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Amendment of the VAT Directive to allow for the temporary application of a generalised reverse charge procedure

Directiva (UE) 2018/2057 del Consejo, de 20 de diciembre de 2018,

por la que se modifica la Directiva 2006/112/CE en lo que respecta a la aplicación temporal de un mecanismo generalizado de inversión del sujeto pasivo a los suministros de bienes y las prestaciones de servicios por encima de un umbral determinado.

On December 27, Council Directive (EU) 2018/2057, of December 20, 2018, which adds article 199 quarter to Directive 2006/112/EC to regulate a generalized procedure for reverse charge mechanism (GRCM), which may be applied by a Member State until June 30, 2022 , as long as apply the definitive VAT system.

In the GRCM above a threshold of 17,500 EUR per transaction, the VAT debtor is the taxable recipient of the supplies of goods and services, and its application will have to be authorized to the Member State concerned upon request to the Commission under the following conditions:

  1. It is demonstrated that other control measures are insufficient in combating the level of fraud, particularly in relation to carousel fraud.

  2. It is demonstrated that the estimated benefits from compliance with the tax obligations and subsequent collection as a result of the introduction of the GRCM will be higher than the total additional burdens estimated for companies and the tax authorities.

  3. It is demonstrated that companies and authorities will not incur, as a result of the introduction of the GRCM, greater costs than those incurred as a result of the application of other control measures.

  4. Appropriate and effective electronic information obligations are established for all taxpayers and especially for taxpayers who provide or receive the goods or services to which the GRCM may apply, guaranteeing the functioning and effective supervision of its application.

Furthermore, the Member States that do not apply the GRCM shall submit a provisional report to the Commission on the impact of the application of the GRCM by other Member States in their territory.

When there are unforeseen effects of the application of the GRCM on the performance of the internal market, on account of a possible transfer of fraud to other Member States that do not apply the GRCM, the Council may repeal all implementing decisions authorising their application.