World news
14 December 2018

New EU legislative acts in the field of VAT were published before the end of this year

Several changes in the field of VAT were introduced at EU level, inter alia measures intended to improve the current VAT system – so called “quick fixes”, the possibility to apply reduced VAT rates to electronic publications, reaching agreement on the proposed possibility of application of a generalised reverse-charge mechanism, as well as prolongation of the optional domestic VAT reverse-charge mechanism.

Elvíra Ungerová

Quick fixes

On 7 December 2018, an amendment to the EU VAT Directive together with amendments of the related Council Regulations were published in the Official journal of the EU, introducing short-term measures intended to harmonise and simplify certain VAT rules, until the definitive VAT system is implemented. These “quick fixes” cover the following areas:

  • call-off stock: simplification and harmonisation of treatment for call-off stock arrangements, where at the time of the transfer of goods to another EU member state, the supplier already knows the identity of the person acquiring the goods, to whom these goods will be supplied at a later stage and after they have arrived in the EU member state of destination,

  • the VAT identification number: the identification number of the customer will become a mandatory condition to benefit from a VAT exemption for the intra-EU supply of goods,

  • chain transactions:  uniform criteria established to enhance legal certainty in determining the VAT treatment of chain transactions and

  • proof of intra-EU supply: simplification and harmonisation for the documentary evidence required to claim a VAT exemption for intra-EU supplies.

    These new arrangements are due to apply in the EU member states from 1 January 2020.

Possibility to apply reduced VAT rates to electronic publications

On 14 November 2018, an amendment to the EU VAT Directive was published in the Official journal of the EU, which allows EU member states to apply reduced VAT rates also to electronic publications if they wish to do so. Super-reduced and zero rates are only allowed for EU member states that currently apply them to publications on physical means of support.

The new rules should apply only temporarily, pending the introduction of a new, definitive VAT system. Proposals for the new system should allow member states more flexibility than at present in setting VAT rates.

Optional domestic reverse charge mechanism and Quick Reaction Mechanism were prolonged

On 12 November 2018, a directive amending the EU VAT directive was published in the Official journal of the EU, the purpose of which is to prolong the possibility of EU 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 EU VAT Directive,

  • use the Quick Reaction Mechanism (QRM) to combat VAT fraud more quickly and efficiently.

Measures included in Articles 199a and 199b of the EU VAT Directive were prolonged until 30 June 2022, the date on which the definitive regime for intra-EU B2B supplies of goods should enter into force.

Temporary generalised VAT reverse-charge mechanism

On 2 October 2018, the Economic and Financial Affairs Council (ECOFIN) reached a general approach on the proposed possibility of application of a generalised reverse charge mechanism.

The proposed directive should allow EU member states that are most severely affected by VAT fraud to apply temporarily a generalised reverse-charge mechanism (shifting liability to pay VAT from the supplier to the customer). EU member states will be able to use the generalised reverse charge mechanism only until 30 June 2022 (until the definitive VAT system is in place), and under very strict technical conditions.

The European Parliament gave green light to the proposal on 11 December 2018. The directive is expected to be adopted without further discussion.


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