Article 285
Member States which have not exercised the option under Article 14 of Directive 67/228/EEC may exempt taxable persons whose annual turnover is no higher than EUR 5 000 or the equivalent in national currency.
The Member States referred to in the first paragraph may grant graduated tax relief to taxable persons whose annual turnover exceeds the ceiling fixed by them for its application.
- By Council Implementing Decision (EU) 2018/1904 (2), the Netherlands was authorised to introduce a special measure derogating from Article 285 of Directive 2006/112/EC to exempt from value added tax (VAT) taxable persons whose annual turnover is no higher than EUR 25 000 (the ‘special measure’).
- Implementing Decision (EU) 2018/1904 is to expire on 31 December 2022. By letter dated 23 August 2022, the Netherlands requested authorisation to continue to apply the special measure for a further period until 31 December 2024, the date by which Member States are to transpose Council Directive (EU) 2020/285 (3). It follows from that Directive that, from 1 January 2025, Member States will be allowed to exempt from VAT the supply of goods and services made by taxable persons whose annual turnover in a given Member State does not exceed a threshold of EUR 85 000 or the equivalent in national currency.
- Pursuant to Article 395(2), second subparagraph, of Directive 2006/112/EC, the Commission transmitted the request made by the Netherlands to the other Member States, except Spain, by letter dated 25 August 2022. By letter dated 26 August, the Commission transmitted that request to Spain. By letter dated 29 August 2022, the Commission notified the Netherlands that it had all the information necessary for the appraisal of the request.
- The special measure is in line with Directive 2006/112/EC, as amended by Directive (EU) 2020/285, which seeks to reduce the compliance burden of small enterprises and avoid distortions of competition in the internal market.
- The special measure will remain optional for taxable persons as they may still opt for the normal VAT arrangements pursuant to Article 290 of Directive 2006/112/EC.
- According to information provided by the Netherlands, the special measure will only have a negligible effect on the overall amount of the tax revenue collected at the stage of final consumption.
- Following the entry into force of Council Regulation (EU, Euratom) 2021/769 (4), there is to be no compensation calculation carried out by the Netherlands with regard to the VAT-based own resource statement for the financial year 2022 onwards.
- Given that the special measure has had a positive impact on the simplification of VAT-related obligations, as it has reduced the administrative burden and compliance costs for both small enterprises and tax authorities, and given that it lacks any major impact on the total VAT revenue generated, it is appropriate to allow the Netherlands to apply the special measure set out in Implementing Decision (EU) 2018/1904.
- The application of the special measure should be limited in time. The time limit should be sufficient to allow the Commission to evaluate the effectiveness and appropriateness of the current threshold. Moreover, pursuant to Article 3(1) of Directive (EU) 2020/285, Member States are to adopt and publish, by 31 December 2024, the laws, regulations and administrative provisions necessary to comply with Article 1 of that Directive, and are to apply those provisions from 1 January 2025. It is therefore appropriate to authorise the Netherlands to apply the special measure until 31 December 2024.
- Implementing Decision (EU) 2018/1904 should therefore be amended accordingly
Source: eur-lex.europa.eu
