Council Directive (EU) 2022/542 of 5 April 2022 amending Directives 2006/112/EC and (EU) 2020/285 as regards rates of value added tax

‘2 The rate applicable to the importation of goods shall be that applied to the supply of like goods within the territory of the Member State.’;

‘3 By way of derogation from paragraph 2 of this Article, Member States applying a standard rate to the supply of works of art, collectors’ items and antiques listed in Annex IX, Parts A, B and C, may apply a reduced rate as provided for in Article 98(1), first subparagraph, to the importation of those goods within the territory of the Member State.’;

1 Member States may apply a maximum of two reduced rates. The reduced rates shall be fixed as a percentage of the taxable amount, which shall not be less than 5 % and shall apply only to the supplies of goods and services listed in Annex III. Member States may apply the reduced rates to supplies of goods or services covered in a maximum of 24 points in Annex III.

2 Member States may, in addition to the two reduced rates referred to in paragraph 1 of this Article, apply a reduced rate lower than the minimum of 5 % and an exemption with deductibility of the VAT paid at the preceding stage to supplies of goods or services covered in a maximum of seven points in Annex III. The reduced rate lower than the minimum of 5 % and the exemption with deductibility of the VAT paid at the preceding stage may only be applied to supplies of goods or services covered in the following points of Annex III: (a) points (1) to (6) and (10c); (b) any other point of Annex III falling under the options provided for in Article 105a(1). For the purposes of point (b) of the second subparagraph of this paragraph, the transactions regarding housing referred to in Article 105a(1), second subparagraph, shall be regarded as falling under Annex III, point (10). Member States applying, on 1 January 2021, reduced rates lower than the minimum of 5 % or granting exemptions with deductibility of the VAT paid at the preceding stage to supplies of goods or services covered in more than seven points in Annex III, shall limit the application of those reduced rates or the granting of those exemptions to comply with the first subparagraph of this paragraph by 1 January 2032 or by the adoption of the definitive arrangements referred to in Article 402, whichever is the earlier. Member States shall be free to determine to which supplies of goods or services they will continue to apply those reduced rates or grant those exemptions.

3 The reduced rates and the exemptions referred to in paragraphs 1 and 2 of this Article shall not apply to electronically supplied services, except to those listed in Annex III, points (6), (7), (8) and (13).

4 When applying the reduced rates and exemptions provided for in this Directive, Member States may use the Combined Nomenclature or the statistical classification of products by activity, or both, to establish the precise coverage of the category concerned.’;

The reduced rates and the exemptions referred to in Article 98(1) and (2) shall not apply to supplies of works of art, collectors’ items and antiques to which the special arrangements of Title XII, Chapter 4, are being applied.’;

By 31 December 2028 and every five years thereafter, the Commission shall submit to the Council a report on the scope of Annex III, accompanied by any appropriate proposals, where necessary.’;

1 Where an authorisation has been granted to a Member State by the Commission in accordance with Article 53, first paragraph, of Council Directive 2009/132/EC to apply an exemption on goods imported for the benefit of disaster victims, that Member State may grant an exemption with deductibility of the VAT paid at the preceding stage under the same conditions, in respect of the intra-Community acquisitions and the supply of those goods and services related to such goods, including rental services.

2 A Member State wishing to apply the measure referred to in paragraph 1 shall inform the VAT Committee.

3 When goods or services acquired by the organisations benefiting from the exemption laid down in paragraph 1 of this Article are used for purposes other than those provided for in Title VIII, Chapter 4, of Directive 2009/132/EC, the use of such goods or services shall be subject to VAT under the conditions applicable at the time when the conditions for the exemption cease to be fulfilled.

1 Austria may, in the communes of Jungholz and Mittelberg (Kleines Walsertal), apply a second standard rate which is lower than the corresponding rate applied in the rest of Austria but not less than 15 %.

2 Greece may apply rates up to 30 % lower than the corresponding rates applied in mainland Greece in the departments of Lesbos, Chios, Samos, the Dodecanese and the Cyclades, and on the islands of Thassos, the Northern Sporades, Samothrace and Skiros.

3 Portugal may, in the case of transactions carried out in the autonomous regions of the Azores and Madeira and of direct importation into those regions, apply rates lower than those applicable on the mainland.

4 Portugal may apply one of the two reduced rates provided for in Article 98(1) to the tolls on bridges in the Lisbon area.’;

1 Member States which, in accordance with Union law, on 1 January 2021, were applying reduced rates lower than the minimum laid down in Article 98(1) or were granting exemptions with deductibility of the VAT paid at the preceding stage, to the supply of goods or services listed in points other than Annex III, points (1) to (6) and (10c), may, in accordance with Article 98(2), continue to apply those reduced rates or grant those exemptions, without prejudice to paragraph 4 of this Article. Member States which, in accordance with Union law, on 1 January 2021, were applying reduced rates lower than the minimum laid down in Article 98(1) to transactions regarding housing not being part of a social policy, may, in accordance with Article 98(2), continue to apply those reduced rates. Member States shall communicate to the VAT Committee the text of the main provisions of national law and the conditions for the application of the reduced rates and exemptions relating to Article 98(2), second subparagraph, point (b), no later than 7 July 2022. Without prejudice to paragraph 4 of this Article, reduced rates lower than the minimum laid down in Article 98(1), or exemptions with deductibility of the VAT paid at the preceding stage may be applied by other Member States, in accordance with Article 98(2), first subparagraph, to the same supplies of goods or services as those referred to in the first and second subparagraphs of this paragraph and under the same conditions as those applicable on 1 January 2021 in the Member States referred to in the first and second subparagraphs of this paragraph.

2 Member States which, in accordance with Union law, on 1 January 2021, were applying reduced rates lower than 12 %, including reduced rates lower than the minimum laid down in Article 98(1), or were granting exemptions with deductibility of the VAT paid at the preceding stage, to the supply of goods or services other than those listed in Annex III, may, in accordance with Article 98(1) and (2), continue to apply those reduced rates or grant those exemptions until 1 January 2032 or until the adoption of the definitive arrangements referred to in Article 402, whichever is the earlier, without prejudice to paragraph 4 of this Article.

3 Member States which, in accordance with Union law, on 1 January 2021, were applying reduced rates not lower than 12 % to the supply of goods or services other than those listed in Annex III, may, in accordance with Article 98(1), first subparagraph, continue to apply those reduced rates, without prejudice to paragraph 4 of this Article. Member States shall communicate to the VAT Committee the text of the main provisions of national law and conditions for the application of the reduced rates referred to in the first subparagraph of this paragraph no later than 7 July 2022. Without prejudice to paragraph 4 of this Article, reduced rates not lower than 12 % may be applied by other Member States, in accordance with Article 98(1), first subparagraph, to the same supplies of goods or services as those referred to in the first subparagraph of this paragraph and under the same conditions as those applicable on 1 January 2021 in the Member States referred to in the first subparagraph of this paragraph.

4 By way of derogation from paragraphs 1, 2 and 3, the reduced rates or exemptions with deductibility of the VAT paid at the preceding stage on fossil fuels, other goods with a similar impact on greenhouse gas emissions, such as peat, and wood used as firewood shall cease to apply by 1 January 2030. The reduced rates or exemptions with deductibility of the VAT paid at the preceding stage on chemical pesticides and chemical fertilisers shall cease to apply by 1 January 2032.

5 Member States which, in accordance with the fourth subparagraph of paragraph 1 of this Article, the third subparagraph of paragraph 3 of this Article and Article 105b, wish to apply the reduced rates not lower than 12 %, the reduced rates lower than the minimum laid down in Article 98(1), or the exemptions with deductibility of the VAT paid at the preceding stage, shall, by 7 October 2023, adopt the detailed rules governing the exercise of those options. They shall communicate to the VAT Committee the text of the main provisions of national law they have adopted.

6 By 1 July 2025, on the basis of the information provided by Member States, the Commission shall present to the Council a report with a comprehensive list indicating the goods and services referred to in paragraphs 1 and 3 of this Article and in Article 105b to which the reduced rates, including the reduced rates lower than the minimum laid down in Article 98(1), or the exemptions with deductibility of the VAT paid at the preceding stage are applied in Member States.

Member States which, in accordance with Union law, on 1 January 2021, were applying reduced rates not lower than the minimum of 5 % to transactions regarding housing not being part of a social policy, may, in accordance with Article 98(1), first subparagraph, continue to apply those reduced rates. In such a case, the reduced rates to be applied to such transactions shall as of 1 January 2042 not be lower than 12 %. Member States shall communicate to the VAT Committee the text of the main provisions of national law and conditions for the application of the reduced rates referred to in the first paragraph no later than 7 July 2022. A reduced rate not lower than 12 % may be applied by other Member States, in accordance with Article 98(1), first subparagraph, to the transactions referred to in the first paragraph of this Article under the same conditions as those applicable on 1 January 2021 in the Member States referred to in the first paragraph of this Article. For the purposes of Article 98(1), third subparagraph, the transactions referred to in this Article shall be regarded as falling under Annex III, point (10).’;

1 The annual turnover serving as a reference for applying the exemption provided for in Article 284 shall consist of the following amounts, exclusive of VAT: (a) the value of supplies of goods and services, in so far as they would be taxed were they supplied by a non-exempt taxable person; (b) the value of transactions which are exempt, with deductibility of the VAT paid at the preceding stage, pursuant to Article 98(2) or Article 105a; (c) the value of transactions which are exempt pursuant to Articles 146 to 149 and Articles 151, 152 and 153; (d) the value of transactions which are exempt pursuant to Article 138 where the exemption provided for in that Article applies; (e) the value of real estate transactions, financial transactions as referred to in Article 135(1), points (b) to (g), and insurance and reinsurance services, unless those transactions are ancillary transactions.

2 Disposals of the tangible or intangible capital assets of a taxable person shall not be taken into account for the purposes of calculating the turnover referred to in paragraph 1.”;’.

1 Member States shall adopt and publish, by 31 December 2024, the laws, regulations and administrative provisions necessary to comply with Article 1, points (1), (2), (5), (7), (12) as regards the deletion of Article 103 of Directive 2006/112/EC, and (20) and Article 2. They shall apply those measures from 1 January 2025. Member States may apply the laws, regulations and administrative provisions regarding Annex III, points (7) and (13), relating to access to the live-streaming of events or visits covered by those points, and point (26), of Directive 2006/112/EC, listed in the Annex to this Directive, from 1 January 2025.

2 Member States shall immediately communicate to the Commission the text of the laws, regulations, and administrative provisions which they adopt in the field covered by this Directive.

3 When Member States adopt the measures referred to in paragraphs 1 and 2, they shall contain a reference to this Directive or be accompanied by such a reference on the occasion of their official publication. Member States shall determine how such reference is to be made.

On the basis of an assessment of whether future-proof solutions adapted to the digital age and aligned with the objective of a destination-based VAT system are possible, the Commission shall, where appropriate, submit a legislative proposal to amend the relevant provisions of this Directive as far as the margin scheme laid down in Title XII, Chapter 4, of Directive 2006/112/EC is concerned.

This Directive shall enter into force on the date of its publication in the Official Journal of the European Union.

This Directive is addressed to the Member States.