Directive 2019/2235 - Amendment of the VAT Directive and Directive 2008/118/EC concerning the general arrangements for excise duty as regards defence efforts within the Union framework - Main contents

EN

Official Journal of the European Union

L 336/10

Council Directive 2006/112/EC (3) provides, under certain conditions, for an exemption from value added tax (VAT) for goods and services supplied to and goods imported by the armed forces of any State party to the North Atlantic Treaty when such forces take part in the common defence effort outside their own State.

Council Directive 2008/118/EC (4) provides for an exemption from excise duty for excise goods intended to be used by the armed forces of any State party to the North Atlantic Treaty other than the Member State within which the excise duty is chargeable, for the use of those forces, for the civilian staff accompanying them or for supplying their messes or canteens, subject to conditions and limitations laid down by the host Member State.

Such exemptions are not available where the armed forces of a Member State take part in activities under the common security and defence policy (CSDP) as set out in Section 2 of Chapter 2 of Title V of the Treaty on European Union. Priority should be given to the need to improve European capabilities in the field of defence and crisis management and to strengthen Union security and defence. In their joint communication of 28 March 2018 on the Action Plan on Military Mobility, the High Representative of the Union for Foreign Affairs and Security Policy and the Commission recognised the overall need for aligning the VAT treatment of defence efforts undertaken within the Union framework and the North Atlantic Treaty Organization (NATO) umbrella.

A defence effort carried out for the implementation of a Union activity under the CSDP covers military missions and operations, activities of battlegroups, mutual assistance, permanent structured cooperation (PESCO) projects and activities of the European Defence Agency (EDA). It should not, however, cover activities under the solidarity clause set out in Article 222 of the Treaty on the Functioning of the European Union or any other bilateral or multilateral activities between Member States that do not relate to a defence effort carried out for the implementation of a Union activity under the CSDP.

An exemption from VAT should thus be introduced to cover the supply of goods or services intended either for the use of the armed forces of a Member State or of the civilian staff accompanying them or for supplying their messes or canteens when such forces take part in a defence effort carried out for the implementation of a Union activity under the CSDP outside their Member State. Supplies of goods or services for the armed forces of the Member State in which those goods or services are supplied should be excluded from the VAT exemption.

In addition, it is necessary to provide for an exemption from VAT where goods imported by the armed forces of a Member State are intended either for the use of those forces or of the civilian staff accompanying them or for supplying their messes or canteens when such forces take part in a defence effort...