

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These  discrepancies  are  likely  to  result  in  instances  of  double  taxation  and  will  entail  legal 
uncertainty  and  additional  costs  for  businesses,  which  usually  only  come  to  an  end,  after  a 
considerable  time,  with  a  ruling  of  the  Court  of  Justice  of  the  European  Union  (CJEU), 
sometimes  leading  to  an  interpretation  which  was  not  previously  shared  by  the  majority  of 
Member States (such as for example on the application of “cost sharing rules”)3. It might even 
happen that the ruling of the CJEU, given that it refers to a concrete factual situation, does not 
resolve all uncertainties. That is what has happened regarding the VAT treatment of supplies 
between a head office and its branch (combined with VAT groups): although the ruling of the 
CJEU  in  Skandia  America4  solved  a  number  of  problems,  doubts  remain  about  the  VAT 
treatment  of  situations  which  do  not  exactly  correspond  to  the  facts  of  the  case  which  was 
submitted to the CJEU. 

In the light of the above, and as announced in the Communication on an Action Plan for Fair 
and  Simple  Taxation  supporting  the  Recovery  Strategy5,  a  change  to  the  VAT  Directive  is 
proposed in order to create a committee that would oversee the adoption of implementing acts 
in certain areas of VAT by the Commission. Three aspects are to be underlined in this regard: 

-First, comitology procedures would only be applied in connection with a limited set of rules 
implementing  the  provisions  of  the  VAT  Directive,  for  which  a  common  interpretation  is 
required.  Any  change  to  the  VAT  Directive  shall  require,  as  is  the  case  today,  unanimous 
agreement in Council.  

-Second,  it  is  in  the  interest  of  both  tax  administrations  and  businesses  to  facilitate  the 
adoption  of  common  interpretations  of  the  provisions  of  the  VAT  Directive,  since 
discrepancies in this area are likely to result in double taxation, distortions of competition and 
additional  costs  for  businesses.  In  this  regard,  comitology  is  the  long-standing  standard 
approach used in EU Law for facilitating the emergence of those common interpretations. It is 
worth noting that in the field of indirect taxation, standard comitology procedures are already 
used for VAT administrative cooperation and excise duties. 

-Third, the Council shall retain its implementing powers insofar as they do not fall within the 
strictly  defined  scope  of  empowerment  of  the  Commission  and  in  particular  on  substantial 
matters especially sensitive for Member States.  

2. 

• 

LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY 

Legal basis 

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

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5 

Judgments  of  the  of  4 May  2017,  Commission  v  Luxembourg,  C-274/15,  EU:C:2017:333;  of 
21 September 2017, DNB Banka, C-326/15, EU:C:2017:719; of 21 September 2017,  Aviva, C-605/15, 
EU:C:2017:718; and of 21 September 2017, Commission v Germany, C-616/15, EU:C:2017:721. 
Judgment of the CJEU of 17 September 2014, Skandia America, C-7/13, ECLI:EU:C:2014:2225. 
Communication from the Commission to the European Parliament and the Council – An action plan for 
fair and simple taxation supporting the recovery strategy, COM(2020) 312 final, 15.7.2020. 

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• 

Subsidiarity (for non-exclusive competence)  

The proposal is consistent with the principle of subsidiarity as the main problem that has been 
identified is precisely the non-harmonised application by the Member States of concepts to be 
found in the VAT Directive, which in turn can lead to double or non-taxation, in particular in 
cross-border situations. It is not possible for Member States alone to address these problems. 
The  fact  that  certain  implementing  powers  are  conferred  on  the  Commission  will  allow 
addressing  more  quickly  and  efficiently  situations  that  are  the  result  of  differences  in 
interpretation and which cause problems for traders. In this, the Commission will be assisted 
by  a  committee,  which  shall  consist  of  VAT  experts  from  the  Member  States’  tax 
administrations and which will  therefore be well placed to deal consistently and swiftly with 
the problems. 

• 

Proportionality 

The  proposal  is  consistent  with  the  principle  of  proportionality  since  it  does  not  go  beyond 
what is necessary to meet the objectives of the Treaties, in particular the smooth functioning 
of the single market, which is currently hindered by diverging interpretation and application 
of VAT concepts by Member States.  

• 

Choice of the instrument 

A Directive is proposed in view of amending the VAT Directive. 

3. 

BUDGETARY IMPLICATIONS 

The proposal has no negative impact on the EU budget. 

4. 

• 

OTHER ELEMENTS 

Detailed explanation of the specific provisions of the proposal 

The proposed role of the Commission assisted by a committee should focus on certain areas 
where uniform application of the concepts in the EU VAT legislation is needed. In absence of 
such uniform application, problems such as double taxation or to non-taxation will persist.  

A]  Implementing  powers  assigned  to  the  Commission  and  to  the  Council:  new 
Article 397a of the VAT Directive, in connection with the new Article 397 therein 

(i) the first subparagraph of paragraph 1 of Article 397a, in connection with the second 
subparagraph of that provision and with Article 397 

Article 291 TFEU  provides,  as  a  general  rule,  that  “where  uniform  conditions  for 
implementing  legally  binding  Union  acts  are  needed”  those  acts  shall  confer  implementing 
powers,  as  a  general  rule,  on  the  Commission  and  in  duly  justified  specific  cases,  on  the 
Council.  The CJEU has  consistently held  that the notions and concepts  used throughout  the 
VAT Directive are, except in the very few cases in which their definition is expressly left in 
the  Directive  itself  to  Member  States,  Union  Law  notions  and  concepts,  which  require 
uniform interpretation and application6. 

The terms of the VAT Directive for which that Directive has made “express reference to the 
law  of  the  Member  States  for  the  purpose  of  determining  (their)  meaning  and  scope”  are 
scarce.  One  can  mention  by  way  of  examples,  the  notions  of  “building  land”  and  “land  on 

6 

See,  inter  alia,  the  judgment  of  27 November  2003,  Zita  Modes,  C-497/01,  ECLI:EU:C:2003:644, 
paragraphs 34 to 36. 

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which a building stands” (Article 12), of “special investment funds” (Article 135(1)(g)), and 
of “provision of accommodation” (Article 135(2)(a)). Most other terms and concepts used in 
the  Directive  need,  according  to  the  CJEU,  a  uniform  interpretation  and  application  that,  as 
established by Article 291 TFEU, should be laid down by means of implementing measures.  

this  defined  empowerment  of 

The assignment  of implementing powers to  the Commission  is  restricted to  determining the 
meaning of certain provisions of the VAT Directive. Council, in turn, retains its implementing 
powers  outside 
the  Commission.  In  particular,  any 
implementing measures which do not aim at defining the meaning of the terms referred to in 
the  first  subparagraph  of  Article  397a(1)  would  fall  under  the  competence  of  the  Council. 
Further, any implementing measures regarding the provisions in Titles I (“Subject matter and 
scope”), Title VIII (“Rates”) and Title XIII (“Derogations”) of the VAT Directive, all of them 
particularly sensitive for Member States, fall squarely within the implementing powers of the 
Council.  Finally, it would be for the Member States to adopt the relevant rules regarding the 
items  expressly  excluded  from  the  Commission’s  implementing  powers  in  the  second 
subparagraph of Article 397a(1).    

(ii)  paragraph 1,  first  subparagraph,  point (a), 
subparagraph 

in  connection  with  the  second 

Title III  of  the  VAT  Directive  refers  to  the  taxable  persons.  A  number  of  provisions  in  this 
Title would need a uniform interpretation since the meaning of the terms used therein has not 
been  assigned  by  the  VAT  Directive  to  the  national  legislation  of  Member  States:  thus,  for 
instance,  the  notion  of  “occasional  basis”  (paragraph 2  of  Article 9)  or  the  notion  of  “trade 
fairs and exhibitions” (category (8) in Annex I).  

By contrast, the Commission should not be empowered through implementing acts: 

– 

– 

to  exercise  on  behalf  of  a  Member  State,  or  to  prevent  the  exercise  by  a  Member 
State, of the options assigned by the VAT Directive to Member States in relation to 
VAT  groups  (Article 11);  occasional  taxable  persons,  alternative  criteria  to  that  of 
first occupation for buildings and meaning of “the land on which a building stands” 
(Article 12)  and  exempt  activities  to  be  treated  as  public  authority  activities 
(paragraph 2 of Article 13); 

to  lay  down  the  definition  of  “building  land”,  since  the  Directive  makes  express 
reference to its definition through national law (paragraph 3 of Article 12). 

(iii)  paragraph 1,  first  subparagraph,  point (b),  in  connection  with  the  second 
subparagraph 

Title IV of the VAT Directive deals with the taxable transactions. It is clear that the notions 
used in the provisions in this Title are in need of uniform application: thus, for instance, the 
notion of “tangible property” (paragraph 1 of Article 14), of “business assets” (paragraph 1 of 
Article 17)  and  of  “arrival”  (paragraph 4  of  Article 17a).  However,  the  Commission  should 
not be entitled through implementing measures to exercise on behalf of a Member State, or to 
prevent the exercise by a Member State, of any of the options assigned to Member States in 
this Title. These options refer to the notion of “supply of goods” (paragraph 3 of Article 14, 
paragraph 2  of  Article 15,  Articles 18  and  19)  and  to  the  notion  of  supply  of  services 
(paragraph 2 of Article 26 and Articles 27 and 29). 

(iv)  paragraph 1,  first  subparagraph,  point (c), 
subparagraph 

in  connection  with  the  second 

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Title V  of  the  VAT  Directive  refers  to  the  place  of  taxable  transactions.  Here  the  need  for 
uniform  application  of  the  provisions  is  evident,  since  divergent  interpretations  by  Member 
States  of  the  terms  used  therein  would  most  likely  lead  to  cases  of  double  taxation  or  non-
taxation.  Thus  for  instance  the  notions  of  “transport  or  dispatch  by  or  on  behalf”  of  the 
supplier (Articles 32 and 33), “assembly or installation” (Article 36), “first supplier” and “last 
customer”  (Article 36a),  “immovable  property”  (Article 47)  and  “restaurant  or  catering” 
(Article 55) are all in need of uniform application throughout the Union. 

By contrast, the Commission should not be empowered, through implementing measures, to 
exercise on behalf of a Member State, or to  prevent  the exercise by  a Member State, of the 
options  assigned  to  Member  States  in  that  Title  (thus  for  instance  the  options  regarding 
“effective use and enjoyment” in relation to the place of supply of certain services). 

(v)  paragraph 1,  first  subparagraph,  point (d), 
subparagraph 

in  connection  with  the  second 

Title VI deals with the chargeable event and the chargeability of VAT. The provisions used in 
this  Title  are  in  need  of  uniform  application:  for  instance  the  notions  of  “successive 
statements of account”, “successive payments” or “continuous supplies of goods” (Article 64) 
and the notions of “payment on account” and “receipt of payment” (Article 65). However, the 
Commission should not be empowered to exercise on behalf of a Member State, or to prevent 
the exercise by a Member State, of the option regarding chargeability of VAT for continuous 
supplies  of  goods  (third  subparagraph  of  paragraph 2  of  Article 64).  The  same  would  apply 
for  the  derogations  allowed  to  Member  States  regarding  chargeability  of  VAT  for  certain 
transactions or certain categories of taxable persons (Article 66). 

(vi)  paragraph 1,  first  subparagraph,  point (e), 
subparagraph 

in  connection  with  the  second 

Title VII of the VAT Directive refers to the taxable amount of VAT. The provisions used in 
this  Title  are  in  need  of  uniform  application:  for  instance  the  notions  of  “marketing  stage”, 
“purchase price” or “cost price” (Article 72); “consideration” and “subsidies directly linked to 
the  price  of  the  supply”  (Article 73);  “taxes,  duties,  levies  and  charges”  and  “incidental 
expenses” (Article 78) and “price discounts and rebates” or “suspense account” (Article 79). 
By contrast,  the Commission  through implementing measures should be  empowered neither 
to exercise on behalf of a Member State nor to prevent the exercise by a Member State, of any 
of  the  options  assigned  to  Member  States  in  that  Title.  Nor  will  the  Commission  be 
empowered to lay down the conditions and rules in respect of the modification of the taxable 
amount (paragraph 1 of Article 90) or the exchange rate (paragraph 2 of Article 91).  

(vii)  paragraph 1,  first  subparagraph,  point (f),  in  connection  with  the  second 
subparagraph 

Title IX  of  the  VAT  Directive  refers  to  exemptions.  The  Commission  should  not  be 
empowered through implementing measures: 

– 

– 

to  lay  down  the  definitions,  recognitions  and  authorisations  entrusted  to  Member 
States  in  paragraph 1  of  Article 132  (such  as  the  definition  of  “medical  and 
paramedical professions” in point (c) of paragraph 1 of Article 132 or the recognition 
of a body as being “devoted to social wellbeing” in point (g) of that same provision); 

to  define  the  notion  of  “special  investment  funds”  (point (g)  of  paragraph 1  of 
Article 135)  and  to  lay  down  the  conditions  and  limitations  for  the  exemption 

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regarding betting, lotteries and other forms of gambling (point (i) of paragraph 1 of 
that same provision);   

– 

to  lay  down  the  limitations  regarding  exemptions  relating  to  certain  transactions 
treated  as  exports  which  the  Directive  entrusts  to  the  host  Member  State 
(Article 151). 

Further, the Commission will not be empowered to exercise on behalf of a Member State, or 
to prevent the exercise by a Member State, of any of the options assigned to Member States in 
that Title. By way of example we can mention here the options regarding the exemptions for 
sport  and  cultural  services  (the  second  paragraph  of  Article 133);  exclusions  from  the 
exemption regarding the leasing or letting of immovable property (the second subparagraph of 
paragraph 2 of Article 135) and the right of option for taxation (Article 137) or the decision to 
apply any of the exemptions for transactions relating to international trade (Chapter 10 of that 
Title).  

(viii)  paragraph 1,  first  subparagraph,  point (g),  in  connection  with  the  second 
subparagraph 

Title X of the VAT Directive refers to deductions. The Commission should not be empowered 
to exercise on behalf of a Member State, or to prevent the exercise by a Member State, of the 
options  assigned  to  Member  States  in  that  Title:  for  instance,  the  options  regarding 
proportional deduction (paragraph 2 of Article 173); the restrictions of the right of deduction 
(in  Articles 176  and  177)  or  the  rules  governing  exercise  of  the  right  of  deduction  (in 
Articles 180 and 181).  

(ix)  paragraph 1,  first  subparagraph,  point (h),  in  connection  with  the  second 
subparagraph 

Title XI and Annex VI of the VAT Directive refer to the VAT obligations. The Commission 
would  for  instance  be  empowered  to  determine,  by  means  of  implementing  measures,  the 
notion  of  “intervention”  (Article 192a),  the  notions  of  “construction  work”  or  “demolition 
services”  (Article 199)  or  the  concept  of  “tax  representative”  (Article 204).  By  contrast,  the 
Commission  would  not  be  able  to  exercise  on  behalf  of  a  Member  State,  or  to  prevent  the 
exercise by a Member State, of the options in those provisions, namely the option to apply a 
reverse charge (Articles 194 or 199) or the option to allow the taxable person to appoint a tax 
representative.  Further,  the  Commission  could  not  define  the  “tax  reference  number” 
(Article 239), since that definition is directly entrusted by the VAT Directive to the Member 
States.  

(x)  paragraph 1,  first  subparagraph,  point (i), 
subparagraph 

in  connection  with  the  second 

Title XII  of  the  VAT  Directive  refers  to  the  special  schemes  of  the  tax.  The  Commission 
should not be empowered to exercise on behalf of a Member State, or to prevent the exercise 
by a Member State, of any of the options assigned to Member States in that Title, namely in 
Articles 281, 284, 285, 286, 287, 296, 301, 303, 318, 326, 330, 333, 342, 344, 349, 352, 366, 
367,  369d,  369h  and  369i.  Nor  should  the  Commission  be  empowered  to  determine  the 
procedures  for  deduction  or  refund  of  the  VAT  entrusted  to  Member  States  in  Article 303 
regarding the special scheme for farmers. Further, the Commission should not be empowered 
to lay down the rules referred to in connection with the exercise of the options in Article 316 
and 324 regarding the special arrangements for taxable dealers.  

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(xi) paragraph 1, third subparagraph 

According  to  paragraph 3  of  Article 291 TFEU  “the  European  Parliament  and  the  Council, 
acting by means of regulations in accordance with the ordinary legislative procedure, shall lay 
down  in  advance  the  rules  and  general  principles  concerning  mechanisms  for  control  by 
Member  States  of  the  Commission's  exercise  of  implementing  powers”.  This  the  European 
Parliament  and  the  Council  have  done  through  the  “Comitology  Regulation”,  adopted  in 
February 20117. 

Although  in  principle  it  would  be  legally  possible  for  the  legislator  to  confer  implementing 
powers on the Commission  without requiring any control by the Member  States8  this  is  not 
the option taken in the proposal. By contrast, a control mechanism entrusted to a committee is 
put  in  place.  This  means  that  in  the  exercise  of  its  implementing  powers  the  Commission 
cannot  act  alone  since  that  exercise  will  in  any  event  require  the  positive  opinion  of  the 
committee. The rules of the Comitology Regulation relating to the examination procedure will 
apply in this framework. 

(xii) paragraph 2 

The rules adopted by Council and  currently  featuring  in  the VAT  Implementing Regulation 
remain  in  force  despite  the  conferral  of  certain  implementing  powers  on  the  Commission. 
Notwithstanding  that  the  Commission,  assisted  by  a  committee,  will  be  able,  always  within 
the defined scope of its empowerment, to adopt future rules which might have the same scope 
as the current provisions of the VAT Implementing Regulation, which in such a case would 
have to be deleted by Council. 

B] The new committee: Article 398a of the VAT Directive 

The  assignment  of  implementing  powers  to  the  Commission  in  this  proposal  does  by  no 
means  entail  a  lack  of  control  by  Member  States  of  the  Commission’s  exercise  of  those 
powers. The rules and general principles concerning mechanisms of control by Member States 
of the Commission’s exercise of implementing powers are laid down in secondary legislation, 
i.e. the Comitology Regulation. For taxation matters the “examination procedure” laid down 
in Article 5 of the Comitology Regulation (there is no possibility of applying in the field of 
taxation the “advisory procedure” referred to in Article 4) ensures that the Commission can do 
nothing  without  the  agreement  of  Member  States  in  the  new  committee.  Only  in  case  of  a 
positive opinion of the committee shall the Commission be entitled to adopt the implementing 
measure; by contrast, both in cases of negative opinion and of no opinion of the committee the 
Commission shall not be empowered to adopt the relevant implementing act.  

The provisions on the composition and chairman for the committee are directly laid down in 
Article 3 of the Comitology Regulation. The VAT Committee shall keep its role as the body 
in charge of examining the consultations provided for under the VAT Directive. Reference to 
such consultations is made in Articles 11, 27, 102, 155, 164, 167, 177, 191, 238, 281, 318 and 
352.  Further,  the  VAT  Committee  should  also  be  able  to  examine  any  other  matters  on  the 
application of Union provisions on VAT, but in these areas it will only be empowered to issue 
non-binding guidelines, as is the case today.  

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Regulation (EU) 182/2011 of the European Parliament and of the Council of 16 February 2011 laying 
down  the  rules  and  general  principles  concerning  mechanisms  for  control  by  Member  States  of  the 
Commission’s exercise of implementing powers, OJ L 55, 28.2.2011, p. 13. 
See recital (6) and Article 1 of the Comitology Regulation. 

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2020/0331 (CNS) 

Proposal for a 

COUNCIL DIRECTIVE 

amending Directive 2006/112/EC as regards conferral of implementing powers to the 
Commission to determine the meaning of the terms used in certain provisions of that 
Directive 

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 Parliament9, 
Having regard to the opinion of the European Economic and Social Committee10, 

Acting in accordance with a special legislative procedure, 

Whereas: 

(1) 

(2) 

(3) 

(4) 

(5) 

9 
10 
11 

In order to ensure uniform application of Union law and to comply with the principle 
of equality the terms used in provisions of Council Directive 2006/112/EC11, which do 
not  expressly  allow  Member  States  to  determine  their  meaning  and  scope,  need 
uniform interpretation throughout the Union.  

Divergent interpretation of the terms used in Directive 2006/112/EC are likely to result 
in instances of double taxation, entail legal uncertainty, additional costs for businesses 
and distortion of competition. Uniform interpretation of those terms at Union level is 
also  necessary  to  facilitate  application  of  Directive  2006/112/EC  by  the  tax 
administrations and businesses. 

Article 291  of  the  Treaty  on  the  Functioning  of  the  European  Union  provides  that 
where  uniform  conditions  for  implementing  legally  binding  Union  acts  are  needed 
those acts are to confer implementing powers on the Commission or, in duly justified 
specific cases, on the Council. 

In order to enhance the efficiency of the decision making process in the area of value 
added tax (VAT) and to contribute to a more uniform application of the Union VAT 
legislation  implementing  powers  to  determine  the  meaning  of  certain  terms  used  in 
Directive 2006/112/EC should be conferred on the Commission. 

The  implementing  powers  conferred  on  the  Commission  should  not  undermine  the 
discretion  left  to  the  Member  States  for  adoption  of  measures  of  national  law 
necessary  to  implement  some  of  the  provisions  of  Directive  2006/112/EC.  It  is 

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.). 

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(6) 

(7) 

(8) 

therefore necessary to clarify the scope of the implementing powers conferred on the 
Commission accordingly.  

The  implementing  powers  in  duly  justified  specific  cases,  on  substantial  matters 
particularly  sensitive  for  Member  States,  should  be  assigned  to  the  Council.  This 
would in particular be the case regarding any implementing measures which might be 
needed  regarding  the  provisions  in  Title  I  (“Subject  matter  and  scope”),  Title  VIII 
(“Rates”) and Title XIII (“Derogations”) of the VAT Directive.  

In order to ensure uniform conditions for the implementation of the relevant provisions 
of  Directive  2006/112/EC,  implementing  powers  should  be  conferred  on  the 
Commission as regards the determination of the meaning of the terms used in certain 
provisions  of  that  Directive.  Those  powers  should  be  exercised  in  accordance  with 
Regulation (EU) No 182/2011 of the European Parliament and of the Council12. 

 Since the objective of this Directive, namely ensuring a more uniform application of 
the Union VAT legislation, cannot be sufficiently achieved by the Member States but 
can  rather  be  better  achieved  at  Union  level,  the  Union  may  adopt  measures,  in 
accordance  with  the  principle  of  subsidiarity  as  set  out  in  Article  5  of  the  Treaty  on 
European Union. In accordance with the principle of proportionality as set out in that 
Article, this Directive does not go beyond what is necessary in order to achieve those 
objectives. 

(9) 

Directive 2006/112/EC should therefore be amended accordingly, 

HAS ADOPTED THIS DIRECTIVE: 

 Directive 2006/112/EC is amended as follows: 

(1) 

Article 397 is replaced by the following: 

Article 1 

‘Article 397 

The Council, acting unanimously on a proposal from the Commission, may adopt: 

(a)any measures necessary to implement the provisions in Titles I, VIII, XIII, and in 
Annexes III, IV, V and X of this Directive; 

(b)any measures necessary to implement the provisions in the Titles and Annexes of 
this  Directive  not  mentioned  in  point  (a),  in  so  far  as  those  measures  do  not  entail 
determination of the meaning of the terms used therein. 

(2) 

in Chapter 1 of Title XIV, the following Article 397a is inserted:  

‘Article 397a 

1.   The Commission may, by means of implementing acts, determine the meaning 
of the terms used in the following provisions: 

(a) 

as  regards  the  taxable  persons  for  the  purposes  of  VAT,  the  provisions  in 
Title III and Annex I; 

12 

Regulation  (EU)  No  182/2011  of  the  European  Parliament  and  of  the  Council  of  16  February  2011 
laying down the rules and general principles concerning mechanisms for control by the Member States 
of the Commission's exercise of implementing powers (OJ L 55, 28.2.2011, p. 13). 

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9 

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(b) 

(c) 

(d) 

(e) 

(f) 

(g) 

(h) 

(i) 

as regards the transactions that are taxable for VAT purposes, the provisions in 
Title IV; 

as  regards  the  place  of  taxable  transactions,  the  provisions  in  Title V  and 
Annex II;  

as regards the chargeable event and the chargeability of VAT, the provisions in 
Title VI; 

as regards the taxable amount of VAT, the provisions in Title VII;  

as regards the exemptions from VAT, the provisions in Title IX; 

as regards the deductions from VAT, the provisions in Title X; 

as regards the obligations of taxable persons and certain  non-taxable persons, 
the provisions in Title XI and Annex VI; 

as  regards  the  special  schemes  of  the  tax,  the  provisions  in  Title XII  and 
Annexes VII, VIII and IX. 

The first subparagraph shall not apply to the following provisions: 

(a) 

provisions  that  allow  Member  States  to  exercise  an  option,  in  so  far  as  the 
decision to exercise that option is concerned; 

(b)  provisions containing express reference to terms to be defined by the Member 

States, in so far as the definition of the meaning of those terms is concerned; 

(c) 

provisions where conditions, procedures and rules are to be determined by the 
Member  States,  in  so  far  as  those  conditions,  procedures  and  rules  are 
concerned; 

(d)  provisions  on  procedures for recognitions  and authorisations  to  be granted by 

the Member States, in so far as those procedures are concerned; 

(e) 

provisions on the tax reference number in Article 239. 

The  implementing  acts  referred  to  in  the  first  subparagraph  shall  be  adopted  in 
accordance with the examination procedure referred to in Article 398a(2). 

2. Where the provisions of the Commission implementing acts adopted in accordance 
with  paragraph 1  of  this  Article  have  the  same  scope  as  the  provisions  of 
implementing  measures  adopted  by  the  Council  in  accordance  with  Article 397  of 
this  Directive  as  amended  by  Council  Directive  (EU)  2020/285*,  the  Council  shall 
delete the relevant provisions in its implementing measures. 

_______________________________ 

*  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). 

(3) 

in Title XIV, the title of Chapter 2 is  replaced by the following: 

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‘CHAPTER 2 

Committees’; 

(4) 

in Chapter 2 of Title XIV, the following Article 398a is inserted: 

‘Article 398a 

1.   The Commission shall be assisted by a committee. That committee shall be a 
committee within the meaning of Regulation (EU) No 182/2011.  

2.   Where  reference  is  made  to  this  paragraph,  Article 5  of  Regulation  (EU) 
No 182/2011 shall apply. ’ 

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

Article 2 

This Directive is addressed to the Member States. 

Done at Brussels, 

Article 3 

For the Council 
The President 

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