Considerations on COM(2024)152 -

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dossier COM(2024)152 - .
document COM(2024)152
date April  8, 2024
 
(1) Pursuant to Article 287, point (10), of Directive 2006/112/EC, the Republic of Latvia (‘Latvia’) may 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.

(2) By Council Implementing Decision (EU) 2017/24083, as amended by Council Implementing Decision (EU) 2020/12614, Latvia was authorised to continue to apply a special measure derogating from Article 287, point (10), of Directive 2006/112/EC to exempt from VAT taxable persons whose annual turnover is no higher than EUR 40 000 until 31 December 2024 ('initial special measure’).

(3) By letter registered with the Commission on 14 December 2023, Latvia requested authorisation to increase the threshold of the initial special measure to EUR 50 000 from 1 January 2024 until 31 December 2024 (‘the special measure’).

(4) Pursuant to Article 395(2), second subparagraph, of Directive 2006/112/EC, the Commission transmitted the request made by Latvia to the other Member States by letter dated 16 January 2024. By letter dated 17 January 2024, the Commission notified Latvia that it had all the information necessary for the appraisal of the request.

(5) The special measure is in line with Council Directive (EU) 2020/2855, which seeks to reduce the VAT compliance burden of small enterprises and mitigate distortions of competition in the internal market, and will enter into force on 1 January 2025.

(6) 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.

(7) According to the information provided by Latvia, the special measure will only have a negligible effect on the overall amount of the tax revenue of Latvia collected at the stage of final consumption.

(8) Following the entry into force of Council Regulation (EU, Euratom) 2021/7696 on 1 January 2021, there is to be no compensation calculation carried out by Latvia with regard to the VAT-based own resource statement for the financial year 2021 onwards.

(9) 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 threshold. Moreover, since the provisions laying down thresholds set out in Article 284 of Directive 2006/112/EC, as amended by Directive (EU) 2020/285, need to be transposed by Member States by 31 December 2024 and to be applied from 1 January 2025, it is appropriate to authorise Latvia to apply the special measure until 31 December 2024.

(10) Implementing Decision (EU) 2017/2408 should therefore be repealed.