Implementing decision 2020/1261 - Amendment of Implementing Decision (EU) 2017/2408 authorising Latvia to derogate from Article 287 of the VAT Directive - Main contents
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Council Implementing Decision (EU) 2020/1261 of 4 September 2020 amending Implementing Decision (EU) 2017/2408 authorising the Republic of Latvia to apply a special measure derogating from Article 287 of Directive 2006/112/EC on the common system of value added tax| Legal instrument | implementing decision |
|---|---|
| Number legal act | Implementing decision 2020/1261 |
| Original proposal | COM(2020)303  |
| CELEX number i | 32020D1261 |
| Document | 04-09-2020; Date of adoption |
|---|---|
| Publication in Official Journal | 10-09-2020; OJ L 296 p. 4-5 |
| Effect | 09-09-2020; Takes effect Date notif. See Art 2 |
| End of validity | 31-12-9999 |
| Notification | 09-09-2020 |
10.9.2020 |
EN |
Official Journal of the European Union |
L 296/4 |
COUNCIL IMPLEMENTING DECISION (EU) 2020/1261
of 4 September 2020
amending Implementing Decision (EU) 2017/2408 authorising the Republic of Latvia to apply a special measure derogating from Article 287 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 the first subparagraph of Article 395(1) thereof,
Having regard to the proposal from the European Commission,
Whereas:
(1) |
Pursuant to Article 287 of Directive 2006/112/EC, Latvia is able to exempt from value added tax (‘VAT’) taxable persons whose annual turnover is no higher than the equivalent in national currency of EUR 17 200 at the conversion rate on the day of its accession to the Union. |
(2) |
By means of Council Implementing Decision 2010/584/EU (2), Latvia was authorised to apply a special measure derogating from Article 287 of Directive 2006/112/EC (‘the derogating measure’) to exempt from VAT taxable persons whose annual turnover was no higher than the equivalent in national currency of EUR 50 000 at the conversion rate on the day of its accession to the Union until 31 December 2013. The derogating measure was extended by means of Council Implementing Decision 2014/796/EU (3) until 31 December 2017. |
(3) |
By means of Council Implementing Decision (EU) 2017/2408 (4), Latvia was authorised to further extend the derogating measure until 31 December 2020, and the exemption threshold was decreased from EUR 50 000 to EUR 40 000. |
(4) |
By letter registered with the Commission on 17 April 2020, Latvia requested authorisation to continue to apply the derogating measure until 31 December 2024, which is the date by which Member States are to transpose Council Directive (EU) 2020/285 (5), which lays down simpler VAT rules for small enterprises. That Directive also allows Member States to exempt taxable persons whose Member State annual turnover does not exceed a threshold of EUR 85 000 or the equivalent in national currency. |
(5) |
Pursuant to the second subparagraph of Article 395(2) of Directive 2006/112/EC, the Commission transmitted the request made by Latvia to the other Member States by letter dated 19 May 2020. By letter dated 20 May 2020, the Commission notified Latvia that it had all the information necessary for appraisal of the request. |
(6) |
The derogating measure is in line with Directive (EU) 2020/285, which seeks to reduce VAT compliance costs for small enterprises, distortions of competition at both national and Union level, and the negative impact of transition from exemption to taxation (the ‘threshold effect’). It also seeks to facilitate compliance by small enterprises as well as monitoring by tax authorities. The threshold of EUR 40 000 is consistent with Article 284 of Directive 2006/112/EC. |
(7) |
The derogating measure is and will remain optional for taxable persons. Taxable persons can still opt for the normal VAT arrangements pursuant to Article 290 of Directive 2006/112/EC. |
(8) |
According to the information provided by Latvia, the derogating measure will only have a negligible effect on the overall amount of the tax revenue of Latvia collected at the stage of final consumption. |
(9) |
The derogating measure will not adversely affect the Union’s own resources accruing from VAT because Latvia will carry out a compensation calculation in accordance with Article 6 of Council Regulation (EEC, Euratom) No 1553/89 (6). |
(10) |
Given the potential positive impact of the derogating measure... |
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