The Council of the EU has adopted amendments to the principal VAT Directive (2006/112) introducing a temporary VAT exemption for importations and for certain supplies in response to the covid-19 pandemic.
The ‘buy and donate’ Directive will introduce a VAT exemption for the purchase of goods and services by the Commission and other EU agencies for distribution free of charge to member states in response to the pandemic. Purchases of goods and services by an EU body on behalf of member states to respond to the emergency posed by the pandemic will temporarily be added to the list of exempted transactions in article 143 of the principal VAT Directive.
Once the emergency situation is over, the relevant VAT rates will be restored. The changes are expected to apply with ‘retroactive’ effect from 1 January 2021.
The Council of the EU has adopted amendments to the principal VAT Directive (2006/112) introducing a temporary VAT exemption for importations and for certain supplies in response to the covid-19 pandemic.
The ‘buy and donate’ Directive will introduce a VAT exemption for the purchase of goods and services by the Commission and other EU agencies for distribution free of charge to member states in response to the pandemic. Purchases of goods and services by an EU body on behalf of member states to respond to the emergency posed by the pandemic will temporarily be added to the list of exempted transactions in article 143 of the principal VAT Directive.
Once the emergency situation is over, the relevant VAT rates will be restored. The changes are expected to apply with ‘retroactive’ effect from 1 January 2021.
