Date: 2019-09-27Category: Not ApplicableState: Union GovernmentCountry: Europe
Council Implementing Decision (EU) 2019/1593 of 24 September 2019 amending Implementing Decision 2013/676/EU authorising Romania to continue to apply a special measure derogating from Article 193 of Directive 2006/112/EC on the common system of value added tax
Executive Summary:
This Council Implementing Decision EU 2019/1593 amends Implementing Decision 2013/676/EU, authorizing Romania to continue applying a special measure derogating from Article 193 of Directive 2006/112/EC on the common system of VAT. It extends the authorization for Romania to designate recipients of wood product supplies as liable for VAT payment until December 31, 2022. The decision also removes the article regarding further extensions of the derogation.
Key Points / Main Content:
* **Extension of Special Measure:**
* Romania is authorized to continue applying a special measure designating the taxable person to whom supplies of wood products are made as the person liable for VAT payment.
* This authorization is extended until December 31, 2022.
* **Justification for Extension:**
* The factual situation justifying the special measure remains unchanged.
* The measure has proven effective in reducing tax evasion, according to Romanian authorities.
* The measure is proportionate and confined to specific operations in a sector with significant tax evasion issues.
* Continued application of the measure will not adversely affect fraud prevention at the retail level, in other sectors, or in other Member States.
* **Future Derogations:**
* Romania is expected to implement conventional measures to combat VAT fraud in the timber and wood sector.
* The goal is to eliminate the need for further derogations from Article 193 of Directive 2006/112/EC.
* Specific provisions concerning further requests to extend the derogation beyond December 31, 2022, are not included.
* **Amendments to Implementing Decision 2013/676/EU:**
* Article 1: "31 December 2019" is replaced by "31 December 2022."
* Article 3 is deleted.
Impact Analysis:
* Romania
* Impact: Authorized to continue applying the special VAT measure on wood products until December 31, 2022; Expected to implement conventional measures to combat VAT fraud in the timber sector.
* Action Required: Continue applying the special VAT measure; Develop and implement conventional measures to prevent VAT fraud in the timber sector to eliminate the need for future derogations.
* European Commission
* Impact: Monitors Romania's implementation of conventional measures to combat VAT fraud in the timber sector.
* Action Required: Monitor and assess Romania's progress in implementing conventional measures to combat VAT fraud in the timber sector.
* Other Member States
* Impact: No direct adverse impact expected.
* Action Required: No specific action required.
Key Entities Referenced
European Union: A political and economic union of member states located primarily in Europe.
Romania: A Member State of the European Union that was authorized to apply a special measure derogating from Article 193 of Directive 2006/112/EC.
Directive 2006/112/EC: Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax.
Council Implementing Decision (EU) 2019/1593: Council Implementing Decision (EU) 2019/1593 of 24 September 2019 amending Implementing Decision 2013/676/EU.
Council Implementing Decision 2013/676/EU: Council Implementing Decision 2013/676/EU authorising Romania to continue to apply a special measure derogating from Article 193 of Directive 2006/112/EC.
Value Added Tax (VAT): A consumption tax assessed on the value added to goods and services.
European Commission: The executive branch of the European Union, responsible for proposing legislation, implementing decisions, and managing the EU's budget.
Brussels: The location where the decision was done; the de facto capital of the European Union, located in Belgium.
27.9.2019 EN Official Journal of the European Union L 248/69
COUNCIL IMPLEMENTING DECISION (EU) 2019/1593
of 24 September 2019
amending Implementing Decision 2013/676/EU authorising Romania to continue to apply a special
measure derogating from Article 193 of Directive 2006/112/EC on the common system of value
added tax
THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty on the Functioning of the European Union,
Having regard to Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax (1),
and in particular Article 395(1) thereof,
Having regard to the proposal from the European Commission,
Whereas:
(1) Council Implementing Decision 2010/583/EU (2) and, subsequently, Council Implementing Decision
2013/676/EU (3) authorised Romania to apply a special measure designating the taxable person to whom
supplies of wood products by taxable persons are made as the person liable for the payment of value added tax
(VAT) on those supplies. The authorisation was extended until 31 December 2019 by Council Implementing
Decision (EU) 2016/1206 (4).
(2) By letter registered with the Commission on 11 March 2019, Romania requested authorisation to continue to
apply the special measure beyond 31 December 2019. The request was accompanied by a report on the
application of that measure, as required by Implementing Decision 2013/676/EU.
(3) By letters dated 9 April 2019, the Commission informed the other Member States of the request made by
Romania. By letter dated 10 April 2019, the Commission notified Romania that it had all the information
necessary to consider the request.
(4) According to the information provided by Romania, the factual situation which justified application of the special
measure has not changed. Moreover, analysis by the Romanian authorities indicates that the measure has proved
to be effective in reducing tax evasion.
(5) The special measure is proportionate to the objectives pursued since it is confined to very specific operations in
a sector which poses considerable problems with regard to tax evasion and avoidance. Furthermore, continued
application of the measure would not have any adverse impact on the prevention of fraud at the retail level, in
other sectors or in other Member States.
(6) Romania should therefore be authorised to continue to apply the special measure for a further limited period of
time until 31 December 2022.
(7) Derogations are in general authorised for a limited period of time to allow an assessment of whether the special
measures are appropriate and effective. Derogations give Member States time until the expiry of the special
measures to introduce other conventional measures to tackle the problem in question. Derogations that permit
use of the reverse charge mechanism are only granted exceptionally for specific areas where fraud occurs, and
constitute a means of last resort. Romania should therefore implement other conventional measures to fight and
prevent further spreading of VAT fraud in the sector of timber and wood and consequently should no longer
need to derogate from Article 193 of Directive 2006/112/EC with regard to such supplies.
(1) OJ L 347, 11.12.2006, p. 1.
(2) Council Implementing Decision 2010/583/EU of 27 September 2010 authorising Romania to introduce a special measure derogating
from Article 193 of Directive 2006/112/EC on the common system of value added tax (OJ L 256, 30.9.2010, p. 27).
(3) Council Implementing Decision 2013/676/EU of 15 November 2013 authorising Romania to continue to apply a special measure
derogating from Article 193 of Directive 2006/112/EC on the common system of value added tax (OJ L 316, 27.11.2013, p. 31).
(4) Council Implementing Decision (EU) 2016/1206 of 18 July 2016 amending Implementing Decision 2013/676/EU authorising Romania
to continue to apply a special measure derogating from Article 193 of Directive 2006/112/EC on the common system of value added tax
(OJ L 198, 23.7.2016, p. 47).L 248/70 EN Official Journal of the European Union 27.9.2019
(8) It is therefore not necessary at this stage to include specific provisions in Implementing Decision 2013/676/EU
concerning further requests to extend the derogation authorised by that Implementing Decision beyond
31 December 2022.
(9) The special measure has no adverse impact on the Union's own resources accruing from VAT.
(10) Implementing Decision 2013/676/EU should therefore be amended accordingly,
HAS ADOPTED THIS DECISION:
Article 1
Council Implementing Decision 2013/676/EU is amended as follows:
(1) in Article 1, the date ‘31 December 2019’ is replaced by the date ‘31 December 2022’;
(2) Article 3 is deleted.
Article 2
This Decision shall take effect on the date of its notification.
Article 3
This Decision is addressed to Romania.
Done at Brussels, 24 September 2019.
For the Council
The President
K. KULMUNI