Council Directive 2010/23/EU of 16 March 2010 amending Directive 2006/112/EC on the common system of value added tax, as regards an optional and temporary application of the reverse charge mechanism in relation to supplies of certain services susceptible to fraud

20.3.2010 EN Official Journal of the European Union L 72/1
COUNCIL DIRECTIVE 2010/23/EU
of 16 March 2010
amending Directive 2006/112/EC on the common system of value added tax, as regards an optional and temporary application of the reverse charge mechanism in relation to supplies of certain services susceptible to fraud
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,
Having regard to the opinion of the European Parliament (1),
Having regard to the opinion of the European Economic and Social Committee (2),
Acting in accordance with a special legislative procedure,
Whereas:
(1) Council Directive 2006/112/EC (3) specifies that value added tax (VAT) shall be payable by any taxable person carrying out transactions involving the taxable supply of goods and services. In the case of cross-border transactions, and for certain domestic high-risk sectors such as construction or waste, it is foreseen, however, to shift the obligation to pay VAT onto the person to whom the supply is made.
(2) Given the seriousness of VAT fraud, Member States should be allowed to apply, on a temporary basis, a mechanism whereby the obligation to pay VAT shifts onto the person to whom allowances to emit greenhouse gases, as defined in Article 3 of Directive 2003/87/EC (4), and other units that may be used for compliance with the same Directive, are transferred.
(3) The introduction of such a mechanism targeting these services, which according to recent experience are particularly susceptible to fraud, as opposed to its general application, should not adversely affect the fundamental principles of the VAT system, such as fractionated payments.
(4) Member States should produce an evaluation report on the application of the mechanism so as to enable an assessment of its efficiency.
(5) In order to assess the effect of the application of the mechanism on fraudulent activities in a transparent manner, evaluation reports by Member States should be based on pre-defined criteria established by Member States. Any such evaluation should clearly assess the level of fraud before and after the application of the mechanism and any consequent shifts in trends of fraudulent activities, including supplies of other services. The report should also evaluate compliance costs for taxable persons.
(6) Each Member State that has detected a shift in trends of fraudulent activities in its territory in relation to the services under this Directive should produce a report in that respect.
(7) In order to provide all Member States with the option of applying such a mechanism, a specific amendment to Directive 2006/112/EC is necessary.
(8) Since the objective of this Directive, namely to address VAT fraud through a temporary measure which derogates from existing Union rules, cannot be sufficiently achieved by the Member States and can therefore 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 that objective.
(9) Directive 2006/112/EC should therefore be amended accordingly,