Article 59b 
Member States shall apply Article 59a(b) to telecommunications services and radio and television broadcasting services, as referred to in point (j) of the first paragraph of Article 59, supplied to non-taxable persons who are established in a Member State, or who have their permanent address or usually reside in a Member State, by a taxable person who has established his business outside the Community or has a fixed establishment there from which the services are supplied, or who, in the absence of such a place of business or fixed establishment, has his permanent address or usually resides outside the Community.
Amendment rationale: CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal On 7 April 2016, the Commission adopted the VAT Action Plan 1 which presents objectives and measures to modernise the EU VAT system. It builds on the work carried out since the Communication on the future of VAT 2 that followed the large consultation process initiated by the Commission with its Green Paper on the future of VAT 3 . The creation of a robust single European VAT area is one of the key actions announced by the Commission in its Action Plan. It will require the setting up of the definitive VAT system for intra-EU business-to-business (B2B) cross-border trade in order to replace the current system which was intended to be transitional. As agreed by the European Parliament and the Council, this definitive VAT system will be based on the principle of taxation in the country of destination of the goods (the so called “destination principle”) whereas the current system is based on exemption of supplies of goods in the Member State of departure. Therefore, the Commission announced its intention to present a legislative proposal in 2017 for the definitive VAT system for cross-border trade based on this “taxation” option. However, since preparing, adopting and implementing such a major change is likely to take some time, the Commission recognized the need to work in parallel on other initiatives, in particular on urgent measures to tackle VAT fraud and, subsequently, the VAT gap, the difference between the expected VAT revenue and the VAT actually collected by tax authorities. This VAT gap has reached an alarming level of nearly EUR 160 billion 4 of which cross-border fraud accounts for about EUR 50 billion of revenue loss each year 5 . As one of these urgent measures, the Commission considered, upon request of certain Member States, the possibility of allowing these Member States to implement a temporary generalised reverse charge mechanism (GRCM) that would derogate from one of the general principles of the VAT Directive 6 , which is the fractionated payment. To that end, the Commission agreed to thoroughly assess the political, legal and economic implications of such a temporary GRCM before presenting its conclusions. This in depth analysis at technical level of a GRCM, with an invoice threshold of EUR 10 000, has been carried out and presented during the ECOFIN meeting of 17 June 2016. In the context of a political agreement on the overall anti-fraud policy within the EU, the Commission made the following statement to the ECOFIN Minutes: "The Commission commits to present, before the end of the year, a legislative proposal allowing individual Member States to derogate from the common system of value added tax so as to apply a generalised reverse charge mechanism to domestic supplies above a defined threshold and preserving the Internal Market." Consistency with existing policy provisions in the policy area The purpose of the legislative proposal is limited in scope and in time and is without prejudice to the development of the definitive VAT system based upon the taxation of cross-border supplies.
Article 60 
The place of importation of goods shall be the Member State within whose territory the goods are located when they enter the Community.
Article 61 
By way of derogation from Article 60, where, on entry into the Community, goods which are not in free circulation are placed under one of the arrangements or situations referred to in Article 156, or under temporary importation arrangements with total exemption from import duty, or under external transit arrangements, the place of importation of such goods shall be the Member State within whose territory the goods cease to be covered by those arrangements or situations. Similarly, where, on entry into the Community, goods which are in free circulation are placed under one of the arrangements or situations referred to in Articles 276 and 277, the place of importation shall be the Member State within whose territory the goods cease to be covered by those arrangements or situations.
Article 62 
For the purposes of this Directive: (1) ‘chargeable event’ shall mean the occurrence by virtue of which the legal conditions necessary for VAT to become chargeable are fulfilled; (2) VAT shall become ‘chargeable’ when the tax authority becomes entitled under the law, at a given moment, to claim the tax from the person liable to pay, even though the time of payment may be deferred.
Article 63 
The chargeable event shall occur and VAT shall become chargeable when the goods or the services are supplied.
Article 64 
1. Where it gives rise to successive statements of account or successive payments, the supply of goods, other than that consisting in the hire of goods for a certain period or the sale of goods on deferred terms, as referred to in point (b) of Article 14(2), or the supply of services shall be regarded as being completed on expiry of the periods to which such statements of account or payments relate. 2. Supplies of services for which VAT is payable by the customer pursuant to Article 196, which are supplied continuously over a period of more than one year and which do not give rise to statements of account or payments during that period shall be regarded as being completed on expiry of each calendar year until such time as the supply of services comes to an end. Member States may provide that, in certain cases other than those referred to in the previous paragraph, the continuous supply of goods or services over a period of time is to be regarded as being completed at least at intervals of one year.
Amendment rationale: CONTEXT OF THE PROPOSAL 1. Article 97(1) of Directive 2006/112/EC of 28 November 2006 on the common system of value added tax[1] (hereinafter "the VAT Directive") provides that from 1 January 2006 until 31 December 2010 the standard rate may not be less than 15% and Article 97(2) stipulates that the Council shall decide, in accordance with Article 93 of the Treaty, on the level of the standard rate of value added tax (VAT) to be applied after 31 December 2010. 2. This provision was based on Article 93 of the Treaty establishing the European Community (the EC Treaty). As from 1 December 2009, Article 93 of the EC Treaty is replaced by Article 113 of the Treaty on the Functioning of the European Union (TFEU). Article 113 TFEU stipulates that the Council shall, acting unanimously in accordance with a special legislative procedure and after consulting the European Parliament and the Economic and Social Committee, adopt provisions for the harmonisation of legislation concerning turnover taxes to the extent that such harmonisation is necessary to ensure the establishment and functioning of the internal market and to avoid distortion of competition. 3. With a view to establishing the internal market on 1 January 1993, the Commission presented proposals intended to set up a definitive system of tax harmonisation. 4. However, when it became clear that it would be impossible to adopt the Commission's proposals before 1 January 1993, the Council decided to adopt a transitional system. With regard to VAT rates, it adopted Directive 92/77/EEC[2]. 5. That Directive introduced a system of minimum rates. It stipulated that from 1 January 1993 to 31 December 1996, the standard rate could not be set lower than 15%. This provision has been extended four times and applies until 31 December 2010. 6. To maintain the degree of harmonisation of rates already achieved, the Commission has twice presented proposals providing for a standard rate band with a minimum rate of 15% and a maximum rate of 25%[3]. The band was derived from the rates applied in practice in Member States, where standard rates have always varied between 15% and 25%. 7. In both cases, the proposals to approximate rates were amended by the Council,[4] which kept only the principle of a minimum rate, referring to a 15% minimum rate comparable to the system introduced by the 1992 Directive. 8. However, these Council Directives were adopted with a statement for the Council minutes mentioning Member States' efforts to avoid widening the 10 percentage point span between the lowest and highest rates applied. This demonstrates the continued concerns of Member States about distortions between high and low rate countries and the possible budgetary effects of different levels of VAT rates. In the light of the current economic crisis, there are further arguments for keeping a minimum standard rate to be laid down in the VAT Directive. 9. Despite various improvements to the common VAT system based on the Commission's pragmatic, phased VAT strategy launched in 2000[5] and updated in 2003[6], the VAT system continues to suffer from shortcomings and high administrative burdens. This means it needs to be fundamentally reassessed. New economic realities, technological processes, fraud patterns etc. also give rise to new challenges. That is why the Commission plans to publish a consultative green paper soon on a new VAT strategy. This will launch a consultation on future tax harmonisation. Only in the light of the outcome of that process can an appropriate decision be taken on the level of standard rates of VAT in the EU. 10. Moreover, recent modifications to the VAT Directive[7] have favoured taxation at the place of consumption, as this results in fewer possibilities for cross-border transactions seeking lower VAT rates, leading to distortions of competition. However, it remains important to prevent growing divergence in standard VAT rates applied by Member States from leading to structural imbalances in the EU and distortions of competition in some sectors of activity. To this end, it is common practice in the field of indirect taxes, both for excise duties and VAT, to set minimum rates. Although no maximum rate is proposed, the span between the standard rates applied in the Member States can – as is currently the case – be expected to ensure the proper functioning of the internal market while acknowledging the possible need for new budgetary resources from consumption taxes. 11. The accession of new Member States on 1 May 2004 and on 1 January 2007 did not alter the situation regarding the standard rate. That still ranges from 15% to 25% in 27 Member States. Two Member States (Cyprus and Luxembourg) apply a 15% rate and three a 25% rate (Denmark, Hungary and Sweden). 12. In these circumstances, it therefore appears appropriate to maintain the principle of a minimum standard VAT rate of 15%, and to propose that the current arrangements be extended. 13. To give businesses necessary legal certainty, and allow further evaluation of the appropriate level of the standard VAT rate at EU level, it seems appropriate to extend the provision for another five years, while the Commission reflects on a new VAT strategy and re-examines the standard VAT rate appropriate for a common approach. 14. Since the application of the minimum standard rate under Article 97(1) of Directive 2006/112/EC expires on 31 December 2010, the object of this proposal is to enable the Council to extend the period during which this rate applies. The minimum standard VAT rate is therefore set at 15% for five years from 1 January 2011 to 31 December 2015. The Commission would also expect the Council to renew the statement for the minutes agreed earlier on the span between the lowest and highest rates applied for that same period.
Revised version (Article 64 ):
1. Where it gives rise to successive statements of account or successive payments, the supply of goods, other than that consisting in the hire of goods for a certain period or the sale of goods on deferred terms, as referred to in point (b) of Article 14(2), or the supply of services shall be regarded as being completed on expiry of the periods to which such statements of account or payments relate. 2. Continuous supplies of goods over a period of more than one calendar month which are dispatched or transported to a Member State other than that in which the dispatch or transport of those goods begins and which are supplied VAT-exempt or which are transferred VAT-exempt to another Member State by a taxable person for the purposes of his business, in accordance with the conditions laid down in Article 138, shall be regarded as being completed on expiry of each calendar month until such time as the supply comes to an end. Supplies of services for which VAT is payable by the customer pursuant to Article 196, which are supplied continuously over a period of more than one year and which do not give rise to statements of account or payments during that period, shall be regarded as being completed on expiry of each calendar year until such time as the supply of services comes to an end. Member States may provide that, in certain cases other than those referred to in the first and second subparagraphs, the continuous supply of goods or services over a period of time is to be regarded as being completed at least at intervals of one year.
Article 65 
Where a payment is to be made on account before the goods or services are supplied, VAT shall become chargeable on receipt of the payment and on the amount received.
Article 66 
By way of derogation from Articles 63, 64 and 65, Member States may provide that VAT is to become chargeable, in respect of certain transactions or certain categories of taxable person at one of the following times: (a) no later than the time the invoice is issued; (b) no later than the time the payment is received; (c) where an invoice is not issued, or is issued late, within a specified period from the date of the chargeable event. The derogation provided for in the first paragraph shall not, however, apply to supplies of services in respect of which VAT is payable by the customer pursuant to Article 196.
Amendment rationale: CONTEXT OF THE PROPOSAL 1. Article 97(1) of Directive 2006/112/EC of 28 November 2006 on the common system of value added tax[1] (hereinafter "the VAT Directive") provides that from 1 January 2006 until 31 December 2010 the standard rate may not be less than 15% and Article 97(2) stipulates that the Council shall decide, in accordance with Article 93 of the Treaty, on the level of the standard rate of value added tax (VAT) to be applied after 31 December 2010. 2. This provision was based on Article 93 of the Treaty establishing the European Community (the EC Treaty). As from 1 December 2009, Article 93 of the EC Treaty is replaced by Article 113 of the Treaty on the Functioning of the European Union (TFEU). Article 113 TFEU stipulates that the Council shall, acting unanimously in accordance with a special legislative procedure and after consulting the European Parliament and the Economic and Social Committee, adopt provisions for the harmonisation of legislation concerning turnover taxes to the extent that such harmonisation is necessary to ensure the establishment and functioning of the internal market and to avoid distortion of competition. 3. With a view to establishing the internal market on 1 January 1993, the Commission presented proposals intended to set up a definitive system of tax harmonisation. 4. However, when it became clear that it would be impossible to adopt the Commission's proposals before 1 January 1993, the Council decided to adopt a transitional system. With regard to VAT rates, it adopted Directive 92/77/EEC[2]. 5. That Directive introduced a system of minimum rates. It stipulated that from 1 January 1993 to 31 December 1996, the standard rate could not be set lower than 15%. This provision has been extended four times and applies until 31 December 2010. 6. To maintain the degree of harmonisation of rates already achieved, the Commission has twice presented proposals providing for a standard rate band with a minimum rate of 15% and a maximum rate of 25%[3]. The band was derived from the rates applied in practice in Member States, where standard rates have always varied between 15% and 25%. 7. In both cases, the proposals to approximate rates were amended by the Council,[4] which kept only the principle of a minimum rate, referring to a 15% minimum rate comparable to the system introduced by the 1992 Directive. 8. However, these Council Directives were adopted with a statement for the Council minutes mentioning Member States' efforts to avoid widening the 10 percentage point span between the lowest and highest rates applied. This demonstrates the continued concerns of Member States about distortions between high and low rate countries and the possible budgetary effects of different levels of VAT rates. In the light of the current economic crisis, there are further arguments for keeping a minimum standard rate to be laid down in the VAT Directive. 9. Despite various improvements to the common VAT system based on the Commission's pragmatic, phased VAT strategy launched in 2000[5] and updated in 2003[6], the VAT system continues to suffer from shortcomings and high administrative burdens. This means it needs to be fundamentally reassessed. New economic realities, technological processes, fraud patterns etc. also give rise to new challenges. That is why the Commission plans to publish a consultative green paper soon on a new VAT strategy. This will launch a consultation on future tax harmonisation. Only in the light of the outcome of that process can an appropriate decision be taken on the level of standard rates of VAT in the EU. 10. Moreover, recent modifications to the VAT Directive[7] have favoured taxation at the place of consumption, as this results in fewer possibilities for cross-border transactions seeking lower VAT rates, leading to distortions of competition. However, it remains important to prevent growing divergence in standard VAT rates applied by Member States from leading to structural imbalances in the EU and distortions of competition in some sectors of activity. To this end, it is common practice in the field of indirect taxes, both for excise duties and VAT, to set minimum rates. Although no maximum rate is proposed, the span between the standard rates applied in the Member States can – as is currently the case – be expected to ensure the proper functioning of the internal market while acknowledging the possible need for new budgetary resources from consumption taxes. 11. The accession of new Member States on 1 May 2004 and on 1 January 2007 did not alter the situation regarding the standard rate. That still ranges from 15% to 25% in 27 Member States. Two Member States (Cyprus and Luxembourg) apply a 15% rate and three a 25% rate (Denmark, Hungary and Sweden). 12. In these circumstances, it therefore appears appropriate to maintain the principle of a minimum standard VAT rate of 15%, and to propose that the current arrangements be extended. 13. To give businesses necessary legal certainty, and allow further evaluation of the appropriate level of the standard VAT rate at EU level, it seems appropriate to extend the provision for another five years, while the Commission reflects on a new VAT strategy and re-examines the standard VAT rate appropriate for a common approach. 14. Since the application of the minimum standard rate under Article 97(1) of Directive 2006/112/EC expires on 31 December 2010, the object of this proposal is to enable the Council to extend the period during which this rate applies. The minimum standard VAT rate is therefore set at 15% for five years from 1 January 2011 to 31 December 2015. The Commission would also expect the Council to renew the statement for the minutes agreed earlier on the span between the lowest and highest rates applied for that same period.
Revised version (Article 66 ):
By way of derogation from Articles 63, 64 and 65, Member States may provide that VAT is to become chargeable, in respect of certain transactions or certain categories of taxable person at one of the following times: (a) no later than the time the invoice is issued; (b) no later than the time the payment is received; (c) where an invoice is not issued, or is issued late, within a specified time no later than on expiry of the time-limit for issue of invoices imposed by Member States pursuant to the second paragraph of Article 222 or where no such time-limit has been imposed by the Member State, within a specified period from the date of the chargeable event. The derogation provided for in the first paragraph shall not, however, apply to supplies of services in respect of which VAT is payable by the customer pursuant to Article 196 and to supplies or transfers of goods referred to in Article 67.
Article 67 
1. Where, in accordance with the conditions laid down in Article 138, goods dispatched or transported to a Member State other than that in which dispatch or transport of the goods begins are supplied VAT-exempt or where goods are transferred VAT-exempt to another Member State by a taxable person for the purposes of his business, VAT shall become chargeable on the 15th day of the month following that in which the chargeable event occurs. 2. By way of derogation from paragraph 1, VAT shall become chargeable on issue of the invoice provided for in Article 220, if that invoice is issued before the 15th day of the month following that in which the chargeable event occurs.
Amendment rationale: CONTEXT OF THE PROPOSAL 1. Article 97(1) of Directive 2006/112/EC of 28 November 2006 on the common system of value added tax[1] (hereinafter "the VAT Directive") provides that from 1 January 2006 until 31 December 2010 the standard rate may not be less than 15% and Article 97(2) stipulates that the Council shall decide, in accordance with Article 93 of the Treaty, on the level of the standard rate of value added tax (VAT) to be applied after 31 December 2010. 2. This provision was based on Article 93 of the Treaty establishing the European Community (the EC Treaty). As from 1 December 2009, Article 93 of the EC Treaty is replaced by Article 113 of the Treaty on the Functioning of the European Union (TFEU). Article 113 TFEU stipulates that the Council shall, acting unanimously in accordance with a special legislative procedure and after consulting the European Parliament and the Economic and Social Committee, adopt provisions for the harmonisation of legislation concerning turnover taxes to the extent that such harmonisation is necessary to ensure the establishment and functioning of the internal market and to avoid distortion of competition. 3. With a view to establishing the internal market on 1 January 1993, the Commission presented proposals intended to set up a definitive system of tax harmonisation. 4. However, when it became clear that it would be impossible to adopt the Commission's proposals before 1 January 1993, the Council decided to adopt a transitional system. With regard to VAT rates, it adopted Directive 92/77/EEC[2]. 5. That Directive introduced a system of minimum rates. It stipulated that from 1 January 1993 to 31 December 1996, the standard rate could not be set lower than 15%. This provision has been extended four times and applies until 31 December 2010. 6. To maintain the degree of harmonisation of rates already achieved, the Commission has twice presented proposals providing for a standard rate band with a minimum rate of 15% and a maximum rate of 25%[3]. The band was derived from the rates applied in practice in Member States, where standard rates have always varied between 15% and 25%. 7. In both cases, the proposals to approximate rates were amended by the Council,[4] which kept only the principle of a minimum rate, referring to a 15% minimum rate comparable to the system introduced by the 1992 Directive. 8. However, these Council Directives were adopted with a statement for the Council minutes mentioning Member States' efforts to avoid widening the 10 percentage point span between the lowest and highest rates applied. This demonstrates the continued concerns of Member States about distortions between high and low rate countries and the possible budgetary effects of different levels of VAT rates. In the light of the current economic crisis, there are further arguments for keeping a minimum standard rate to be laid down in the VAT Directive. 9. Despite various improvements to the common VAT system based on the Commission's pragmatic, phased VAT strategy launched in 2000[5] and updated in 2003[6], the VAT system continues to suffer from shortcomings and high administrative burdens. This means it needs to be fundamentally reassessed. New economic realities, technological processes, fraud patterns etc. also give rise to new challenges. That is why the Commission plans to publish a consultative green paper soon on a new VAT strategy. This will launch a consultation on future tax harmonisation. Only in the light of the outcome of that process can an appropriate decision be taken on the level of standard rates of VAT in the EU. 10. Moreover, recent modifications to the VAT Directive[7] have favoured taxation at the place of consumption, as this results in fewer possibilities for cross-border transactions seeking lower VAT rates, leading to distortions of competition. However, it remains important to prevent growing divergence in standard VAT rates applied by Member States from leading to structural imbalances in the EU and distortions of competition in some sectors of activity. To this end, it is common practice in the field of indirect taxes, both for excise duties and VAT, to set minimum rates. Although no maximum rate is proposed, the span between the standard rates applied in the Member States can – as is currently the case – be expected to ensure the proper functioning of the internal market while acknowledging the possible need for new budgetary resources from consumption taxes. 11. The accession of new Member States on 1 May 2004 and on 1 January 2007 did not alter the situation regarding the standard rate. That still ranges from 15% to 25% in 27 Member States. Two Member States (Cyprus and Luxembourg) apply a 15% rate and three a 25% rate (Denmark, Hungary and Sweden). 12. In these circumstances, it therefore appears appropriate to maintain the principle of a minimum standard VAT rate of 15%, and to propose that the current arrangements be extended. 13. To give businesses necessary legal certainty, and allow further evaluation of the appropriate level of the standard VAT rate at EU level, it seems appropriate to extend the provision for another five years, while the Commission reflects on a new VAT strategy and re-examines the standard VAT rate appropriate for a common approach. 14. Since the application of the minimum standard rate under Article 97(1) of Directive 2006/112/EC expires on 31 December 2010, the object of this proposal is to enable the Council to extend the period during which this rate applies. The minimum standard VAT rate is therefore set at 15% for five years from 1 January 2011 to 31 December 2015. The Commission would also expect the Council to renew the statement for the minutes agreed earlier on the span between the lowest and highest rates applied for that same period.
Revised version (Article 67 ):
Where, in accordance with the conditions laid down in Article 138, goods dispatched or transported to a Member State other than that in which dispatch or transport of the goods begins are supplied VAT-exempt or where goods are transferred VAT-exempt to another Member State by a taxable person for the purposes of his business, VAT shall become chargeable on issue of the invoice, or on expiry of the time limit referred to in the first paragraph of Article 222 if no invoice has been issued by that time. Article 64(1), the third subparagraph of Article 64(2) and Article 65 shall not apply with respect to the supplies and transfers of goods referred to in the first paragraph.
Article 68 
The chargeable event shall occur when the intra-Community acquisition of goods is made. The intra-Community acquisition of goods shall be regarded as being made when the supply of similar goods is regarded as being effected within the territory of the relevant Member State.
Article 69 
1. In the case of the intra-Community acquisition of goods, VAT shall become chargeable on the 15th day of the month following that in which the chargeable event occurs. 2. By way of derogation from paragraph 1, VAT shall become chargeable on issue of the invoice provided for in Article 220, if that invoice is issued before the 15th day of the month following that in which the chargeable event occurs.
Amendment rationale: CONTEXT OF THE PROPOSAL 1. Article 97(1) of Directive 2006/112/EC of 28 November 2006 on the common system of value added tax[1] (hereinafter "the VAT Directive") provides that from 1 January 2006 until 31 December 2010 the standard rate may not be less than 15% and Article 97(2) stipulates that the Council shall decide, in accordance with Article 93 of the Treaty, on the level of the standard rate of value added tax (VAT) to be applied after 31 December 2010. 2. This provision was based on Article 93 of the Treaty establishing the European Community (the EC Treaty). As from 1 December 2009, Article 93 of the EC Treaty is replaced by Article 113 of the Treaty on the Functioning of the European Union (TFEU). Article 113 TFEU stipulates that the Council shall, acting unanimously in accordance with a special legislative procedure and after consulting the European Parliament and the Economic and Social Committee, adopt provisions for the harmonisation of legislation concerning turnover taxes to the extent that such harmonisation is necessary to ensure the establishment and functioning of the internal market and to avoid distortion of competition. 3. With a view to establishing the internal market on 1 January 1993, the Commission presented proposals intended to set up a definitive system of tax harmonisation. 4. However, when it became clear that it would be impossible to adopt the Commission's proposals before 1 January 1993, the Council decided to adopt a transitional system. With regard to VAT rates, it adopted Directive 92/77/EEC[2]. 5. That Directive introduced a system of minimum rates. It stipulated that from 1 January 1993 to 31 December 1996, the standard rate could not be set lower than 15%. This provision has been extended four times and applies until 31 December 2010. 6. To maintain the degree of harmonisation of rates already achieved, the Commission has twice presented proposals providing for a standard rate band with a minimum rate of 15% and a maximum rate of 25%[3]. The band was derived from the rates applied in practice in Member States, where standard rates have always varied between 15% and 25%. 7. In both cases, the proposals to approximate rates were amended by the Council,[4] which kept only the principle of a minimum rate, referring to a 15% minimum rate comparable to the system introduced by the 1992 Directive. 8. However, these Council Directives were adopted with a statement for the Council minutes mentioning Member States' efforts to avoid widening the 10 percentage point span between the lowest and highest rates applied. This demonstrates the continued concerns of Member States about distortions between high and low rate countries and the possible budgetary effects of different levels of VAT rates. In the light of the current economic crisis, there are further arguments for keeping a minimum standard rate to be laid down in the VAT Directive. 9. Despite various improvements to the common VAT system based on the Commission's pragmatic, phased VAT strategy launched in 2000[5] and updated in 2003[6], the VAT system continues to suffer from shortcomings and high administrative burdens. This means it needs to be fundamentally reassessed. New economic realities, technological processes, fraud patterns etc. also give rise to new challenges. That is why the Commission plans to publish a consultative green paper soon on a new VAT strategy. This will launch a consultation on future tax harmonisation. Only in the light of the outcome of that process can an appropriate decision be taken on the level of standard rates of VAT in the EU. 10. Moreover, recent modifications to the VAT Directive[7] have favoured taxation at the place of consumption, as this results in fewer possibilities for cross-border transactions seeking lower VAT rates, leading to distortions of competition. However, it remains important to prevent growing divergence in standard VAT rates applied by Member States from leading to structural imbalances in the EU and distortions of competition in some sectors of activity. To this end, it is common practice in the field of indirect taxes, both for excise duties and VAT, to set minimum rates. Although no maximum rate is proposed, the span between the standard rates applied in the Member States can – as is currently the case – be expected to ensure the proper functioning of the internal market while acknowledging the possible need for new budgetary resources from consumption taxes. 11. The accession of new Member States on 1 May 2004 and on 1 January 2007 did not alter the situation regarding the standard rate. That still ranges from 15% to 25% in 27 Member States. Two Member States (Cyprus and Luxembourg) apply a 15% rate and three a 25% rate (Denmark, Hungary and Sweden). 12. In these circumstances, it therefore appears appropriate to maintain the principle of a minimum standard VAT rate of 15%, and to propose that the current arrangements be extended. 13. To give businesses necessary legal certainty, and allow further evaluation of the appropriate level of the standard VAT rate at EU level, it seems appropriate to extend the provision for another five years, while the Commission reflects on a new VAT strategy and re-examines the standard VAT rate appropriate for a common approach. 14. Since the application of the minimum standard rate under Article 97(1) of Directive 2006/112/EC expires on 31 December 2010, the object of this proposal is to enable the Council to extend the period during which this rate applies. The minimum standard VAT rate is therefore set at 15% for five years from 1 January 2011 to 31 December 2015. The Commission would also expect the Council to renew the statement for the minutes agreed earlier on the span between the lowest and highest rates applied for that same period.
Revised version (Article 69 ):
In the case of the intra-Community acquisition of goods, VAT shall become chargeable on issue of the invoice, or on expiry of the time limit referred to in the first paragraph of Article 222 if no invoice has been issued by that time.
Article 70 
The chargeable event shall occur and VAT shall become chargeable when the goods are imported.
Article 71 
1. Where, on entry into the Community, goods are placed under one of the arrangements or situations referred to in Articles 156, 276 and 277, or under temporary importation arrangements with total exemption from import duty, or under external transit arrangements, the chargeable event shall occur and VAT shall become chargeable only when the goods cease to be covered by those arrangements or situations. However, where imported goods are subject to customs duties, to agricultural levies or to charges having equivalent effect established under a common policy, the chargeable event shall occur and VAT shall become chargeable when the chargeable event in respect of those duties occurs and those duties become chargeable. 2. Where imported goods are not subject to any of the duties referred to in the second subparagraph of paragraph 1, Member States shall, as regards the chargeable event and the moment when VAT becomes chargeable, apply the provisions in force governing customs duties.
Article 72 
For the purposes of this Directive, ‘open market value’ shall mean the full amount that, in order to obtain the goods or services in question at that time, a customer at the same marketing stage at which the supply of goods or services takes place, would have to pay, under conditions of fair competition, to a supplier at arm's length within the territory of the Member State in which the supply is subject to tax. Where no comparable supply of goods or services can be ascertained, ‘open market value’ shall mean the following: (1) in respect of goods, an amount that is not less than the purchase price of the goods or of similar goods or, in the absence of a purchase price, the cost price, determined at the time of supply; (2) in respect of services, an amount that is not less than the full cost to the taxable person of providing the service.
Article 73 
In respect of the supply of goods or services, other than as referred to in Articles 74 to 77, the taxable amount shall include everything which constitutes consideration obtained or to be obtained by the supplier, in return for the supply, from the customer or a third party, including subsidies directly linked to the price of the supply.
Article 74 
Where a taxable person applies or disposes of goods forming part of his business assets, or where goods are retained by a taxable person, or by his successors, when his taxable economic activity ceases, as referred to in Articles 16 and 18, the taxable amount shall be the purchase price of the goods or of similar goods or, in the absence of a purchase price, the cost price, determined at the time when the application, disposal or retention takes place.
Article 75 
In respect of the supply of services, as referred to in Article 26, where goods forming part of the assets of a business are used for private purposes or services are carried out free of charge, the taxable amount shall be the full cost to the taxable person of providing the services.
Article 76 
In respect of the supply of goods consisting in transfer to another Member State, the taxable amount shall be the purchase price of the goods or of similar goods or, in the absence of a purchase price, the cost price, determined at the time the transfer takes place.
Article 77 
In respect of the supply by a taxable person of a service for the purposes of his business, as referred to in Article 27, the taxable amount shall be the open market value of the service supplied.
Article 78 
The taxable amount shall include the following factors: (a) taxes, duties, levies and charges, excluding the VAT itself; (b) incidental expenses, such as commission, packing, transport and insurance costs, charged by the supplier to the customer. For the purposes of point (b) of the first paragraph, Member States may regard expenses covered by a separate agreement as incidental expenses.
Article 79 
The taxable amount shall not include the following factors: (a) price reductions by way of discount for early payment; (b) price discounts and rebates granted to the customer and obtained by him at the time of the supply; (c) amounts received by a taxable person from the customer, as repayment of expenditure incurred in the name and on behalf of the customer, and entered in his books in a suspense account. The taxable person must furnish proof of the actual amount of the expenditure referred to in point (c) of the first paragraph and may not deduct any VAT which may have been charged.
Article 80 
1. In order to prevent tax evasion or avoidance, Member States may in any of the following cases take measures to ensure that, in respect of the supply of goods or services involving family or other close personal ties, management, ownership, membership, financial or legal ties as defined by the Member State, the taxable amount is to be the open market value: (a) where the consideration is lower than the open market value and the recipient of the supply does not have a full right of deduction under Articles 167 to 171 and Articles 173 to 177; (b) where the consideration is lower than the open market value and the supplier does not have a full right of deduction under Articles 167 to 171 and Articles 173 to 177 and the supply is subject to an exemption under Articles 132, 135, 136, 371, 375, 376, 377, 378(2), 379(2) or Articles 380 to 390b ; (c) where the consideration is higher than the open market value and the supplier does not have a full right of deduction under Articles 167 to 171 and Articles 173 to 177. For the purposes of the first subparagraph, legal ties may include the relationship between an employer and employee or the employee's family, or any other closely connected persons. 2. Where Member States exercise the option provided for in paragraph 1, they may restrict the categories of suppliers or recipients to whom the measures shall apply. 3. Member States shall inform the VAT Committee of national legislative measures adopted pursuant to paragraph 1 in so far as these are not measures authorised by the Council prior to 13 August 2006 in accordance with Article 27 (1) to (4) of Directive 77/388/EEC, and which are continued under paragraph 1 of this Article.
Amendment rationale: CONTEXT OF THE PROPOSAL With Decision 2012/419/EU amending the status of Mayotte with regard to the European Union, the European Council has decided that, from 1 January 2014, the status of Mayotte will be that of outermost region within the meaning of Article 349 of the Treaty on the Functioning of the European Union (TFEU) instead of that of an overseas country or territory (OCT) within the meaning of Article 355(2) of the TFEU. To this end, in the above-mentioned European Council Decision, Mayotte has been added to the list of outermost regions in Articles 349 and 355(1) of the TFEU. Union legislation on VAT (Directive 2006/112/EC[1]) and excise duties (Directive 2008/118/EC[2]) will therefore apply in Mayotte after the change of status. In substance, the objective of this proposal is to bring Mayotte's situation into line with that of other French outermost regions by excluding it from the scope of Directives 2006/112/EC and 2008/118/EC. Furthermore, by referring to Articles 349 and 355(1) of the TFEU, the intention is to make it clearer that all these regions, including Mayotte, are excluded from the scope of these Directives.
Revised version (Article 80 ):
1. In order to prevent tax evasion or avoidance, Member States may in any of the following cases take measures to ensure that, in respect of the supply of goods or services involving family or other close personal ties, management, ownership, membership, financial or legal ties as defined by the Member State, the taxable amount is to be the open market value: (a) where the consideration is lower than the open market value and the recipient of the supply does not have a full right of deduction under Articles 167 to 171 and Articles 173 to 177; (b) where the consideration is lower than the open market value and the supplier does not have a full right of deduction under Articles 167 to 171 and Articles 173 to 177 and the supply is subject to an exemption under Articles 132, 135, 136, 371, 375, 376, 377, 378(2), 379(2) or Articles 380 to 390c; (c) where the consideration is higher than the open market value and the supplier does not have a full right of deduction under Articles 167 to 171 and Articles 173 to 177. For the purposes of the first subparagraph, legal ties may include the relationship between an employer and employee or the employee's family, or any other closely connected persons. 2. Where Member States exercise the option provided for in paragraph 1, they may restrict the categories of suppliers or recipients to whom the measures shall apply. 3. Member States shall inform the VAT Committee of national legislative measures adopted pursuant to paragraph 1 in so far as these are not measures authorised by the Council prior to 13 August 2006 in accordance with Article 27 (1) to (4) of Directive 77/388/EEC, and which are continued under paragraph 1 of this Article.
Article 81 
Member States which, at 1 January 1993, were not availing themselves of the option under Article 98 of applying a reduced rate may, if they avail themselves of the option under Article 89, provide that in respect of the supply of works of art, as referred to in Article 103(2), the taxable amount is to be equal to a fraction of the amount determined in accordance with Articles 73, 74, 76, 78 and 79. The fraction referred to in the first paragraph shall be determined in such a way that the VAT thus due is equal to at least 5 % of the amount determined in accordance with Articles 73, 74, 76, 78 and 79.
Amendment rationale: CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal The purpose of the current proposal for a Directive amending Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax 1 (hereafter the ‘ VAT Directive ’ ) is to prolong: 1) the possibility for Member States to apply the reverse charge mechanism to combat existing fraud in supplies of goods and services included in Article 199a(1) of the VAT Directive and 2) the possibility to use the Quick Reaction Mechanism (QRM) , as set out in Article 199b of the VAT Directive , to combat fraud via the application of the reverse charge mechanism in very specific cases . As a general rule, Article 193 of the VAT Directive stipulates that the taxable person supplying goods or services is liable to pay VAT. As a derogation, the reverse charge mechanism allows to designate the recipient of the supply as the person liable for the payment of VAT. Under this reverse charge mechanism, VAT is not charged by the supplier but accounted for by the customer (a taxable person) in his VAT return. This VAT is then deducted in that same VAT return and, therefore, insofar this person has a full right of deduction, the result is nil. The reverse charge mechanism is used to combat fraud and in particular Missing Trader Intra-Community (MTIC) fraud. This type of fraud occurs when a trader acquires goods, transported or dispatched from another Member State, by means of a supply exempt from VAT, and sells them on including VAT on the invoice to the customer. After having received the VAT amount from the customer such trader disappears before paying the VAT due to the tax authorities. At the same time, the customer acting in good faith can normally deduct the VAT he paid to the supplier through his VAT return. Hence, under the reverse charge mechanism VAT is not effectively paid to the supplier. The reverse charge mechanism based on Article 199a o f the VAT Directive is optional for Member States to apply. It allows them to fight this type of fraud in the pre-defined sensitive areas where it typically occurs 2 on their territory . Once suppliers are obliged to use the reverse charge mechanism for such domestic supplies, t he y cann ot charge VAT on their invoice. They will subsequently not receive the VAT amount from their customer and , as a result , such traders cannot disappear with the amount of VAT received. The QRM of Article 199b is an exceptional measure allowing Member States to quickly introduce , in cases of imperative urgency, a temporary reverse charge mechanism for supplies of goods and services in sectors where sudden and massive fraud occurred and which are not listed in Article 199a of the VAT Directive. This procedure is exceptional and extremely quick as the Commission has to react within one month, either with a negative opinion or to confirm in writing to the Member State concerned that it does not object the measure. The Member State may adopt the QRM special measure from the date of receipt of that confirmation. By u sing this mechanism , Member States can bridge the p eriod required for obtaining a ‘ normal ’ derogation under A rticle 395 of the VAT Directive, which can take up to six months . Such a derogation requires a proposal from the Commission and unanimous adoption by Council. Article 199a of the VAT Directive was introduced 3 for the period 2010 until 30 June 2015 and was a first time extended 4 , with amendments, until 31 December 2018. Article 199b of the VAT Directive was introduced 5 for the period 2013 until 31 December 2018. Both Article s 199a and 199b of the VAT Directive were subsequently extended 6 until 30 June 2022 in order to coincide with the initially foreseen date on which the VAT definitive system would enter into force (see more details below) . At the time the application period of Articles 199a and 199b of the VAT Directive would be extended until 30 June 2022 , the Commission presented a r eport on the effects of the mechanisms i ncluded in these articles 7 and concluded, on the basis of contributions of tax administrations and business stakeholders, that the measures in these articles were useful in the fight against fraud. In order to deal with the issue of (MTIC) fraud in a more structural manner , the Commission made a proposal for the introduction of the so-called definitive VAT system, a simpler and fraud-proof system for intra-Union trade of goods 8 . These arrangements, which the Commission proposed to enter into force on 1 July 2022, provide a fundamental response to MTIC fraud. However, the state of play of the ongoing negotiations in the Council indicates that it will not be possible for the definitive VAT system to enter into force on 1 July 2022. In order to allow the negotiations on the definitive system to continue, without putting at risk the available tools in order to combat VAT fraud, it is appropriate to prolong the anti-fraud measures contained in the said articles for another limited period. To extend the application period of Articles 199a and 199b would also allow developing further tools to fight tax evasion. To that end, and in accordance with the Tax Package 9 , the C ommission is prepar ing a proposal in order to modernise the current VAT rules, taking into account the opportunities offered by digital technologies. Under the heading ‘VAT in the digital age’, the Commission will assess VAT reporting obligations, possibly including on Transaction-B ased R eporting (TBR) and a n enhanced system of e-invoicing . This should provide quicker and more detailed information on individual transactions to tax administrations and therefore lower the risk of fraud . Based on such legislative developments, the need to further extend Articles 199a and 199b should be reassessed in the future. 
Revised version (Article 81 ):
Member States which, on 1 January 1993, were not availing themselves of the option under Article 98 of applying a reduced rate may, if they avail themselves of the option under Article 89, provide that in respect of the supply of works of art, as referred to in Annex III, point (26), the taxable amount is to be equal to a fraction of the amount determined in accordance with Articles 73, 74, 76, 78 and 79. The fraction referred to in the first paragraph shall be determined in such a way that the VAT thus due is equal to at least 5 % of the amount determined in accordance with Articles 73, 74, 76, 78 and 79.
Article 82 
Member States may provide that, in respect of the supply of goods and services, the taxable amount is to include the value of exempt investment gold within the meaning of Article 346, which has been provided by the customer to be used as basis for working and which as a result, loses its VAT exempt investment gold status when such goods and services are supplied. The value to be used is the open market value of the investment gold at the time that those goods and services are supplied.
Article 83 
In respect of the intra-Community acquisition of goods, the taxable amount shall be established on the basis of the same factors as are used in accordance with Chapter 2 to determine the taxable amount for the supply of the same goods within the territory of the Member State concerned. In the case of the transactions, to be treated as intra-Community acquisitions of goods, referred to in Articles 21 and 22, the taxable amount shall be the purchase price of the goods or of similar goods or, in the absence of a purchase price, the cost price, determined at the time of the supply.
Article 84 
1. Member States shall take the measures necessary to ensure that the excise duty due from or paid by the person making the intra-Community acquisition of a product subject to excise duty is included in the taxable amount in accordance with point (a) of the first paragraph of Article 78. 2. Where, after the intra-Community acquisition of goods has been made, the person acquiring the goods obtains a refund of the excise duty paid in the Member State in which dispatch or transport of the goods began, the taxable amount shall be reduced accordingly in the Member State in the territory of which the acquisition was made.
Article 85 
In respect of the importation of goods, the taxable amount shall be the value for customs purposes, determined in accordance with the Community provisions in force.
Article 86 
1. The taxable amount shall include the following factors, in so far as they are not already included: (a) taxes, duties, levies and other charges due outside the Member State of importation, and those due by reason of importation, excluding the VAT to be levied; (b) incidental expenses, such as commission, packing, transport and insurance costs, incurred up to the first place of destination within the territory of the Member State of importation as well as those resulting from transport to another place of destination within the Community, if that other place is known when the chargeable event occurs. 2. For the purposes of point (b) of paragraph 1, ‘first place of destination’ shall mean the place mentioned on the consignment note or on any other document under which the goods are imported into the Member State of importation. If no such mention is made, the first place of destination shall be deemed to be the place of the first transfer of cargo in the Member State of importation.
Amendment rationale: CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal The current initiative aims at enabling Member States to temporarily exempt the supply of COVID‑19 vaccines and in vitro diagnostic medical devices ( testing kits) as well as services closely linked to such vaccines and such devices from value added tax (VAT). It also enables Member States, as is already the case for vaccines, to apply a reduced VAT rate to COVID‑19 in vitro diagnostic medical devices and closely linked services. On 30 January 2020, the World Health Organization (WHO) declared the COVID ‑19 outbreak as a public health emergency of international concern. Then, on 11 March 2020, the WHO characterised the situation of the COVID ‑19 outbreak as a pandemic. Since the beginning of the COVID ‑19 outbreak, the European Union has taken unparalleled action to protect lives and livelihoods and limit the impact of the virus on the economy. The Union is leading the global effort for universal testing, treatment and vaccination by mobilising resources through international pledging and by joining forces with countries and global health organisations through the Access to COVID ‑19 Tools (ACT) Accelerator collaborative framework 1 . The latter was launched on 24 April 2020 by the WHO and a group of global actors. It is a call for action in a landmark global collaboration aiming at accelerating equitable global access to safe, quality, effective, and affordable COVID‑19 diagnostics, therapeutics and vaccines. On 4 May 2020, Commission President von der Leyen launched the Coronavirus Global Response as the Union’s response to this call for action. In the Commission President’s words, “[t] he world will only be freed from this pandemic when vaccines, testing kits and treatments are available and affordable to everyone who needs them” . The pledging campaign under the Coronavirus Global Response has raised almost EUR 16 billion to date, including EUR 11.9 billion pledged by the Member States, the Commission and the European Investment Bank. On 18 September 2020, the Commission confirmed its participation in the COVAX Facility, following the announcement, on 31 August 2020, of a EUR 400 million contribution in guarantees to support COVAX and its objectives in the context of the Coronavirus Global Response. The COVAX Facility is the vaccines pillar of the ACT Accelerator and aims to speed up development and manufacture of COVID‑19 vaccines and to guarantee fair and equitable access for every country in the world. It is co-led by Gavi, the Vaccine Alliance, the Coalition for Epidemic Preparedness Innovations (CEPI) and WHO. As part of the effort to help protect people everywhere in the world, and in the Union in particular, the Commission put forward on 17 June 2020 an EU strategy for COVID ‑19 vaccines 2 . The proposed EU approach to secure vaccines for EU people complements the Union’s action for universal access to affordable coronavirus vaccination, treatment and testing. The aim is to accelerate the development, manufacturing and deployment of vaccines against the virus and make sure that in the fight against COVID ‑19 no one in the Union is left behind. The EU vaccine strategy has among its objectives to ensure equitable and affordable access to the supplies of COVID‑19 vaccines for all EU people as early as possible. Generally, an effective and safe vaccine against COVID‑19 is seen as the most likely permanent solution to the pandemic, as it will facilitate control of COVID‑19 disease and will reduce mortality. However, there is no guarantee that such vaccine will be available soon. Therefore, the development and deployment of COVID‑19 in vitro diagnostic medical devices remain crucial. The Commission will implement the EU strategy for COVID‑19 vaccines together with the Member States. This increases the likelihood that all in the EU, as well as in the European Economic Area (EEA), gain equitable and affordable access to those vaccines in the shortest possible period. An important step towards joint action between Member States has been taken by the creation of an inclusive Vaccine Alliance by France, Germany, Italy, and the Netherlands. This alliance was formed to pool the national resources of those countries and secure fair access to vaccine supplies for the European population. The Union will materialise its strategy for COVID ‑19 vaccines in two ways. First, by securing sufficient production of vaccines in the EU - and thereby sufficient supplies for its Member States - through Advance Purchase Agreements (APAs) with vaccine producers. The related funding will come from the Emergency Support Instrument (ESI 3 ). Second, by making use of existing regulatory, financial, advisory and other tools at its disposal while adapting the Union’s regulatory framework to the current urgency. The contracts with vaccine producing companies will be concluded through a procurement process run by the Commission on behalf of all participating Member States. Once any of the vaccines supported proves successful, Member States will be able to acquire that vaccine directly from the producer based on the conditions laid down in the APA. As the ultimate acquirers of the vaccines, Member States will participate in the process from the outset. In the framework of the EU vaccine strategy, the Commission already concluded agreements to purchase potential COVID ‑19 vaccines with some pharmaceutical companies, while exploratory talks intended to result in APAs have been concluded or will be conducted with others. On 30 September 2020, the WHO issued a draft landscape document of COVID ‑19 candidate vaccines 4 , listing 41 candidate vaccines in clinical evaluation. Since the emergence of the COVID‑19 pandemic and awaiting a vaccine, healthcare professionals have created numerous tests. These tests detect either the presence of the virus or the presence of antibodies against the virus. The most common COVID‑19 tests marketed on the European market are as follows: · Nucleic acid test (e.g. PCR), primarily involving a swab of the nose and throat. The presence of the virus is then detected in the sample taken. · Antigen test, also involving a swab of the nose and throat. This test also detects the presence of the virus. – There are “rapid” antigen tests, where the sample is placed on a plate and the result appears after a few minutes. – There are also ELISA (enzyme-linked immunosorbent assay) or “ELISA-like” tests which are more complex but offer a more reliable and qualitative method. · Antibody test (IgG/IgM/IgA) via a blood sample. This test makes it possible to detect antibodies against the virus in the sample taken. Antibody tests can also be performed via “rapid” tests, or via ELISA or “ELISA-like” tests. Member States are responsible for the strategy and criteria to determine which people are tested and what types of COVID‑19 in vitro diagnostic medical devices are deployed. In the face of the COVID ‑19 pandemic, the Commission has taken exceptional measures in the area of VAT to help victims of the outbreak. On 3 April 2020, the Commission adopted Decision (EU) 2020/491 5 enabling Member States to temporarily exempt from VAT (and relieve from customs duties) vital goods needed to combat the effects of the COVID ‑19 o utbreak (covering among other personal protective equipment, in vitro diagnostic medical devices, medical devices such as ventilators and a limited number of medicines 6 ) . This decision covers only importation and not intra-Community or domestic supplies, because the autonomous powers of the Commission are limited to this field. The initial measure applied for a period of six months, and was further extended by three months until 31 October 2020 7 . A further prolongation until the end of April 2021 has been decided. The current VAT rules contain two main tools that already allow Member States to alleviate the cost of COVID‑19 vaccines and in vitro diagnostic medical devices. First, Council Directive 2006/112/EC 8 (the VAT Directive) provides exemptions without deductibility for hospital and medical care 9 . The objective of those exemptions is to reduce the cost of medical care and to make it more accessible to individuals. Preventive medical care, e.g. when the person concerned is not suffering from any disease or health disorder, may fall under the exemption. This would apply with regard to COVID ‑19 vaccination and testing supplied by way of hospital and medical care. However, the existing exemption would not apply to the supply of COVID ‑19 vaccines and in vitro diagnostic medical devices - including services closely linked thereto - to hospitals, medical practitioners, centres for medical treatment or diagnosis and other duly recognised establishments of a similar nature. They would thus be burdened with the VAT cost when acquiring such vaccines and in vitro diagnostic medical devices. Hence, although COVID‑19 vaccination and testing supplied in the context of hospital and medical care would be exempt from VAT, supplies of such vaccines and in vitro diagnostic medical devices acquired by hospitals, medical practitioners, centres for medical treatment or diagnosis and other duly recognised establishments of a similar nature would not be covered by this exemption. Therefore, the VAT burden would remain for those. Second, u nder the current VAT rules, Member States may apply a reduced (that is, no lower than 5%) VAT rate to “ pharmaceutical products normally used for health care, prevention of illnesses and as treatment for medical […] purposes ” 10 . The concept of "pharmaceutical products" is not defined in the VAT Directive but has always been understood to cover pharmaceutical products as defined by the Combined Nomenclature 11 . The pharmaceutical products contained in the Combined Nomenclature (Chapter 30) include vaccines. Therefore, vaccines are currently eligible for reduced VAT rates. Moreover, based on historical standstill derogations, certain Member States may continue to apply super-reduced rates (namely lower than 5%) or exemptions with the deductibility of the VAT paid at the preceding stage (zero rate) to pharmaceutical products, including vaccines. However, there is no general provision in the VAT Directive allowing a zero rate to pharmaceutical products that could apply in the case of COVID ‑19 vaccines. In contrast to vaccines, the general VAT rules of the VAT Directive would not allow reduced rates to apply to COVID ‑19 in vitro diagnostic medical devices 12 . Moreover, while Decision (EU) 2020/491 enabled Member States to temporarily exempt from VAT the importation of in vitro diagnostic medical devices among other, there is no explicit provision in the EU VAT rules allowing to exempt from VAT the intra-Community and domestic supply of such devices. In conclusion, although the current VAT rules allow partly alleviating the cost of COVID ‑19 vaccination and testing, they do not permit the application of a zero rate to such vaccines and services closely linked thereto. Likewise, they do not permit the application of either a reduced or a zero rate to in vitro diagnostic medical devices, including services closely linked thereto. The 2018 Commission proposal 13 to amend the VAT Directive as regards VAT rates, which is pending before the Council, could provide a satisfactory solution in lifting VAT from the overall supply of COVID ‑19 vaccination and testing. If adopted unanimously by Council , it would allow Member States to apply a reduced rate or even a zero rate to supplies of COVID ‑19 vaccines and in vitro diagnostic medical devices, including services closely linked thereto, if such supplies benefit only the final consumer and pursue an objective of general interest. However, there is a need for immediate action in fighting the pandemic. Given the urgency, a swift adaptation of the EU VAT rules is necessary in order to ensure that COVID‑19 vaccines and in vitro diagnostic medical devices become more affordable for Europeans by reducing their cost of provision by the health system, thus enhancing the potential for COVID‑19 prevention and screening in the Union. This is a prerequisite for ensuring that full societal and economic activity may be restored in the near term. It is imperative that such measure be of temporary character with the aim to exempt from VAT the supply of COVID‑19 vaccines and in vitro diagnostic medical devices while also allowing a reduced VAT rate for the latter. This measure should remain in place until the COVID‑19 health crisis comes to an end. In concrete terms, the measure in question should not go beyond 31 December 2022. Before the end of this period, the situation will be reviewed and, if necessary, the period of application of the measure may be extended. Pursuant to Article 94(2) of the VAT Directive, the potential reduced rate and the VAT exemption in the form of zero rate applied to the above supplies within the territory of a Member State will also be applicable to the intra-Community supply to or importation into that Member State of COVID‑19 vaccines and in vitro diagnostic medical devices. 
Revised version (Article 86 ):
1. The taxable amount shall include the following factors, in so far as they are not already included: (a) taxes, duties, levies and other charges due outside the Member State of importation, and those due by reason of importation, excluding the VAT to be levied; (b) incidental expenses, such as commission, packing, transport and insurance costs, incurred up to the first place of destination within the territory of the Member State of importation as well as those resulting from transport to another place of destination within the Community, if that other place is known when the chargeable event occurs. The taxable amount shall include the following factors, in so far as they are not already included: (a) taxes, duties, levies and other charges due outside the Member State of importation, and those due by reason of importation, excluding the VAT to be levied; (b) incidental expenses, such as commission, packing, transport and insurance costs, incurred up to the first place of destination within the territory of the Member State of importation as well as those resulting from transport to another place of destination within the Community, if that other place is known when the chargeable event occurs. 2. For the purposes of point (b) of paragraph 1, ‘first place of destination’ shall mean the place mentioned on the consignment note or on any other document under which the goods are imported into the Member State of importation. If no such mention is made, the first place of destination shall be deemed to be the place of the first transfer of cargo in the Member State of importation.
Article 87 
The taxable amount shall not include the following factors: (a) price reductions by way of discount for early payment; (b) price discounts and rebates granted to the customer and obtained by him at the time of importation.
Article 88 
Where goods temporarily exported from the Community are re-imported after having undergone, outside the Community, repair, processing, adaptation, making up or re-working, Member States shall take steps to ensure that the tax treatment of the goods for VAT purposes is the same as that which would have been applied had the repair, processing, adaptation, making up or re-working been carried out within their territory.
Article 89 
Member States which, at 1 January 1993, were not availing themselves of the option under Article 98 of applying a reduced rate may provide that in respect of the importation of works of art, collectors' items and antiques, as defined in points (2), (3) and (4) of Article 311(1), the taxable amount is to be equal to a fraction of the amount determined in accordance with Articles 85, 86 and 87. The fraction referred to in the first paragraph shall be determined in such a way that the VAT thus due on the importation is equal to at least 5 % of the amount determined in accordance with Articles 85, 86 and 87.
Article 90 
1. In the case of cancellation, refusal or total or partial non-payment, or where the price is reduced after the supply takes place, the taxable amount shall be reduced accordingly under conditions which shall be determined by the Member States. 2. In the case of total or partial non-payment, Member States may derogate from paragraph 1.
Article 91 
1. Where the factors used to determine the taxable amount on importation are expressed in a currency other than that of the Member State in which assessment takes place, the exchange rate shall be determined in accordance with the Community provisions governing the calculation of the value for customs purposes. 2. Where the factors used to determine the taxable amount of a transaction other than the importation of goods are expressed in a currency other than that of the Member State in which assessment takes place, the exchange rate applicable shall be the latest selling rate recorded, at the time VAT becomes chargeable, on the most representative exchange market or markets of the Member State concerned, or a rate determined by reference to that or those markets, in accordance with the rules laid down by that Member State. However, for some of the transactions referred to in the first subparagraph or for certain categories of taxable persons, Member States may use the exchange rate determined in accordance with the Community provisions in force governing the calculation of the value for customs purposes.
Amendment rationale: CONTEXT OF THE PROPOSAL 1. Article 97(1) of Directive 2006/112/EC of 28 November 2006 on the common system of value added tax[1] (hereinafter "the VAT Directive") provides that from 1 January 2006 until 31 December 2010 the standard rate may not be less than 15% and Article 97(2) stipulates that the Council shall decide, in accordance with Article 93 of the Treaty, on the level of the standard rate of value added tax (VAT) to be applied after 31 December 2010. 2. This provision was based on Article 93 of the Treaty establishing the European Community (the EC Treaty). As from 1 December 2009, Article 93 of the EC Treaty is replaced by Article 113 of the Treaty on the Functioning of the European Union (TFEU). Article 113 TFEU stipulates that the Council shall, acting unanimously in accordance with a special legislative procedure and after consulting the European Parliament and the Economic and Social Committee, adopt provisions for the harmonisation of legislation concerning turnover taxes to the extent that such harmonisation is necessary to ensure the establishment and functioning of the internal market and to avoid distortion of competition. 3. With a view to establishing the internal market on 1 January 1993, the Commission presented proposals intended to set up a definitive system of tax harmonisation. 4. However, when it became clear that it would be impossible to adopt the Commission's proposals before 1 January 1993, the Council decided to adopt a transitional system. With regard to VAT rates, it adopted Directive 92/77/EEC[2]. 5. That Directive introduced a system of minimum rates. It stipulated that from 1 January 1993 to 31 December 1996, the standard rate could not be set lower than 15%. This provision has been extended four times and applies until 31 December 2010. 6. To maintain the degree of harmonisation of rates already achieved, the Commission has twice presented proposals providing for a standard rate band with a minimum rate of 15% and a maximum rate of 25%[3]. The band was derived from the rates applied in practice in Member States, where standard rates have always varied between 15% and 25%. 7. In both cases, the proposals to approximate rates were amended by the Council,[4] which kept only the principle of a minimum rate, referring to a 15% minimum rate comparable to the system introduced by the 1992 Directive. 8. However, these Council Directives were adopted with a statement for the Council minutes mentioning Member States' efforts to avoid widening the 10 percentage point span between the lowest and highest rates applied. This demonstrates the continued concerns of Member States about distortions between high and low rate countries and the possible budgetary effects of different levels of VAT rates. In the light of the current economic crisis, there are further arguments for keeping a minimum standard rate to be laid down in the VAT Directive. 9. Despite various improvements to the common VAT system based on the Commission's pragmatic, phased VAT strategy launched in 2000[5] and updated in 2003[6], the VAT system continues to suffer from shortcomings and high administrative burdens. This means it needs to be fundamentally reassessed. New economic realities, technological processes, fraud patterns etc. also give rise to new challenges. That is why the Commission plans to publish a consultative green paper soon on a new VAT strategy. This will launch a consultation on future tax harmonisation. Only in the light of the outcome of that process can an appropriate decision be taken on the level of standard rates of VAT in the EU. 10. Moreover, recent modifications to the VAT Directive[7] have favoured taxation at the place of consumption, as this results in fewer possibilities for cross-border transactions seeking lower VAT rates, leading to distortions of competition. However, it remains important to prevent growing divergence in standard VAT rates applied by Member States from leading to structural imbalances in the EU and distortions of competition in some sectors of activity. To this end, it is common practice in the field of indirect taxes, both for excise duties and VAT, to set minimum rates. Although no maximum rate is proposed, the span between the standard rates applied in the Member States can – as is currently the case – be expected to ensure the proper functioning of the internal market while acknowledging the possible need for new budgetary resources from consumption taxes. 11. The accession of new Member States on 1 May 2004 and on 1 January 2007 did not alter the situation regarding the standard rate. That still ranges from 15% to 25% in 27 Member States. Two Member States (Cyprus and Luxembourg) apply a 15% rate and three a 25% rate (Denmark, Hungary and Sweden). 12. In these circumstances, it therefore appears appropriate to maintain the principle of a minimum standard VAT rate of 15%, and to propose that the current arrangements be extended. 13. To give businesses necessary legal certainty, and allow further evaluation of the appropriate level of the standard VAT rate at EU level, it seems appropriate to extend the provision for another five years, while the Commission reflects on a new VAT strategy and re-examines the standard VAT rate appropriate for a common approach. 14. Since the application of the minimum standard rate under Article 97(1) of Directive 2006/112/EC expires on 31 December 2010, the object of this proposal is to enable the Council to extend the period during which this rate applies. The minimum standard VAT rate is therefore set at 15% for five years from 1 January 2011 to 31 December 2015. The Commission would also expect the Council to renew the statement for the minutes agreed earlier on the span between the lowest and highest rates applied for that same period.
Revised version (Article 91 ):
1. Where the factors used to determine the taxable amount on importation are expressed in a currency other than that of the Member State in which assessment takes place, the exchange rate shall be determined in accordance with the Community provisions governing the calculation of the value for customs purposes. 2. Where the factors used to determine the taxable amount of a transaction other than the importation of goods are expressed in a currency other than that of the Member State in which assessment takes place, the exchange rate applicable shall be the latest selling rate recorded, at the time VAT becomes chargeable, on the most representative exchange market or markets of the Member State concerned, or a rate determined by reference to that or those markets, in accordance with the rules laid down by that Member State. Member States shall accept instead the use of the latest exchange rate published by the European Central Bank at the time the tax becomes chargeable. Conversion between currencies other than the euro shall be made by using the euro exchange rate of each currency. Member States may require that they be notified of the exercise of this option by the taxable person. However, for some of the transactions referred to in the first subparagraph or for certain categories of taxable persons, Member States may use the exchange rate determined in accordance with the Community provisions in force governing the calculation of the value for customs purposes.
Article 92 
As regards the costs of returnable packing material, Member States may take one of the following measures: (a) exclude them from the taxable amount and take the measures necessary to ensure that this amount is adjusted if the packing material is not returned; (b) include them in the taxable amount and take the measures necessary to ensure that this amount is adjusted if the packing material is in fact returned.
Article 93 
The rate applicable to taxable transactions shall be that in force at the time of the chargeable event. However, in the following situations, the rate applicable shall be that in force when VAT becomes chargeable: (a) in the cases referred to in Articles 65 and 66; (b) in the case of an intra-Community acquisition of goods; (c) in the cases, concerning the importation of goods, referred to in the second subparagraph of Article 71(1) and in Article 71(2).
Article 94 
1. The rate applicable to the intra-Community acquisition of goods shall be that applied to the supply of like goods within the territory of the Member State. 2. Subject to the option under Article 103(1) of applying a reduced rate to the importation of works of art, collectors' items or antiques, the rate applicable to the importation of goods shall be that applied to the supply of like goods within the territory of the Member State.
Article 95 
Where rates are changed, Member States may, in the cases referred to in Articles 65 and 66, effect adjustments in order to take account of the rate applying at the time when the goods or services were supplied. Member States may also adopt all appropriate transitional measures.
Article 96 
Member States shall apply a standard rate of VAT, which shall be fixed by each Member State as a percentage of the taxable amount and which shall be the same for the supply of goods and for the supply of services.
Article 97 
1. From 1 January 2006 until 31 December 2010, the standard rate may not be less than 15 %. 2. The Council shall decide, in accordance with Article 93 of the Treaty, on the level of the standard rate to be applied after 31 December 2010.
Amendment rationale: CONTEXT OF THE PROPOSAL With Decision 2012/419/EU amending the status of Mayotte with regard to the European Union, the European Council has decided that, from 1 January 2014, the status of Mayotte will be that of outermost region within the meaning of Article 349 of the Treaty on the Functioning of the European Union (TFEU) instead of that of an overseas country or territory (OCT) within the meaning of Article 355(2) of the TFEU. To this end, in the above-mentioned European Council Decision, Mayotte has been added to the list of outermost regions in Articles 349 and 355(1) of the TFEU. Union legislation on VAT (Directive 2006/112/EC[1]) and excise duties (Directive 2008/118/EC[2]) will therefore apply in Mayotte after the change of status. In substance, the objective of this proposal is to bring Mayotte's situation into line with that of other French outermost regions by excluding it from the scope of Directives 2006/112/EC and 2008/118/EC. Furthermore, by referring to Articles 349 and 355(1) of the TFEU, the intention is to make it clearer that all these regions, including Mayotte, are excluded from the scope of these Directives.
Revised version (Article 97 ):
From 1 January 2011 until 31 December 2015, the standard rate may not be lower than 15 %.
Article 98 
1. Member States may apply either one or two reduced rates. 2. The reduced rates shall apply only to supplies of goods or services in the categories set out in Annex III. The reduced rates shall not apply to electronically supplied services. 3. When applying the reduced rates provided for in paragraph 1 to categories of goods, Member States may use the Combined Nomenclature to establish the precise coverage of the category concerned.
Amendment rationale: CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal Value added tax (VAT) is a general consumption tax borne ultimately by the final consumer but collected by businesses supplying goods or services. The scope of VAT, as set out in Article 2 of the VAT Directive 1 , is very broad, covering any supply of goods and services for consideration by a taxable person within the territory of a Member State and any importation of goods into the European Union (EU). One of the aims of the VAT Directive was to draw up a common list of VAT exemptions so that EU own resources could be collected in a uniform manner in all Member States 2 . That is why the exemption of any transaction from VAT requires a specific provision in the VAT Directive. The VAT Directive does not provide for any general exemption for the supply of goods or services for security and defence purposes. In principle, goods or services supplied to, or goods imported by, armed forces will therefore carry VAT 3 . The cost of VAT is reflected in an increase in the revenues that the tax generates for the state treasury (as public bodies, the military forces are unable to recuperate such VAT), which in turn feed into the budget that finances activities such as national defence. The Directive does provide for an exemption for supplies to the armed forces of any state party to the North Atlantic Treaty that are taking part in a common defence effort outside their own state. This exemption was established to address situations in which the circle of revenue and expenditure flow is broken, because VAT on such supplies would normally constitute revenue for the state in which the armed forces are located, rather than their own. The Excise Directive 4 provides for a similar exemption from excise duty 5 for movements of excise goods to the armed forces of any North Atlantic Treaty Organisation (NATO) member. While NATO defence effort has been covered by the VAT Directive since 1977 6 and the Excise Directive since 1993, neither of the exemptions covers supplies linked to the common defence effort within the Union framework, because there is as yet no common Union defence policy. However, the common security and defence policy (CSDP), which was established as the European security and defence policy (ESDP) in 2000 7 , is a key instrument for external action and includes the progressive framing of a common Union defence policy 8 . The Lisbon Treaty, which came into force in December 2009, was a milestone in the development of the CSDP. The Treaty on European Union (TEU), as amended by the Lisbon Treaty, includes a mutual assistance clause 9 and allowed Member States to strengthen their cooperation in military matters through ‘permanent structured cooperation’ (PESCO) 10 . The Lisbon Treaty also established the European External Action Service (EEAS), which assists the High Representative of the Union for Foreign Affairs and Security Policy in all her responsibilities, including the CSDP. The fact that the High Representative is also one of the Vice-Presidents of the Commission facilitates the bringing together of all necessary EU assets and the application of a comprehensive approach to EU crisis management. The EU Military Committee (EUMC), which was set up in 2001 11 , is the Council’s highest military body. It directs all military activities within the EU framework and advises on the planning and execution of military missions and operations under the CSDP, and on the development of military capabilities. Also established in 2001 12 and working under the military direction of the EUMC, the European Union Military Staff (EUMS) is the source of the EU’s military expertise 13 . It provides early warning, situation assessment and strategic planning for missions and tasks referred to in Articles 42(1) and 43(1) TEU. It also contributes to the elaboration, assessment and review of the capability goals. In June 2016, the global strategy for the European Union’s foreign and security policy (EUGS) 14 laid the ground for developing CSDP further towards three core priorities: responding to external conflicts and crises, building the capabilities of partners and protecting the Union and its citizens. In December 2017 15 , the European Council invited the High Representative, the Commission and the Member States to bring forward work on military mobility, both under PESCO and in the context of EU NATO cooperation. In March 2018, as a follow-up to their November 2017 Joint Communication on improving military mobility in the EU 16 , the Commission and the High Representative presented a Joint Communication on the action plan on military mobility 17 . The action plan recognises the need for equal treatment of defence efforts with a view to reducing administrative burden and thus delays and costs in military mobility, and providing Member States with an incentive to cooperate 18 . It requires the Commission to assess the feasibility of aligning the VAT treatment of defence efforts in the EU framework and under the NATO umbrella. On 19 November 2018, the Council concluded on Security and Defence in the context of the EUGS 19 . The Council welcomed the substantive progress made in the area of security and defence during the previous two years and stressed the importance of keeping the momentum through the continued engagement of the Member States and EU institutions. In particular, the Council welcomed the progress in the implementation of PESCO and the ongoing implementation of efforts to improve the mobility of military personnel, materiel and equipment for routine activities and during crisis and conflict, within and beyond the EU. In line with the action plan and the Council conclusions, the objective of this proposal is to align the VAT treatment of defence efforts in the EU and NATO frameworks as far as is feasible. The proposal has to acknowledge that, while there is a collective defence effort under the North Atlantic Treaty, no common Union defence policy exists as yet. The arrangements for exemptions from excise duties, as provided for in the Excise Directive, should be aligned in a similar way.
Revised version (Article 98 ):
1. Member States may apply either one or two reduced rates. 2. The reduced rates shall apply only to supplies of goods or services in the categories set out in Annex III. The reduced rates shall not apply to electronically supplied services with the exception of those falling under point (6) of Annex III. 3. When applying the reduced rates provided for in paragraph 1 to categories of goods, Member States may use the Combined Nomenclature to establish the precise coverage of the category concerned.
Article 99 
1. The reduced rates shall be fixed as a percentage of the taxable amount, which may not be less than 5 %. 2. Each reduced rate shall be so fixed that the amount of VAT resulting from its application is such that the VAT deductible under Articles 167 to 171 and Articles 173 to 177 can normally be deducted in full.
Amendment rationale: CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal Value added tax (VAT) is a general consumption tax borne ultimately by the final consumer but collected by businesses supplying goods or services. The scope of VAT, as set out in Article 2 of the VAT Directive 1 , is very broad, covering any supply of goods and services for consideration by a taxable person within the territory of a Member State and any importation of goods into the European Union (EU). One of the aims of the VAT Directive was to draw up a common list of VAT exemptions so that EU own resources could be collected in a uniform manner in all Member States 2 . That is why the exemption of any transaction from VAT requires a specific provision in the VAT Directive. The VAT Directive does not provide for any general exemption for the supply of goods or services for security and defence purposes. In principle, goods or services supplied to, or goods imported by, armed forces will therefore carry VAT 3 . The cost of VAT is reflected in an increase in the revenues that the tax generates for the state treasury (as public bodies, the military forces are unable to recuperate such VAT), which in turn feed into the budget that finances activities such as national defence. The Directive does provide for an exemption for supplies to the armed forces of any state party to the North Atlantic Treaty that are taking part in a common defence effort outside their own state. This exemption was established to address situations in which the circle of revenue and expenditure flow is broken, because VAT on such supplies would normally constitute revenue for the state in which the armed forces are located, rather than their own. The Excise Directive 4 provides for a similar exemption from excise duty 5 for movements of excise goods to the armed forces of any North Atlantic Treaty Organisation (NATO) member. While NATO defence effort has been covered by the VAT Directive since 1977 6 and the Excise Directive since 1993, neither of the exemptions covers supplies linked to the common defence effort within the Union framework, because there is as yet no common Union defence policy. However, the common security and defence policy (CSDP), which was established as the European security and defence policy (ESDP) in 2000 7 , is a key instrument for external action and includes the progressive framing of a common Union defence policy 8 . The Lisbon Treaty, which came into force in December 2009, was a milestone in the development of the CSDP. The Treaty on European Union (TEU), as amended by the Lisbon Treaty, includes a mutual assistance clause 9 and allowed Member States to strengthen their cooperation in military matters through ‘permanent structured cooperation’ (PESCO) 10 . The Lisbon Treaty also established the European External Action Service (EEAS), which assists the High Representative of the Union for Foreign Affairs and Security Policy in all her responsibilities, including the CSDP. The fact that the High Representative is also one of the Vice-Presidents of the Commission facilitates the bringing together of all necessary EU assets and the application of a comprehensive approach to EU crisis management. The EU Military Committee (EUMC), which was set up in 2001 11 , is the Council’s highest military body. It directs all military activities within the EU framework and advises on the planning and execution of military missions and operations under the CSDP, and on the development of military capabilities. Also established in 2001 12 and working under the military direction of the EUMC, the European Union Military Staff (EUMS) is the source of the EU’s military expertise 13 . It provides early warning, situation assessment and strategic planning for missions and tasks referred to in Articles 42(1) and 43(1) TEU. It also contributes to the elaboration, assessment and review of the capability goals. In June 2016, the global strategy for the European Union’s foreign and security policy (EUGS) 14 laid the ground for developing CSDP further towards three core priorities: responding to external conflicts and crises, building the capabilities of partners and protecting the Union and its citizens. In December 2017 15 , the European Council invited the High Representative, the Commission and the Member States to bring forward work on military mobility, both under PESCO and in the context of EU NATO cooperation. In March 2018, as a follow-up to their November 2017 Joint Communication on improving military mobility in the EU 16 , the Commission and the High Representative presented a Joint Communication on the action plan on military mobility 17 . The action plan recognises the need for equal treatment of defence efforts with a view to reducing administrative burden and thus delays and costs in military mobility, and providing Member States with an incentive to cooperate 18 . It requires the Commission to assess the feasibility of aligning the VAT treatment of defence efforts in the EU framework and under the NATO umbrella. On 19 November 2018, the Council concluded on Security and Defence in the context of the EUGS 19 . The Council welcomed the substantive progress made in the area of security and defence during the previous two years and stressed the importance of keeping the momentum through the continued engagement of the Member States and EU institutions. In particular, the Council welcomed the progress in the implementation of PESCO and the ongoing implementation of efforts to improve the mobility of military personnel, materiel and equipment for routine activities and during crisis and conflict, within and beyond the EU. In line with the action plan and the Council conclusions, the objective of this proposal is to align the VAT treatment of defence efforts in the EU and NATO frameworks as far as is feasible. The proposal has to acknowledge that, while there is a collective defence effort under the North Atlantic Treaty, no common Union defence policy exists as yet. The arrangements for exemptions from excise duties, as provided for in the Excise Directive, should be aligned in a similar way.
Revised version (Article 99 ):
1. The reduced rates shall be fixed as a percentage of the taxable amount, which may not be less than 5 %. 2. Each reduced rate shall be so fixed that the amount of VAT resulting from its application is such that the VAT deductible under Articles 167 to 171 and Articles 173 to 177 can normally be deducted in full. 3. By way of derogation from paragraphs 1 and 2 of this Article, and in addition to the rates referred to in paragraph 1 of Article 98, Member States which, on 1 January 2017, applied, in accordance with Union law, reduced rates lower than the minimum laid down in this Article or granted exemptions with deductibility of the VAT paid at the preceding stage to the supply of certain goods referred to in point (6) of Annex III, may also apply the same VAT treatment where that supply is supplied electronically, as referred to in point (6) of Annex III.
Article 100 
On the basis of a report from the Commission, the Council shall, starting in 1994, review the scope of the reduced rates every two years. The Council may, in accordance with Article 93 of the Treaty, decide to alter the list of goods and services set out in Annex III.
Amendment rationale: CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal The purpose of the current proposal for a Directive amending Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax 1 (hereafter the ‘ VAT Directive ’ ) is to prolong: 1) the possibility for Member States to apply the reverse charge mechanism to combat existing fraud in supplies of goods and services included in Article 199a(1) of the VAT Directive and 2) the possibility to use the Quick Reaction Mechanism (QRM) , as set out in Article 199b of the VAT Directive , to combat fraud via the application of the reverse charge mechanism in very specific cases . As a general rule, Article 193 of the VAT Directive stipulates that the taxable person supplying goods or services is liable to pay VAT. As a derogation, the reverse charge mechanism allows to designate the recipient of the supply as the person liable for the payment of VAT. Under this reverse charge mechanism, VAT is not charged by the supplier but accounted for by the customer (a taxable person) in his VAT return. This VAT is then deducted in that same VAT return and, therefore, insofar this person has a full right of deduction, the result is nil. The reverse charge mechanism is used to combat fraud and in particular Missing Trader Intra-Community (MTIC) fraud. This type of fraud occurs when a trader acquires goods, transported or dispatched from another Member State, by means of a supply exempt from VAT, and sells them on including VAT on the invoice to the customer. After having received the VAT amount from the customer such trader disappears before paying the VAT due to the tax authorities. At the same time, the customer acting in good faith can normally deduct the VAT he paid to the supplier through his VAT return. Hence, under the reverse charge mechanism VAT is not effectively paid to the supplier. The reverse charge mechanism based on Article 199a o f the VAT Directive is optional for Member States to apply. It allows them to fight this type of fraud in the pre-defined sensitive areas where it typically occurs 2 on their territory . Once suppliers are obliged to use the reverse charge mechanism for such domestic supplies, t he y cann ot charge VAT on their invoice. They will subsequently not receive the VAT amount from their customer and , as a result , such traders cannot disappear with the amount of VAT received. The QRM of Article 199b is an exceptional measure allowing Member States to quickly introduce , in cases of imperative urgency, a temporary reverse charge mechanism for supplies of goods and services in sectors where sudden and massive fraud occurred and which are not listed in Article 199a of the VAT Directive. This procedure is exceptional and extremely quick as the Commission has to react within one month, either with a negative opinion or to confirm in writing to the Member State concerned that it does not object the measure. The Member State may adopt the QRM special measure from the date of receipt of that confirmation. By u sing this mechanism , Member States can bridge the p eriod required for obtaining a ‘ normal ’ derogation under A rticle 395 of the VAT Directive, which can take up to six months . Such a derogation requires a proposal from the Commission and unanimous adoption by Council. Article 199a of the VAT Directive was introduced 3 for the period 2010 until 30 June 2015 and was a first time extended 4 , with amendments, until 31 December 2018. Article 199b of the VAT Directive was introduced 5 for the period 2013 until 31 December 2018. Both Article s 199a and 199b of the VAT Directive were subsequently extended 6 until 30 June 2022 in order to coincide with the initially foreseen date on which the VAT definitive system would enter into force (see more details below) . At the time the application period of Articles 199a and 199b of the VAT Directive would be extended until 30 June 2022 , the Commission presented a r eport on the effects of the mechanisms i ncluded in these articles 7 and concluded, on the basis of contributions of tax administrations and business stakeholders, that the measures in these articles were useful in the fight against fraud. In order to deal with the issue of (MTIC) fraud in a more structural manner , the Commission made a proposal for the introduction of the so-called definitive VAT system, a simpler and fraud-proof system for intra-Union trade of goods 8 . These arrangements, which the Commission proposed to enter into force on 1 July 2022, provide a fundamental response to MTIC fraud. However, the state of play of the ongoing negotiations in the Council indicates that it will not be possible for the definitive VAT system to enter into force on 1 July 2022. In order to allow the negotiations on the definitive system to continue, without putting at risk the available tools in order to combat VAT fraud, it is appropriate to prolong the anti-fraud measures contained in the said articles for another limited period. To extend the application period of Articles 199a and 199b would also allow developing further tools to fight tax evasion. To that end, and in accordance with the Tax Package 9 , the C ommission is prepar ing a proposal in order to modernise the current VAT rules, taking into account the opportunities offered by digital technologies. Under the heading ‘VAT in the digital age’, the Commission will assess VAT reporting obligations, possibly including on Transaction-B ased R eporting (TBR) and a n enhanced system of e-invoicing . This should provide quicker and more detailed information on individual transactions to tax administrations and therefore lower the risk of fraud . Based on such legislative developments, the need to further extend Articles 199a and 199b should be reassessed in the future.
Article 101 
By 30 June 2007 at the latest the Commission shall present to the European Parliament and the Council an overall assessment report on the impact of reduced rates applying to locally supplied services, including restaurant services, notably in terms of job creation, economic growth and the proper functioning of the internal market, based on a study carried out by an independent economic think-tank.
Amendment rationale: CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal The purpose of the current proposal for a Directive amending Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax 1 (hereafter the ‘ VAT Directive ’ ) is to prolong: 1) the possibility for Member States to apply the reverse charge mechanism to combat existing fraud in supplies of goods and services included in Article 199a(1) of the VAT Directive and 2) the possibility to use the Quick Reaction Mechanism (QRM) , as set out in Article 199b of the VAT Directive , to combat fraud via the application of the reverse charge mechanism in very specific cases . As a general rule, Article 193 of the VAT Directive stipulates that the taxable person supplying goods or services is liable to pay VAT. As a derogation, the reverse charge mechanism allows to designate the recipient of the supply as the person liable for the payment of VAT. Under this reverse charge mechanism, VAT is not charged by the supplier but accounted for by the customer (a taxable person) in his VAT return. This VAT is then deducted in that same VAT return and, therefore, insofar this person has a full right of deduction, the result is nil. The reverse charge mechanism is used to combat fraud and in particular Missing Trader Intra-Community (MTIC) fraud. This type of fraud occurs when a trader acquires goods, transported or dispatched from another Member State, by means of a supply exempt from VAT, and sells them on including VAT on the invoice to the customer. After having received the VAT amount from the customer such trader disappears before paying the VAT due to the tax authorities. At the same time, the customer acting in good faith can normally deduct the VAT he paid to the supplier through his VAT return. Hence, under the reverse charge mechanism VAT is not effectively paid to the supplier. The reverse charge mechanism based on Article 199a o f the VAT Directive is optional for Member States to apply. It allows them to fight this type of fraud in the pre-defined sensitive areas where it typically occurs 2 on their territory . Once suppliers are obliged to use the reverse charge mechanism for such domestic supplies, t he y cann ot charge VAT on their invoice. They will subsequently not receive the VAT amount from their customer and , as a result , such traders cannot disappear with the amount of VAT received. The QRM of Article 199b is an exceptional measure allowing Member States to quickly introduce , in cases of imperative urgency, a temporary reverse charge mechanism for supplies of goods and services in sectors where sudden and massive fraud occurred and which are not listed in Article 199a of the VAT Directive. This procedure is exceptional and extremely quick as the Commission has to react within one month, either with a negative opinion or to confirm in writing to the Member State concerned that it does not object the measure. The Member State may adopt the QRM special measure from the date of receipt of that confirmation. By u sing this mechanism , Member States can bridge the p eriod required for obtaining a ‘ normal ’ derogation under A rticle 395 of the VAT Directive, which can take up to six months . Such a derogation requires a proposal from the Commission and unanimous adoption by Council. Article 199a of the VAT Directive was introduced 3 for the period 2010 until 30 June 2015 and was a first time extended 4 , with amendments, until 31 December 2018. Article 199b of the VAT Directive was introduced 5 for the period 2013 until 31 December 2018. Both Article s 199a and 199b of the VAT Directive were subsequently extended 6 until 30 June 2022 in order to coincide with the initially foreseen date on which the VAT definitive system would enter into force (see more details below) . At the time the application period of Articles 199a and 199b of the VAT Directive would be extended until 30 June 2022 , the Commission presented a r eport on the effects of the mechanisms i ncluded in these articles 7 and concluded, on the basis of contributions of tax administrations and business stakeholders, that the measures in these articles were useful in the fight against fraud. In order to deal with the issue of (MTIC) fraud in a more structural manner , the Commission made a proposal for the introduction of the so-called definitive VAT system, a simpler and fraud-proof system for intra-Union trade of goods 8 . These arrangements, which the Commission proposed to enter into force on 1 July 2022, provide a fundamental response to MTIC fraud. However, the state of play of the ongoing negotiations in the Council indicates that it will not be possible for the definitive VAT system to enter into force on 1 July 2022. In order to allow the negotiations on the definitive system to continue, without putting at risk the available tools in order to combat VAT fraud, it is appropriate to prolong the anti-fraud measures contained in the said articles for another limited period. To extend the application period of Articles 199a and 199b would also allow developing further tools to fight tax evasion. To that end, and in accordance with the Tax Package 9 , the C ommission is prepar ing a proposal in order to modernise the current VAT rules, taking into account the opportunities offered by digital technologies. Under the heading ‘VAT in the digital age’, the Commission will assess VAT reporting obligations, possibly including on Transaction-B ased R eporting (TBR) and a n enhanced system of e-invoicing . This should provide quicker and more detailed information on individual transactions to tax administrations and therefore lower the risk of fraud . Based on such legislative developments, the need to further extend Articles 199a and 199b should be reassessed in the future.
Article 102 
After consultation of the VAT Committee, each Member State may apply a reduced rate to the supply of natural gas, electricity or district heating.
Amendment rationale: CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal The purpose of the current proposal for a Directive amending Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax 1 (hereafter the ‘ VAT Directive ’ ) is to prolong: 1) the possibility for Member States to apply the reverse charge mechanism to combat existing fraud in supplies of goods and services included in Article 199a(1) of the VAT Directive and 2) the possibility to use the Quick Reaction Mechanism (QRM) , as set out in Article 199b of the VAT Directive , to combat fraud via the application of the reverse charge mechanism in very specific cases . As a general rule, Article 193 of the VAT Directive stipulates that the taxable person supplying goods or services is liable to pay VAT. As a derogation, the reverse charge mechanism allows to designate the recipient of the supply as the person liable for the payment of VAT. Under this reverse charge mechanism, VAT is not charged by the supplier but accounted for by the customer (a taxable person) in his VAT return. This VAT is then deducted in that same VAT return and, therefore, insofar this person has a full right of deduction, the result is nil. The reverse charge mechanism is used to combat fraud and in particular Missing Trader Intra-Community (MTIC) fraud. This type of fraud occurs when a trader acquires goods, transported or dispatched from another Member State, by means of a supply exempt from VAT, and sells them on including VAT on the invoice to the customer. After having received the VAT amount from the customer such trader disappears before paying the VAT due to the tax authorities. At the same time, the customer acting in good faith can normally deduct the VAT he paid to the supplier through his VAT return. Hence, under the reverse charge mechanism VAT is not effectively paid to the supplier. The reverse charge mechanism based on Article 199a o f the VAT Directive is optional for Member States to apply. It allows them to fight this type of fraud in the pre-defined sensitive areas where it typically occurs 2 on their territory . Once suppliers are obliged to use the reverse charge mechanism for such domestic supplies, t he y cann ot charge VAT on their invoice. They will subsequently not receive the VAT amount from their customer and , as a result , such traders cannot disappear with the amount of VAT received. The QRM of Article 199b is an exceptional measure allowing Member States to quickly introduce , in cases of imperative urgency, a temporary reverse charge mechanism for supplies of goods and services in sectors where sudden and massive fraud occurred and which are not listed in Article 199a of the VAT Directive. This procedure is exceptional and extremely quick as the Commission has to react within one month, either with a negative opinion or to confirm in writing to the Member State concerned that it does not object the measure. The Member State may adopt the QRM special measure from the date of receipt of that confirmation. By u sing this mechanism , Member States can bridge the p eriod required for obtaining a ‘ normal ’ derogation under A rticle 395 of the VAT Directive, which can take up to six months . Such a derogation requires a proposal from the Commission and unanimous adoption by Council. Article 199a of the VAT Directive was introduced 3 for the period 2010 until 30 June 2015 and was a first time extended 4 , with amendments, until 31 December 2018. Article 199b of the VAT Directive was introduced 5 for the period 2013 until 31 December 2018. Both Article s 199a and 199b of the VAT Directive were subsequently extended 6 until 30 June 2022 in order to coincide with the initially foreseen date on which the VAT definitive system would enter into force (see more details below) . At the time the application period of Articles 199a and 199b of the VAT Directive would be extended until 30 June 2022 , the Commission presented a r eport on the effects of the mechanisms i ncluded in these articles 7 and concluded, on the basis of contributions of tax administrations and business stakeholders, that the measures in these articles were useful in the fight against fraud. In order to deal with the issue of (MTIC) fraud in a more structural manner , the Commission made a proposal for the introduction of the so-called definitive VAT system, a simpler and fraud-proof system for intra-Union trade of goods 8 . These arrangements, which the Commission proposed to enter into force on 1 July 2022, provide a fundamental response to MTIC fraud. However, the state of play of the ongoing negotiations in the Council indicates that it will not be possible for the definitive VAT system to enter into force on 1 July 2022. In order to allow the negotiations on the definitive system to continue, without putting at risk the available tools in order to combat VAT fraud, it is appropriate to prolong the anti-fraud measures contained in the said articles for another limited period. To extend the application period of Articles 199a and 199b would also allow developing further tools to fight tax evasion. To that end, and in accordance with the Tax Package 9 , the C ommission is prepar ing a proposal in order to modernise the current VAT rules, taking into account the opportunities offered by digital technologies. Under the heading ‘VAT in the digital age’, the Commission will assess VAT reporting obligations, possibly including on Transaction-B ased R eporting (TBR) and a n enhanced system of e-invoicing . This should provide quicker and more detailed information on individual transactions to tax administrations and therefore lower the risk of fraud . Based on such legislative developments, the need to further extend Articles 199a and 199b should be reassessed in the future.
Article 103 
1. Member States may provide that the reduced rate, or one of the reduced rates, which they apply in accordance with Articles 98 and 99 is also to apply to the importation of works of art, collectors' items and antiques, as defined in points (2), (3) and (4) of Article 311(1). 2. If Member States avail themselves of the option under paragraph 1, they may also apply the reduced rate to the following transactions: (a) the supply of works of art, by their creator or his successors in title; (b) the supply of works of art, on an occasional basis, by a taxable person other than a taxable dealer, where the works of art have been imported by the taxable person himself, or where they have been supplied to him by their creator or his successors in title, or where they have entitled him to full deduction of VAT.
Amendment rationale: CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal Value added tax (VAT) is a general consumption tax borne ultimately by the final consumer but collected by businesses supplying goods or services. The scope of VAT, as set out in Article 2 of the VAT Directive 1 , is very broad, covering any supply of goods and services for consideration by a taxable person within the territory of a Member State and any importation of goods into the European Union (EU). One of the aims of the VAT Directive was to draw up a common list of VAT exemptions so that EU own resources could be collected in a uniform manner in all Member States 2 . That is why the exemption of any transaction from VAT requires a specific provision in the VAT Directive. The VAT Directive does not provide for any general exemption for the supply of goods or services for security and defence purposes. In principle, goods or services supplied to, or goods imported by, armed forces will therefore carry VAT 3 . The cost of VAT is reflected in an increase in the revenues that the tax generates for the state treasury (as public bodies, the military forces are unable to recuperate such VAT), which in turn feed into the budget that finances activities such as national defence. The Directive does provide for an exemption for supplies to the armed forces of any state party to the North Atlantic Treaty that are taking part in a common defence effort outside their own state. This exemption was established to address situations in which the circle of revenue and expenditure flow is broken, because VAT on such supplies would normally constitute revenue for the state in which the armed forces are located, rather than their own. The Excise Directive 4 provides for a similar exemption from excise duty 5 for movements of excise goods to the armed forces of any North Atlantic Treaty Organisation (NATO) member. While NATO defence effort has been covered by the VAT Directive since 1977 6 and the Excise Directive since 1993, neither of the exemptions covers supplies linked to the common defence effort within the Union framework, because there is as yet no common Union defence policy. However, the common security and defence policy (CSDP), which was established as the European security and defence policy (ESDP) in 2000 7 , is a key instrument for external action and includes the progressive framing of a common Union defence policy 8 . The Lisbon Treaty, which came into force in December 2009, was a milestone in the development of the CSDP. The Treaty on European Union (TEU), as amended by the Lisbon Treaty, includes a mutual assistance clause 9 and allowed Member States to strengthen their cooperation in military matters through ‘permanent structured cooperation’ (PESCO) 10 . The Lisbon Treaty also established the European External Action Service (EEAS), which assists the High Representative of the Union for Foreign Affairs and Security Policy in all her responsibilities, including the CSDP. The fact that the High Representative is also one of the Vice-Presidents of the Commission facilitates the bringing together of all necessary EU assets and the application of a comprehensive approach to EU crisis management. The EU Military Committee (EUMC), which was set up in 2001 11 , is the Council’s highest military body. It directs all military activities within the EU framework and advises on the planning and execution of military missions and operations under the CSDP, and on the development of military capabilities. Also established in 2001 12 and working under the military direction of the EUMC, the European Union Military Staff (EUMS) is the source of the EU’s military expertise 13 . It provides early warning, situation assessment and strategic planning for missions and tasks referred to in Articles 42(1) and 43(1) TEU. It also contributes to the elaboration, assessment and review of the capability goals. In June 2016, the global strategy for the European Union’s foreign and security policy (EUGS) 14 laid the ground for developing CSDP further towards three core priorities: responding to external conflicts and crises, building the capabilities of partners and protecting the Union and its citizens. In December 2017 15 , the European Council invited the High Representative, the Commission and the Member States to bring forward work on military mobility, both under PESCO and in the context of EU NATO cooperation. In March 2018, as a follow-up to their November 2017 Joint Communication on improving military mobility in the EU 16 , the Commission and the High Representative presented a Joint Communication on the action plan on military mobility 17 . The action plan recognises the need for equal treatment of defence efforts with a view to reducing administrative burden and thus delays and costs in military mobility, and providing Member States with an incentive to cooperate 18 . It requires the Commission to assess the feasibility of aligning the VAT treatment of defence efforts in the EU framework and under the NATO umbrella. On 19 November 2018, the Council concluded on Security and Defence in the context of the EUGS 19 . The Council welcomed the substantive progress made in the area of security and defence during the previous two years and stressed the importance of keeping the momentum through the continued engagement of the Member States and EU institutions. In particular, the Council welcomed the progress in the implementation of PESCO and the ongoing implementation of efforts to improve the mobility of military personnel, materiel and equipment for routine activities and during crisis and conflict, within and beyond the EU. In line with the action plan and the Council conclusions, the objective of this proposal is to align the VAT treatment of defence efforts in the EU and NATO frameworks as far as is feasible. The proposal has to acknowledge that, while there is a collective defence effort under the North Atlantic Treaty, no common Union defence policy exists as yet. The arrangements for exemptions from excise duties, as provided for in the Excise Directive, should be aligned in a similar way.
Revised version (Article 103 ):
2. If Member States avail themselves of the option under paragraph 1, they may also apply the reduced rate to the following transactions: (a) the supply of works of art, by their creator or his successors in title; (b) the supply of works of art, on an occasional basis, by a taxable person other than a taxable dealer, where the works of art have been imported by the taxable person himself, or where they have been supplied to him by their creator or his successors in title, or where they have entitled him to full deduction of VAT.
Article 104 
Austria may, in the communes of Jungholz and Mittelberg (Kleines Walsertal), apply a second standard rate which is lower than the corresponding rate applied in the rest of Austria but not less than 15 %.
Amendment rationale: CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal The purpose of the current proposal for a Directive amending Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax 1 (hereafter the ‘ VAT Directive ’ ) is to prolong: 1) the possibility for Member States to apply the reverse charge mechanism to combat existing fraud in supplies of goods and services included in Article 199a(1) of the VAT Directive and 2) the possibility to use the Quick Reaction Mechanism (QRM) , as set out in Article 199b of the VAT Directive , to combat fraud via the application of the reverse charge mechanism in very specific cases . As a general rule, Article 193 of the VAT Directive stipulates that the taxable person supplying goods or services is liable to pay VAT. As a derogation, the reverse charge mechanism allows to designate the recipient of the supply as the person liable for the payment of VAT. Under this reverse charge mechanism, VAT is not charged by the supplier but accounted for by the customer (a taxable person) in his VAT return. This VAT is then deducted in that same VAT return and, therefore, insofar this person has a full right of deduction, the result is nil. The reverse charge mechanism is used to combat fraud and in particular Missing Trader Intra-Community (MTIC) fraud. This type of fraud occurs when a trader acquires goods, transported or dispatched from another Member State, by means of a supply exempt from VAT, and sells them on including VAT on the invoice to the customer. After having received the VAT amount from the customer such trader disappears before paying the VAT due to the tax authorities. At the same time, the customer acting in good faith can normally deduct the VAT he paid to the supplier through his VAT return. Hence, under the reverse charge mechanism VAT is not effectively paid to the supplier. The reverse charge mechanism based on Article 199a o f the VAT Directive is optional for Member States to apply. It allows them to fight this type of fraud in the pre-defined sensitive areas where it typically occurs 2 on their territory . Once suppliers are obliged to use the reverse charge mechanism for such domestic supplies, t he y cann ot charge VAT on their invoice. They will subsequently not receive the VAT amount from their customer and , as a result , such traders cannot disappear with the amount of VAT received. The QRM of Article 199b is an exceptional measure allowing Member States to quickly introduce , in cases of imperative urgency, a temporary reverse charge mechanism for supplies of goods and services in sectors where sudden and massive fraud occurred and which are not listed in Article 199a of the VAT Directive. This procedure is exceptional and extremely quick as the Commission has to react within one month, either with a negative opinion or to confirm in writing to the Member State concerned that it does not object the measure. The Member State may adopt the QRM special measure from the date of receipt of that confirmation. By u sing this mechanism , Member States can bridge the p eriod required for obtaining a ‘ normal ’ derogation under A rticle 395 of the VAT Directive, which can take up to six months . Such a derogation requires a proposal from the Commission and unanimous adoption by Council. Article 199a of the VAT Directive was introduced 3 for the period 2010 until 30 June 2015 and was a first time extended 4 , with amendments, until 31 December 2018. Article 199b of the VAT Directive was introduced 5 for the period 2013 until 31 December 2018. Both Article s 199a and 199b of the VAT Directive were subsequently extended 6 until 30 June 2022 in order to coincide with the initially foreseen date on which the VAT definitive system would enter into force (see more details below) . At the time the application period of Articles 199a and 199b of the VAT Directive would be extended until 30 June 2022 , the Commission presented a r eport on the effects of the mechanisms i ncluded in these articles 7 and concluded, on the basis of contributions of tax administrations and business stakeholders, that the measures in these articles were useful in the fight against fraud. In order to deal with the issue of (MTIC) fraud in a more structural manner , the Commission made a proposal for the introduction of the so-called definitive VAT system, a simpler and fraud-proof system for intra-Union trade of goods 8 . These arrangements, which the Commission proposed to enter into force on 1 July 2022, provide a fundamental response to MTIC fraud. However, the state of play of the ongoing negotiations in the Council indicates that it will not be possible for the definitive VAT system to enter into force on 1 July 2022. In order to allow the negotiations on the definitive system to continue, without putting at risk the available tools in order to combat VAT fraud, it is appropriate to prolong the anti-fraud measures contained in the said articles for another limited period. To extend the application period of Articles 199a and 199b would also allow developing further tools to fight tax evasion. To that end, and in accordance with the Tax Package 9 , the C ommission is prepar ing a proposal in order to modernise the current VAT rules, taking into account the opportunities offered by digital technologies. Under the heading ‘VAT in the digital age’, the Commission will assess VAT reporting obligations, possibly including on Transaction-B ased R eporting (TBR) and a n enhanced system of e-invoicing . This should provide quicker and more detailed information on individual transactions to tax administrations and therefore lower the risk of fraud . Based on such legislative developments, the need to further extend Articles 199a and 199b should be reassessed in the future.
Article 104a 
Cyprus may apply one of the two reduced rates provided for in Article 98 to the supply of liquid petroleum gas (LPG) in cylinders.
Amendment rationale: CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal The purpose of the current proposal for a Directive amending Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax 1 (hereafter the ‘ VAT Directive ’ ) is to prolong: 1) the possibility for Member States to apply the reverse charge mechanism to combat existing fraud in supplies of goods and services included in Article 199a(1) of the VAT Directive and 2) the possibility to use the Quick Reaction Mechanism (QRM) , as set out in Article 199b of the VAT Directive , to combat fraud via the application of the reverse charge mechanism in very specific cases . As a general rule, Article 193 of the VAT Directive stipulates that the taxable person supplying goods or services is liable to pay VAT. As a derogation, the reverse charge mechanism allows to designate the recipient of the supply as the person liable for the payment of VAT. Under this reverse charge mechanism, VAT is not charged by the supplier but accounted for by the customer (a taxable person) in his VAT return. This VAT is then deducted in that same VAT return and, therefore, insofar this person has a full right of deduction, the result is nil. The reverse charge mechanism is used to combat fraud and in particular Missing Trader Intra-Community (MTIC) fraud. This type of fraud occurs when a trader acquires goods, transported or dispatched from another Member State, by means of a supply exempt from VAT, and sells them on including VAT on the invoice to the customer. After having received the VAT amount from the customer such trader disappears before paying the VAT due to the tax authorities. At the same time, the customer acting in good faith can normally deduct the VAT he paid to the supplier through his VAT return. Hence, under the reverse charge mechanism VAT is not effectively paid to the supplier. The reverse charge mechanism based on Article 199a o f the VAT Directive is optional for Member States to apply. It allows them to fight this type of fraud in the pre-defined sensitive areas where it typically occurs 2 on their territory . Once suppliers are obliged to use the reverse charge mechanism for such domestic supplies, t he y cann ot charge VAT on their invoice. They will subsequently not receive the VAT amount from their customer and , as a result , such traders cannot disappear with the amount of VAT received. The QRM of Article 199b is an exceptional measure allowing Member States to quickly introduce , in cases of imperative urgency, a temporary reverse charge mechanism for supplies of goods and services in sectors where sudden and massive fraud occurred and which are not listed in Article 199a of the VAT Directive. This procedure is exceptional and extremely quick as the Commission has to react within one month, either with a negative opinion or to confirm in writing to the Member State concerned that it does not object the measure. The Member State may adopt the QRM special measure from the date of receipt of that confirmation. By u sing this mechanism , Member States can bridge the p eriod required for obtaining a ‘ normal ’ derogation under A rticle 395 of the VAT Directive, which can take up to six months . Such a derogation requires a proposal from the Commission and unanimous adoption by Council. Article 199a of the VAT Directive was introduced 3 for the period 2010 until 30 June 2015 and was a first time extended 4 , with amendments, until 31 December 2018. Article 199b of the VAT Directive was introduced 5 for the period 2013 until 31 December 2018. Both Article s 199a and 199b of the VAT Directive were subsequently extended 6 until 30 June 2022 in order to coincide with the initially foreseen date on which the VAT definitive system would enter into force (see more details below) . At the time the application period of Articles 199a and 199b of the VAT Directive would be extended until 30 June 2022 , the Commission presented a r eport on the effects of the mechanisms i ncluded in these articles 7 and concluded, on the basis of contributions of tax administrations and business stakeholders, that the measures in these articles were useful in the fight against fraud. In order to deal with the issue of (MTIC) fraud in a more structural manner , the Commission made a proposal for the introduction of the so-called definitive VAT system, a simpler and fraud-proof system for intra-Union trade of goods 8 . These arrangements, which the Commission proposed to enter into force on 1 July 2022, provide a fundamental response to MTIC fraud. However, the state of play of the ongoing negotiations in the Council indicates that it will not be possible for the definitive VAT system to enter into force on 1 July 2022. In order to allow the negotiations on the definitive system to continue, without putting at risk the available tools in order to combat VAT fraud, it is appropriate to prolong the anti-fraud measures contained in the said articles for another limited period. To extend the application period of Articles 199a and 199b would also allow developing further tools to fight tax evasion. To that end, and in accordance with the Tax Package 9 , the C ommission is prepar ing a proposal in order to modernise the current VAT rules, taking into account the opportunities offered by digital technologies. Under the heading ‘VAT in the digital age’, the Commission will assess VAT reporting obligations, possibly including on Transaction-B ased R eporting (TBR) and a n enhanced system of e-invoicing . This should provide quicker and more detailed information on individual transactions to tax administrations and therefore lower the risk of fraud . Based on such legislative developments, the need to further extend Articles 199a and 199b should be reassessed in the future.
Article 105 
1. Portugal may apply one of the two reduced rates provided for in Article 98 to the tolls on bridges in the Lisbon area. 2. Portugal may, in the case of transactions carried out in the autonomous regions of the Azores and Madeira and of direct importation into those regions, apply rates lower than those applying on the mainland.
Amendment rationale: CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal The purpose of the current proposal for a Directive amending Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax 1 (hereafter the ‘ VAT Directive ’ ) is to prolong: 1) the possibility for Member States to apply the reverse charge mechanism to combat existing fraud in supplies of goods and services included in Article 199a(1) of the VAT Directive and 2) the possibility to use the Quick Reaction Mechanism (QRM) , as set out in Article 199b of the VAT Directive , to combat fraud via the application of the reverse charge mechanism in very specific cases . As a general rule, Article 193 of the VAT Directive stipulates that the taxable person supplying goods or services is liable to pay VAT. As a derogation, the reverse charge mechanism allows to designate the recipient of the supply as the person liable for the payment of VAT. Under this reverse charge mechanism, VAT is not charged by the supplier but accounted for by the customer (a taxable person) in his VAT return. This VAT is then deducted in that same VAT return and, therefore, insofar this person has a full right of deduction, the result is nil. The reverse charge mechanism is used to combat fraud and in particular Missing Trader Intra-Community (MTIC) fraud. This type of fraud occurs when a trader acquires goods, transported or dispatched from another Member State, by means of a supply exempt from VAT, and sells them on including VAT on the invoice to the customer. After having received the VAT amount from the customer such trader disappears before paying the VAT due to the tax authorities. At the same time, the customer acting in good faith can normally deduct the VAT he paid to the supplier through his VAT return. Hence, under the reverse charge mechanism VAT is not effectively paid to the supplier. The reverse charge mechanism based on Article 199a o f the VAT Directive is optional for Member States to apply. It allows them to fight this type of fraud in the pre-defined sensitive areas where it typically occurs 2 on their territory . Once suppliers are obliged to use the reverse charge mechanism for such domestic supplies, t he y cann ot charge VAT on their invoice. They will subsequently not receive the VAT amount from their customer and , as a result , such traders cannot disappear with the amount of VAT received. The QRM of Article 199b is an exceptional measure allowing Member States to quickly introduce , in cases of imperative urgency, a temporary reverse charge mechanism for supplies of goods and services in sectors where sudden and massive fraud occurred and which are not listed in Article 199a of the VAT Directive. This procedure is exceptional and extremely quick as the Commission has to react within one month, either with a negative opinion or to confirm in writing to the Member State concerned that it does not object the measure. The Member State may adopt the QRM special measure from the date of receipt of that confirmation. By u sing this mechanism , Member States can bridge the p eriod required for obtaining a ‘ normal ’ derogation under A rticle 395 of the VAT Directive, which can take up to six months . Such a derogation requires a proposal from the Commission and unanimous adoption by Council. Article 199a of the VAT Directive was introduced 3 for the period 2010 until 30 June 2015 and was a first time extended 4 , with amendments, until 31 December 2018. Article 199b of the VAT Directive was introduced 5 for the period 2013 until 31 December 2018. Both Article s 199a and 199b of the VAT Directive were subsequently extended 6 until 30 June 2022 in order to coincide with the initially foreseen date on which the VAT definitive system would enter into force (see more details below) . At the time the application period of Articles 199a and 199b of the VAT Directive would be extended until 30 June 2022 , the Commission presented a r eport on the effects of the mechanisms i ncluded in these articles 7 and concluded, on the basis of contributions of tax administrations and business stakeholders, that the measures in these articles were useful in the fight against fraud. In order to deal with the issue of (MTIC) fraud in a more structural manner , the Commission made a proposal for the introduction of the so-called definitive VAT system, a simpler and fraud-proof system for intra-Union trade of goods 8 . These arrangements, which the Commission proposed to enter into force on 1 July 2022, provide a fundamental response to MTIC fraud. However, the state of play of the ongoing negotiations in the Council indicates that it will not be possible for the definitive VAT system to enter into force on 1 July 2022. In order to allow the negotiations on the definitive system to continue, without putting at risk the available tools in order to combat VAT fraud, it is appropriate to prolong the anti-fraud measures contained in the said articles for another limited period. To extend the application period of Articles 199a and 199b would also allow developing further tools to fight tax evasion. To that end, and in accordance with the Tax Package 9 , the C ommission is prepar ing a proposal in order to modernise the current VAT rules, taking into account the opportunities offered by digital technologies. Under the heading ‘VAT in the digital age’, the Commission will assess VAT reporting obligations, possibly including on Transaction-B ased R eporting (TBR) and a n enhanced system of e-invoicing . This should provide quicker and more detailed information on individual transactions to tax administrations and therefore lower the risk of fraud . Based on such legislative developments, the need to further extend Articles 199a and 199b should be reassessed in the future. 
Revised version (Article 104 ):
1. Austria may, in the communes of Jungholz and Mittelberg (Kleines Walsertal), apply a second standard rate which is lower than the corresponding rate applied in the rest of Austria but not less than 15 %. 2. Greece may apply rates up to 30 % lower than the corresponding rates applied in mainland Greece in the departments of Lesbos, Chios, Samos, the Dodecanese and the Cyclades, and on the islands of Thassos, the Northern Sporades, Samothrace and Skiros. 3. Portugal may, in the case of transactions carried out in the autonomous regions of the Azores and Madeira and of direct importation into those regions, apply rates lower than those applicable on the mainland. 4. Portugal may apply one of the two reduced rates provided for in Article 98(1) to the tolls on bridges in the Lisbon area.
Article 109 
Pending introduction of the definitive arrangements referred to in Article 402, the provisions laid down in this Chapter shall apply.
Amendment rationale: CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal The purpose of the current proposal for a Directive amending Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax 1 (hereafter the ‘ VAT Directive ’ ) is to prolong: 1) the possibility for Member States to apply the reverse charge mechanism to combat existing fraud in supplies of goods and services included in Article 199a(1) of the VAT Directive and 2) the possibility to use the Quick Reaction Mechanism (QRM) , as set out in Article 199b of the VAT Directive , to combat fraud via the application of the reverse charge mechanism in very specific cases . As a general rule, Article 193 of the VAT Directive stipulates that the taxable person supplying goods or services is liable to pay VAT. As a derogation, the reverse charge mechanism allows to designate the recipient of the supply as the person liable for the payment of VAT. Under this reverse charge mechanism, VAT is not charged by the supplier but accounted for by the customer (a taxable person) in his VAT return. This VAT is then deducted in that same VAT return and, therefore, insofar this person has a full right of deduction, the result is nil. The reverse charge mechanism is used to combat fraud and in particular Missing Trader Intra-Community (MTIC) fraud. This type of fraud occurs when a trader acquires goods, transported or dispatched from another Member State, by means of a supply exempt from VAT, and sells them on including VAT on the invoice to the customer. After having received the VAT amount from the customer such trader disappears before paying the VAT due to the tax authorities. At the same time, the customer acting in good faith can normally deduct the VAT he paid to the supplier through his VAT return. Hence, under the reverse charge mechanism VAT is not effectively paid to the supplier. The reverse charge mechanism based on Article 199a o f the VAT Directive is optional for Member States to apply. It allows them to fight this type of fraud in the pre-defined sensitive areas where it typically occurs 2 on their territory . Once suppliers are obliged to use the reverse charge mechanism for such domestic supplies, t he y cann ot charge VAT on their invoice. They will subsequently not receive the VAT amount from their customer and , as a result , such traders cannot disappear with the amount of VAT received. The QRM of Article 199b is an exceptional measure allowing Member States to quickly introduce , in cases of imperative urgency, a temporary reverse charge mechanism for supplies of goods and services in sectors where sudden and massive fraud occurred and which are not listed in Article 199a of the VAT Directive. This procedure is exceptional and extremely quick as the Commission has to react within one month, either with a negative opinion or to confirm in writing to the Member State concerned that it does not object the measure. The Member State may adopt the QRM special measure from the date of receipt of that confirmation. By u sing this mechanism , Member States can bridge the p eriod required for obtaining a ‘ normal ’ derogation under A rticle 395 of the VAT Directive, which can take up to six months . Such a derogation requires a proposal from the Commission and unanimous adoption by Council. Article 199a of the VAT Directive was introduced 3 for the period 2010 until 30 June 2015 and was a first time extended 4 , with amendments, until 31 December 2018. Article 199b of the VAT Directive was introduced 5 for the period 2013 until 31 December 2018. Both Article s 199a and 199b of the VAT Directive were subsequently extended 6 until 30 June 2022 in order to coincide with the initially foreseen date on which the VAT definitive system would enter into force (see more details below) . At the time the application period of Articles 199a and 199b of the VAT Directive would be extended until 30 June 2022 , the Commission presented a r eport on the effects of the mechanisms i ncluded in these articles 7 and concluded, on the basis of contributions of tax administrations and business stakeholders, that the measures in these articles were useful in the fight against fraud. In order to deal with the issue of (MTIC) fraud in a more structural manner , the Commission made a proposal for the introduction of the so-called definitive VAT system, a simpler and fraud-proof system for intra-Union trade of goods 8 . These arrangements, which the Commission proposed to enter into force on 1 July 2022, provide a fundamental response to MTIC fraud. However, the state of play of the ongoing negotiations in the Council indicates that it will not be possible for the definitive VAT system to enter into force on 1 July 2022. In order to allow the negotiations on the definitive system to continue, without putting at risk the available tools in order to combat VAT fraud, it is appropriate to prolong the anti-fraud measures contained in the said articles for another limited period. To extend the application period of Articles 199a and 199b would also allow developing further tools to fight tax evasion. To that end, and in accordance with the Tax Package 9 , the C ommission is prepar ing a proposal in order to modernise the current VAT rules, taking into account the opportunities offered by digital technologies. Under the heading ‘VAT in the digital age’, the Commission will assess VAT reporting obligations, possibly including on Transaction-B ased R eporting (TBR) and a n enhanced system of e-invoicing . This should provide quicker and more detailed information on individual transactions to tax administrations and therefore lower the risk of fraud . Based on such legislative developments, the need to further extend Articles 199a and 199b should be reassessed in the future.
Article 110 
Member States which, at 1 January 1991, were granting exemptions with deductibility of the VAT paid at the preceding stage or applying reduced rates lower than the minimum laid down in Article 99 may continue to grant those exemptions or apply those reduced rates. The exemptions and reduced rates referred to in the first paragraph must be in accordance with Community law and must have been adopted for clearly defined social reasons and for the benefit of the final consumer.
Amendment rationale: CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal The purpose of the current proposal for a Directive amending Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax 1 (hereafter the ‘ VAT Directive ’ ) is to prolong: 1) the possibility for Member States to apply the reverse charge mechanism to combat existing fraud in supplies of goods and services included in Article 199a(1) of the VAT Directive and 2) the possibility to use the Quick Reaction Mechanism (QRM) , as set out in Article 199b of the VAT Directive , to combat fraud via the application of the reverse charge mechanism in very specific cases . As a general rule, Article 193 of the VAT Directive stipulates that the taxable person supplying goods or services is liable to pay VAT. As a derogation, the reverse charge mechanism allows to designate the recipient of the supply as the person liable for the payment of VAT. Under this reverse charge mechanism, VAT is not charged by the supplier but accounted for by the customer (a taxable person) in his VAT return. This VAT is then deducted in that same VAT return and, therefore, insofar this person has a full right of deduction, the result is nil. The reverse charge mechanism is used to combat fraud and in particular Missing Trader Intra-Community (MTIC) fraud. This type of fraud occurs when a trader acquires goods, transported or dispatched from another Member State, by means of a supply exempt from VAT, and sells them on including VAT on the invoice to the customer. After having received the VAT amount from the customer such trader disappears before paying the VAT due to the tax authorities. At the same time, the customer acting in good faith can normally deduct the VAT he paid to the supplier through his VAT return. Hence, under the reverse charge mechanism VAT is not effectively paid to the supplier. The reverse charge mechanism based on Article 199a o f the VAT Directive is optional for Member States to apply. It allows them to fight this type of fraud in the pre-defined sensitive areas where it typically occurs 2 on their territory . Once suppliers are obliged to use the reverse charge mechanism for such domestic supplies, t he y cann ot charge VAT on their invoice. They will subsequently not receive the VAT amount from their customer and , as a result , such traders cannot disappear with the amount of VAT received. The QRM of Article 199b is an exceptional measure allowing Member States to quickly introduce , in cases of imperative urgency, a temporary reverse charge mechanism for supplies of goods and services in sectors where sudden and massive fraud occurred and which are not listed in Article 199a of the VAT Directive. This procedure is exceptional and extremely quick as the Commission has to react within one month, either with a negative opinion or to confirm in writing to the Member State concerned that it does not object the measure. The Member State may adopt the QRM special measure from the date of receipt of that confirmation. By u sing this mechanism , Member States can bridge the p eriod required for obtaining a ‘ normal ’ derogation under A rticle 395 of the VAT Directive, which can take up to six months . Such a derogation requires a proposal from the Commission and unanimous adoption by Council. Article 199a of the VAT Directive was introduced 3 for the period 2010 until 30 June 2015 and was a first time extended 4 , with amendments, until 31 December 2018. Article 199b of the VAT Directive was introduced 5 for the period 2013 until 31 December 2018. Both Article s 199a and 199b of the VAT Directive were subsequently extended 6 until 30 June 2022 in order to coincide with the initially foreseen date on which the VAT definitive system would enter into force (see more details below) . At the time the application period of Articles 199a and 199b of the VAT Directive would be extended until 30 June 2022 , the Commission presented a r eport on the effects of the mechanisms i ncluded in these articles 7 and concluded, on the basis of contributions of tax administrations and business stakeholders, that the measures in these articles were useful in the fight against fraud. In order to deal with the issue of (MTIC) fraud in a more structural manner , the Commission made a proposal for the introduction of the so-called definitive VAT system, a simpler and fraud-proof system for intra-Union trade of goods 8 . These arrangements, which the Commission proposed to enter into force on 1 July 2022, provide a fundamental response to MTIC fraud. However, the state of play of the ongoing negotiations in the Council indicates that it will not be possible for the definitive VAT system to enter into force on 1 July 2022. In order to allow the negotiations on the definitive system to continue, without putting at risk the available tools in order to combat VAT fraud, it is appropriate to prolong the anti-fraud measures contained in the said articles for another limited period. To extend the application period of Articles 199a and 199b would also allow developing further tools to fight tax evasion. To that end, and in accordance with the Tax Package 9 , the C ommission is prepar ing a proposal in order to modernise the current VAT rules, taking into account the opportunities offered by digital technologies. Under the heading ‘VAT in the digital age’, the Commission will assess VAT reporting obligations, possibly including on Transaction-B ased R eporting (TBR) and a n enhanced system of e-invoicing . This should provide quicker and more detailed information on individual transactions to tax administrations and therefore lower the risk of fraud . Based on such legislative developments, the need to further extend Articles 199a and 199b should be reassessed in the future.
Article 111 
Subject to the conditions laid down in the second paragraph of Article 110, exemptions with deductibility of the VAT paid at the preceding stage may continue to be granted in the following cases: (a) by Finland in respect of the supply of newspapers and periodicals sold by subscription and the printing of publications distributed to the members of corporations for the public good; (b) by Sweden in respect of the supply of newspapers, including radio and cassette newspapers for the visually impaired, pharmaceutical products supplied to hospitals or on prescription, and the production of, or other related services concerning, periodicals of non-profit-making organisations.
Amendment rationale: CONTEXT OF THE PROPOSAL With Decision 2012/419/EU amending the status of Mayotte with regard to the European Union, the European Council has decided that, from 1 January 2014, the status of Mayotte will be that of outermost region within the meaning of Article 349 of the Treaty on the Functioning of the European Union (TFEU) instead of that of an overseas country or territory (OCT) within the meaning of Article 355(2) of the TFEU. To this end, in the above-mentioned European Council Decision, Mayotte has been added to the list of outermost regions in Articles 349 and 355(1) of the TFEU. Union legislation on VAT (Directive 2006/112/EC[1]) and excise duties (Directive 2008/118/EC[2]) will therefore apply in Mayotte after the change of status. In substance, the objective of this proposal is to bring Mayotte's situation into line with that of other French outermost regions by excluding it from the scope of Directives 2006/112/EC and 2008/118/EC. Furthermore, by referring to Articles 349 and 355(1) of the TFEU, the intention is to make it clearer that all these regions, including Mayotte, are excluded from the scope of these Directives.
Revised version (Article 111 ):
Subject to the conditions laid down in the second paragraph of Article 110, exemptions with deductibility of the VAT paid at the preceding stage may continue to be granted in the following cases: (a) by Finland in respect of the supply of newspapers and periodicals sold by subscription and the printing of publications distributed to the members of corporations for the public good; (b) by Sweden in respect of the supply of newspapers, including radio and cassette newspapers for the visually impaired, pharmaceutical products supplied to hospitals or on prescription, and the production of, or other related services concerning, periodicals of non-profit-making organisations; (c) by Malta in respect of the supply of foodstuffs for human consumption and pharmaceuticals.
Article 112 
If the provisions of Article 110 cause for Ireland distortion of competition in the supply of energy products for heating and lighting, Ireland may, on specific request, be authorised by the Commission to apply a reduced rate to such supplies, in accordance with Articles 98 and 99. In the case referred to in the first paragraph, Ireland shall submit a request to the Commission, together with all necessary information. If the Commission has not taken a decision within three months of receiving the request, Ireland shall be deemed to be authorised to apply the reduced rates proposed.
Amendment rationale: CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal The purpose of the current proposal for a Directive amending Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax 1 (hereafter the ‘ VAT Directive ’ ) is to prolong: 1) the possibility for Member States to apply the reverse charge mechanism to combat existing fraud in supplies of goods and services included in Article 199a(1) of the VAT Directive and 2) the possibility to use the Quick Reaction Mechanism (QRM) , as set out in Article 199b of the VAT Directive , to combat fraud via the application of the reverse charge mechanism in very specific cases . As a general rule, Article 193 of the VAT Directive stipulates that the taxable person supplying goods or services is liable to pay VAT. As a derogation, the reverse charge mechanism allows to designate the recipient of the supply as the person liable for the payment of VAT. Under this reverse charge mechanism, VAT is not charged by the supplier but accounted for by the customer (a taxable person) in his VAT return. This VAT is then deducted in that same VAT return and, therefore, insofar this person has a full right of deduction, the result is nil. The reverse charge mechanism is used to combat fraud and in particular Missing Trader Intra-Community (MTIC) fraud. This type of fraud occurs when a trader acquires goods, transported or dispatched from another Member State, by means of a supply exempt from VAT, and sells them on including VAT on the invoice to the customer. After having received the VAT amount from the customer such trader disappears before paying the VAT due to the tax authorities. At the same time, the customer acting in good faith can normally deduct the VAT he paid to the supplier through his VAT return. Hence, under the reverse charge mechanism VAT is not effectively paid to the supplier. The reverse charge mechanism based on Article 199a o f the VAT Directive is optional for Member States to apply. It allows them to fight this type of fraud in the pre-defined sensitive areas where it typically occurs 2 on their territory . Once suppliers are obliged to use the reverse charge mechanism for such domestic supplies, t he y cann ot charge VAT on their invoice. They will subsequently not receive the VAT amount from their customer and , as a result , such traders cannot disappear with the amount of VAT received. The QRM of Article 199b is an exceptional measure allowing Member States to quickly introduce , in cases of imperative urgency, a temporary reverse charge mechanism for supplies of goods and services in sectors where sudden and massive fraud occurred and which are not listed in Article 199a of the VAT Directive. This procedure is exceptional and extremely quick as the Commission has to react within one month, either with a negative opinion or to confirm in writing to the Member State concerned that it does not object the measure. The Member State may adopt the QRM special measure from the date of receipt of that confirmation. By u sing this mechanism , Member States can bridge the p eriod required for obtaining a ‘ normal ’ derogation under A rticle 395 of the VAT Directive, which can take up to six months . Such a derogation requires a proposal from the Commission and unanimous adoption by Council. Article 199a of the VAT Directive was introduced 3 for the period 2010 until 30 June 2015 and was a first time extended 4 , with amendments, until 31 December 2018. Article 199b of the VAT Directive was introduced 5 for the period 2013 until 31 December 2018. Both Article s 199a and 199b of the VAT Directive were subsequently extended 6 until 30 June 2022 in order to coincide with the initially foreseen date on which the VAT definitive system would enter into force (see more details below) . At the time the application period of Articles 199a and 199b of the VAT Directive would be extended until 30 June 2022 , the Commission presented a r eport on the effects of the mechanisms i ncluded in these articles 7 and concluded, on the basis of contributions of tax administrations and business stakeholders, that the measures in these articles were useful in the fight against fraud. In order to deal with the issue of (MTIC) fraud in a more structural manner , the Commission made a proposal for the introduction of the so-called definitive VAT system, a simpler and fraud-proof system for intra-Union trade of goods 8 . These arrangements, which the Commission proposed to enter into force on 1 July 2022, provide a fundamental response to MTIC fraud. However, the state of play of the ongoing negotiations in the Council indicates that it will not be possible for the definitive VAT system to enter into force on 1 July 2022. In order to allow the negotiations on the definitive system to continue, without putting at risk the available tools in order to combat VAT fraud, it is appropriate to prolong the anti-fraud measures contained in the said articles for another limited period. To extend the application period of Articles 199a and 199b would also allow developing further tools to fight tax evasion. To that end, and in accordance with the Tax Package 9 , the C ommission is prepar ing a proposal in order to modernise the current VAT rules, taking into account the opportunities offered by digital technologies. Under the heading ‘VAT in the digital age’, the Commission will assess VAT reporting obligations, possibly including on Transaction-B ased R eporting (TBR) and a n enhanced system of e-invoicing . This should provide quicker and more detailed information on individual transactions to tax administrations and therefore lower the risk of fraud . Based on such legislative developments, the need to further extend Articles 199a and 199b should be reassessed in the future.
Article 113 
Member States which, at 1 January 1991, in accordance with Community law, were granting exemptions with deductibility of the VAT paid at the preceding stage or applying reduced rates lower than the minimum laid down in Article 99, in respect of goods and services other than those specified in Annex III, may apply the reduced rate, or one of the two reduced rates, provided for in Article 98 to the supply of such goods or services.
Amendment rationale: CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal The purpose of the current proposal for a Directive amending Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax 1 (hereafter the ‘ VAT Directive ’ ) is to prolong: 1) the possibility for Member States to apply the reverse charge mechanism to combat existing fraud in supplies of goods and services included in Article 199a(1) of the VAT Directive and 2) the possibility to use the Quick Reaction Mechanism (QRM) , as set out in Article 199b of the VAT Directive , to combat fraud via the application of the reverse charge mechanism in very specific cases . As a general rule, Article 193 of the VAT Directive stipulates that the taxable person supplying goods or services is liable to pay VAT. As a derogation, the reverse charge mechanism allows to designate the recipient of the supply as the person liable for the payment of VAT. Under this reverse charge mechanism, VAT is not charged by the supplier but accounted for by the customer (a taxable person) in his VAT return. This VAT is then deducted in that same VAT return and, therefore, insofar this person has a full right of deduction, the result is nil. The reverse charge mechanism is used to combat fraud and in particular Missing Trader Intra-Community (MTIC) fraud. This type of fraud occurs when a trader acquires goods, transported or dispatched from another Member State, by means of a supply exempt from VAT, and sells them on including VAT on the invoice to the customer. After having received the VAT amount from the customer such trader disappears before paying the VAT due to the tax authorities. At the same time, the customer acting in good faith can normally deduct the VAT he paid to the supplier through his VAT return. Hence, under the reverse charge mechanism VAT is not effectively paid to the supplier. The reverse charge mechanism based on Article 199a o f the VAT Directive is optional for Member States to apply. It allows them to fight this type of fraud in the pre-defined sensitive areas where it typically occurs 2 on their territory . Once suppliers are obliged to use the reverse charge mechanism for such domestic supplies, t he y cann ot charge VAT on their invoice. They will subsequently not receive the VAT amount from their customer and , as a result , such traders cannot disappear with the amount of VAT received. The QRM of Article 199b is an exceptional measure allowing Member States to quickly introduce , in cases of imperative urgency, a temporary reverse charge mechanism for supplies of goods and services in sectors where sudden and massive fraud occurred and which are not listed in Article 199a of the VAT Directive. This procedure is exceptional and extremely quick as the Commission has to react within one month, either with a negative opinion or to confirm in writing to the Member State concerned that it does not object the measure. The Member State may adopt the QRM special measure from the date of receipt of that confirmation. By u sing this mechanism , Member States can bridge the p eriod required for obtaining a ‘ normal ’ derogation under A rticle 395 of the VAT Directive, which can take up to six months . Such a derogation requires a proposal from the Commission and unanimous adoption by Council. Article 199a of the VAT Directive was introduced 3 for the period 2010 until 30 June 2015 and was a first time extended 4 , with amendments, until 31 December 2018. Article 199b of the VAT Directive was introduced 5 for the period 2013 until 31 December 2018. Both Article s 199a and 199b of the VAT Directive were subsequently extended 6 until 30 June 2022 in order to coincide with the initially foreseen date on which the VAT definitive system would enter into force (see more details below) . At the time the application period of Articles 199a and 199b of the VAT Directive would be extended until 30 June 2022 , the Commission presented a r eport on the effects of the mechanisms i ncluded in these articles 7 and concluded, on the basis of contributions of tax administrations and business stakeholders, that the measures in these articles were useful in the fight against fraud. In order to deal with the issue of (MTIC) fraud in a more structural manner , the Commission made a proposal for the introduction of the so-called definitive VAT system, a simpler and fraud-proof system for intra-Union trade of goods 8 . These arrangements, which the Commission proposed to enter into force on 1 July 2022, provide a fundamental response to MTIC fraud. However, the state of play of the ongoing negotiations in the Council indicates that it will not be possible for the definitive VAT system to enter into force on 1 July 2022. In order to allow the negotiations on the definitive system to continue, without putting at risk the available tools in order to combat VAT fraud, it is appropriate to prolong the anti-fraud measures contained in the said articles for another limited period. To extend the application period of Articles 199a and 199b would also allow developing further tools to fight tax evasion. To that end, and in accordance with the Tax Package 9 , the C ommission is prepar ing a proposal in order to modernise the current VAT rules, taking into account the opportunities offered by digital technologies. Under the heading ‘VAT in the digital age’, the Commission will assess VAT reporting obligations, possibly including on Transaction-B ased R eporting (TBR) and a n enhanced system of e-invoicing . This should provide quicker and more detailed information on individual transactions to tax administrations and therefore lower the risk of fraud . Based on such legislative developments, the need to further extend Articles 199a and 199b should be reassessed in the future.
Article 114 
1. Member States which, on 1 January 1993, were obliged to increase their standard rate in force at 1 January 1991 by more than 2 % may apply a reduced rate lower than the minimum laid down in Article 99 to the supply of goods and services in the categories set out in Annex III. The Member States referred to in the first subparagraph may also apply such a rate to children’s clothing and children’s footwear and housing. 2. Member States may not rely on paragraph 1 to introduce exemptions with deductibility of the VAT paid at the preceding stage.
Amendment rationale: CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal The purpose of the current proposal for a Directive amending Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax 1 (hereafter the ‘ VAT Directive ’ ) is to prolong: 1) the possibility for Member States to apply the reverse charge mechanism to combat existing fraud in supplies of goods and services included in Article 199a(1) of the VAT Directive and 2) the possibility to use the Quick Reaction Mechanism (QRM) , as set out in Article 199b of the VAT Directive , to combat fraud via the application of the reverse charge mechanism in very specific cases . As a general rule, Article 193 of the VAT Directive stipulates that the taxable person supplying goods or services is liable to pay VAT. As a derogation, the reverse charge mechanism allows to designate the recipient of the supply as the person liable for the payment of VAT. Under this reverse charge mechanism, VAT is not charged by the supplier but accounted for by the customer (a taxable person) in his VAT return. This VAT is then deducted in that same VAT return and, therefore, insofar this person has a full right of deduction, the result is nil. The reverse charge mechanism is used to combat fraud and in particular Missing Trader Intra-Community (MTIC) fraud. This type of fraud occurs when a trader acquires goods, transported or dispatched from another Member State, by means of a supply exempt from VAT, and sells them on including VAT on the invoice to the customer. After having received the VAT amount from the customer such trader disappears before paying the VAT due to the tax authorities. At the same time, the customer acting in good faith can normally deduct the VAT he paid to the supplier through his VAT return. Hence, under the reverse charge mechanism VAT is not effectively paid to the supplier. The reverse charge mechanism based on Article 199a o f the VAT Directive is optional for Member States to apply. It allows them to fight this type of fraud in the pre-defined sensitive areas where it typically occurs 2 on their territory . Once suppliers are obliged to use the reverse charge mechanism for such domestic supplies, t he y cann ot charge VAT on their invoice. They will subsequently not receive the VAT amount from their customer and , as a result , such traders cannot disappear with the amount of VAT received. The QRM of Article 199b is an exceptional measure allowing Member States to quickly introduce , in cases of imperative urgency, a temporary reverse charge mechanism for supplies of goods and services in sectors where sudden and massive fraud occurred and which are not listed in Article 199a of the VAT Directive. This procedure is exceptional and extremely quick as the Commission has to react within one month, either with a negative opinion or to confirm in writing to the Member State concerned that it does not object the measure. The Member State may adopt the QRM special measure from the date of receipt of that confirmation. By u sing this mechanism , Member States can bridge the p eriod required for obtaining a ‘ normal ’ derogation under A rticle 395 of the VAT Directive, which can take up to six months . Such a derogation requires a proposal from the Commission and unanimous adoption by Council. Article 199a of the VAT Directive was introduced 3 for the period 2010 until 30 June 2015 and was a first time extended 4 , with amendments, until 31 December 2018. Article 199b of the VAT Directive was introduced 5 for the period 2013 until 31 December 2018. Both Article s 199a and 199b of the VAT Directive were subsequently extended 6 until 30 June 2022 in order to coincide with the initially foreseen date on which the VAT definitive system would enter into force (see more details below) . At the time the application period of Articles 199a and 199b of the VAT Directive would be extended until 30 June 2022 , the Commission presented a r eport on the effects of the mechanisms i ncluded in these articles 7 and concluded, on the basis of contributions of tax administrations and business stakeholders, that the measures in these articles were useful in the fight against fraud. In order to deal with the issue of (MTIC) fraud in a more structural manner , the Commission made a proposal for the introduction of the so-called definitive VAT system, a simpler and fraud-proof system for intra-Union trade of goods 8 . These arrangements, which the Commission proposed to enter into force on 1 July 2022, provide a fundamental response to MTIC fraud. However, the state of play of the ongoing negotiations in the Council indicates that it will not be possible for the definitive VAT system to enter into force on 1 July 2022. In order to allow the negotiations on the definitive system to continue, without putting at risk the available tools in order to combat VAT fraud, it is appropriate to prolong the anti-fraud measures contained in the said articles for another limited period. To extend the application period of Articles 199a and 199b would also allow developing further tools to fight tax evasion. To that end, and in accordance with the Tax Package 9 , the C ommission is prepar ing a proposal in order to modernise the current VAT rules, taking into account the opportunities offered by digital technologies. Under the heading ‘VAT in the digital age’, the Commission will assess VAT reporting obligations, possibly including on Transaction-B ased R eporting (TBR) and a n enhanced system of e-invoicing . This should provide quicker and more detailed information on individual transactions to tax administrations and therefore lower the risk of fraud . Based on such legislative developments, the need to further extend Articles 199a and 199b should be reassessed in the future.
Article 115 
Member States which, at 1 January 1991, were applying a reduced rate to children’s clothing, children’s footwear or housing may continue to apply such a rate to the supply of those goods or services.
Amendment rationale: CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal The purpose of the current proposal for a Directive amending Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax 1 (hereafter the ‘ VAT Directive ’ ) is to prolong: 1) the possibility for Member States to apply the reverse charge mechanism to combat existing fraud in supplies of goods and services included in Article 199a(1) of the VAT Directive and 2) the possibility to use the Quick Reaction Mechanism (QRM) , as set out in Article 199b of the VAT Directive , to combat fraud via the application of the reverse charge mechanism in very specific cases . As a general rule, Article 193 of the VAT Directive stipulates that the taxable person supplying goods or services is liable to pay VAT. As a derogation, the reverse charge mechanism allows to designate the recipient of the supply as the person liable for the payment of VAT. Under this reverse charge mechanism, VAT is not charged by the supplier but accounted for by the customer (a taxable person) in his VAT return. This VAT is then deducted in that same VAT return and, therefore, insofar this person has a full right of deduction, the result is nil. The reverse charge mechanism is used to combat fraud and in particular Missing Trader Intra-Community (MTIC) fraud. This type of fraud occurs when a trader acquires goods, transported or dispatched from another Member State, by means of a supply exempt from VAT, and sells them on including VAT on the invoice to the customer. After having received the VAT amount from the customer such trader disappears before paying the VAT due to the tax authorities. At the same time, the customer acting in good faith can normally deduct the VAT he paid to the supplier through his VAT return. Hence, under the reverse charge mechanism VAT is not effectively paid to the supplier. The reverse charge mechanism based on Article 199a o f the VAT Directive is optional for Member States to apply. It allows them to fight this type of fraud in the pre-defined sensitive areas where it typically occurs 2 on their territory . Once suppliers are obliged to use the reverse charge mechanism for such domestic supplies, t he y cann ot charge VAT on their invoice. They will subsequently not receive the VAT amount from their customer and , as a result , such traders cannot disappear with the amount of VAT received. The QRM of Article 199b is an exceptional measure allowing Member States to quickly introduce , in cases of imperative urgency, a temporary reverse charge mechanism for supplies of goods and services in sectors where sudden and massive fraud occurred and which are not listed in Article 199a of the VAT Directive. This procedure is exceptional and extremely quick as the Commission has to react within one month, either with a negative opinion or to confirm in writing to the Member State concerned that it does not object the measure. The Member State may adopt the QRM special measure from the date of receipt of that confirmation. By u sing this mechanism , Member States can bridge the p eriod required for obtaining a ‘ normal ’ derogation under A rticle 395 of the VAT Directive, which can take up to six months . Such a derogation requires a proposal from the Commission and unanimous adoption by Council. Article 199a of the VAT Directive was introduced 3 for the period 2010 until 30 June 2015 and was a first time extended 4 , with amendments, until 31 December 2018. Article 199b of the VAT Directive was introduced 5 for the period 2013 until 31 December 2018. Both Article s 199a and 199b of the VAT Directive were subsequently extended 6 until 30 June 2022 in order to coincide with the initially foreseen date on which the VAT definitive system would enter into force (see more details below) . At the time the application period of Articles 199a and 199b of the VAT Directive would be extended until 30 June 2022 , the Commission presented a r eport on the effects of the mechanisms i ncluded in these articles 7 and concluded, on the basis of contributions of tax administrations and business stakeholders, that the measures in these articles were useful in the fight against fraud. In order to deal with the issue of (MTIC) fraud in a more structural manner , the Commission made a proposal for the introduction of the so-called definitive VAT system, a simpler and fraud-proof system for intra-Union trade of goods 8 . These arrangements, which the Commission proposed to enter into force on 1 July 2022, provide a fundamental response to MTIC fraud. However, the state of play of the ongoing negotiations in the Council indicates that it will not be possible for the definitive VAT system to enter into force on 1 July 2022. In order to allow the negotiations on the definitive system to continue, without putting at risk the available tools in order to combat VAT fraud, it is appropriate to prolong the anti-fraud measures contained in the said articles for another limited period. To extend the application period of Articles 199a and 199b would also allow developing further tools to fight tax evasion. To that end, and in accordance with the Tax Package 9 , the C ommission is prepar ing a proposal in order to modernise the current VAT rules, taking into account the opportunities offered by digital technologies. Under the heading ‘VAT in the digital age’, the Commission will assess VAT reporting obligations, possibly including on Transaction-B ased R eporting (TBR) and a n enhanced system of e-invoicing . This should provide quicker and more detailed information on individual transactions to tax administrations and therefore lower the risk of fraud . Based on such legislative developments, the need to further extend Articles 199a and 199b should be reassessed in the future.
Article 117 
2. Austria may apply one of the two reduced rates provided for in Article 98 to the letting of immovable property for residential use, provided that the rate is not lower than 10 %.
Amendment rationale: CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal The purpose of the current proposal for a Directive amending Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax 1 (hereafter the ‘ VAT Directive ’ ) is to prolong: 1) the possibility for Member States to apply the reverse charge mechanism to combat existing fraud in supplies of goods and services included in Article 199a(1) of the VAT Directive and 2) the possibility to use the Quick Reaction Mechanism (QRM) , as set out in Article 199b of the VAT Directive , to combat fraud via the application of the reverse charge mechanism in very specific cases . As a general rule, Article 193 of the VAT Directive stipulates that the taxable person supplying goods or services is liable to pay VAT. As a derogation, the reverse charge mechanism allows to designate the recipient of the supply as the person liable for the payment of VAT. Under this reverse charge mechanism, VAT is not charged by the supplier but accounted for by the customer (a taxable person) in his VAT return. This VAT is then deducted in that same VAT return and, therefore, insofar this person has a full right of deduction, the result is nil. The reverse charge mechanism is used to combat fraud and in particular Missing Trader Intra-Community (MTIC) fraud. This type of fraud occurs when a trader acquires goods, transported or dispatched from another Member State, by means of a supply exempt from VAT, and sells them on including VAT on the invoice to the customer. After having received the VAT amount from the customer such trader disappears before paying the VAT due to the tax authorities. At the same time, the customer acting in good faith can normally deduct the VAT he paid to the supplier through his VAT return. Hence, under the reverse charge mechanism VAT is not effectively paid to the supplier. The reverse charge mechanism based on Article 199a o f the VAT Directive is optional for Member States to apply. It allows them to fight this type of fraud in the pre-defined sensitive areas where it typically occurs 2 on their territory . Once suppliers are obliged to use the reverse charge mechanism for such domestic supplies, t he y cann ot charge VAT on their invoice. They will subsequently not receive the VAT amount from their customer and , as a result , such traders cannot disappear with the amount of VAT received. The QRM of Article 199b is an exceptional measure allowing Member States to quickly introduce , in cases of imperative urgency, a temporary reverse charge mechanism for supplies of goods and services in sectors where sudden and massive fraud occurred and which are not listed in Article 199a of the VAT Directive. This procedure is exceptional and extremely quick as the Commission has to react within one month, either with a negative opinion or to confirm in writing to the Member State concerned that it does not object the measure. The Member State may adopt the QRM special measure from the date of receipt of that confirmation. By u sing this mechanism , Member States can bridge the p eriod required for obtaining a ‘ normal ’ derogation under A rticle 395 of the VAT Directive, which can take up to six months . Such a derogation requires a proposal from the Commission and unanimous adoption by Council. Article 199a of the VAT Directive was introduced 3 for the period 2010 until 30 June 2015 and was a first time extended 4 , with amendments, until 31 December 2018. Article 199b of the VAT Directive was introduced 5 for the period 2013 until 31 December 2018. Both Article s 199a and 199b of the VAT Directive were subsequently extended 6 until 30 June 2022 in order to coincide with the initially foreseen date on which the VAT definitive system would enter into force (see more details below) . At the time the application period of Articles 199a and 199b of the VAT Directive would be extended until 30 June 2022 , the Commission presented a r eport on the effects of the mechanisms i ncluded in these articles 7 and concluded, on the basis of contributions of tax administrations and business stakeholders, that the measures in these articles were useful in the fight against fraud. In order to deal with the issue of (MTIC) fraud in a more structural manner , the Commission made a proposal for the introduction of the so-called definitive VAT system, a simpler and fraud-proof system for intra-Union trade of goods 8 . These arrangements, which the Commission proposed to enter into force on 1 July 2022, provide a fundamental response to MTIC fraud. However, the state of play of the ongoing negotiations in the Council indicates that it will not be possible for the definitive VAT system to enter into force on 1 July 2022. In order to allow the negotiations on the definitive system to continue, without putting at risk the available tools in order to combat VAT fraud, it is appropriate to prolong the anti-fraud measures contained in the said articles for another limited period. To extend the application period of Articles 199a and 199b would also allow developing further tools to fight tax evasion. To that end, and in accordance with the Tax Package 9 , the C ommission is prepar ing a proposal in order to modernise the current VAT rules, taking into account the opportunities offered by digital technologies. Under the heading ‘VAT in the digital age’, the Commission will assess VAT reporting obligations, possibly including on Transaction-B ased R eporting (TBR) and a n enhanced system of e-invoicing . This should provide quicker and more detailed information on individual transactions to tax administrations and therefore lower the risk of fraud . Based on such legislative developments, the need to further extend Articles 199a and 199b should be reassessed in the future.
Article 118 
Member States which, at 1 January 1991, were applying a reduced rate to the supply of goods or services other than those specified in Annex III may apply the reduced rate, or one of the two reduced rates, provided for in Article 98 to the supply of those goods or services, provided that the rate is not lower than 12 %. The first paragraph shall not apply to the supply of second-hand goods, works of art, collectors' items or antiques, as defined in points (1) to (4) of Article 311(1), subject to VAT in accordance with the margin scheme provided for in Articles 312 to 325 or the arrangements for sales by public auction.
Amendment rationale: CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal The purpose of the current proposal for a Directive amending Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax 1 (hereafter the ‘ VAT Directive ’ ) is to prolong: 1) the possibility for Member States to apply the reverse charge mechanism to combat existing fraud in supplies of goods and services included in Article 199a(1) of the VAT Directive and 2) the possibility to use the Quick Reaction Mechanism (QRM) , as set out in Article 199b of the VAT Directive , to combat fraud via the application of the reverse charge mechanism in very specific cases . As a general rule, Article 193 of the VAT Directive stipulates that the taxable person supplying goods or services is liable to pay VAT. As a derogation, the reverse charge mechanism allows to designate the recipient of the supply as the person liable for the payment of VAT. Under this reverse charge mechanism, VAT is not charged by the supplier but accounted for by the customer (a taxable person) in his VAT return. This VAT is then deducted in that same VAT return and, therefore, insofar this person has a full right of deduction, the result is nil. The reverse charge mechanism is used to combat fraud and in particular Missing Trader Intra-Community (MTIC) fraud. This type of fraud occurs when a trader acquires goods, transported or dispatched from another Member State, by means of a supply exempt from VAT, and sells them on including VAT on the invoice to the customer. After having received the VAT amount from the customer such trader disappears before paying the VAT due to the tax authorities. At the same time, the customer acting in good faith can normally deduct the VAT he paid to the supplier through his VAT return. Hence, under the reverse charge mechanism VAT is not effectively paid to the supplier. The reverse charge mechanism based on Article 199a o f the VAT Directive is optional for Member States to apply. It allows them to fight this type of fraud in the pre-defined sensitive areas where it typically occurs 2 on their territory . Once suppliers are obliged to use the reverse charge mechanism for such domestic supplies, t he y cann ot charge VAT on their invoice. They will subsequently not receive the VAT amount from their customer and , as a result , such traders cannot disappear with the amount of VAT received. The QRM of Article 199b is an exceptional measure allowing Member States to quickly introduce , in cases of imperative urgency, a temporary reverse charge mechanism for supplies of goods and services in sectors where sudden and massive fraud occurred and which are not listed in Article 199a of the VAT Directive. This procedure is exceptional and extremely quick as the Commission has to react within one month, either with a negative opinion or to confirm in writing to the Member State concerned that it does not object the measure. The Member State may adopt the QRM special measure from the date of receipt of that confirmation. By u sing this mechanism , Member States can bridge the p eriod required for obtaining a ‘ normal ’ derogation under A rticle 395 of the VAT Directive, which can take up to six months . Such a derogation requires a proposal from the Commission and unanimous adoption by Council. Article 199a of the VAT Directive was introduced 3 for the period 2010 until 30 June 2015 and was a first time extended 4 , with amendments, until 31 December 2018. Article 199b of the VAT Directive was introduced 5 for the period 2013 until 31 December 2018. Both Article s 199a and 199b of the VAT Directive were subsequently extended 6 until 30 June 2022 in order to coincide with the initially foreseen date on which the VAT definitive system would enter into force (see more details below) . At the time the application period of Articles 199a and 199b of the VAT Directive would be extended until 30 June 2022 , the Commission presented a r eport on the effects of the mechanisms i ncluded in these articles 7 and concluded, on the basis of contributions of tax administrations and business stakeholders, that the measures in these articles were useful in the fight against fraud. In order to deal with the issue of (MTIC) fraud in a more structural manner , the Commission made a proposal for the introduction of the so-called definitive VAT system, a simpler and fraud-proof system for intra-Union trade of goods 8 . These arrangements, which the Commission proposed to enter into force on 1 July 2022, provide a fundamental response to MTIC fraud. However, the state of play of the ongoing negotiations in the Council indicates that it will not be possible for the definitive VAT system to enter into force on 1 July 2022. In order to allow the negotiations on the definitive system to continue, without putting at risk the available tools in order to combat VAT fraud, it is appropriate to prolong the anti-fraud measures contained in the said articles for another limited period. To extend the application period of Articles 199a and 199b would also allow developing further tools to fight tax evasion. To that end, and in accordance with the Tax Package 9 , the C ommission is prepar ing a proposal in order to modernise the current VAT rules, taking into account the opportunities offered by digital technologies. Under the heading ‘VAT in the digital age’, the Commission will assess VAT reporting obligations, possibly including on Transaction-B ased R eporting (TBR) and a n enhanced system of e-invoicing . This should provide quicker and more detailed information on individual transactions to tax administrations and therefore lower the risk of fraud . Based on such legislative developments, the need to further extend Articles 199a and 199b should be reassessed in the future.