Introductory text

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^f1, and in particular Article 395(1) thereof,

Having regard to the proposal from the European Commission,

Whereas:

By letters from the Czech Republic registered with the Commission on 26 September 2011 and 5 November 2012, and by letter from the Republic of Poland registered with the Commission on 8 June 2012, the Czech Republic and the Republic of Poland requested authorisation to apply special measures derogating from Article 5 of Directive 2006/112/EC in relation to the construction and maintenance of border bridges and common road sections between the two Member States.

In accordance with Article 395(2) of Directive 2006/112/EC, the Commission informed the other Member States, by letter dated 5 December 2012, of the requests made by the Czech Republic and by the Republic of Poland. By letter dated 10 December 2012, the Commission notified the Czech Republic and the Republic of Poland that it had all the information necessary to consider the requests.

With respect to the supply of goods or services and intra-Community acquisition of goods intended for the maintenance of border bridges and common road sections listed in Annex I and for the construction and subsequent maintenance of border bridges listed in Annex II, the bridges and common road sections, as well as their construction sites, should be regarded as being entirely within the territory either of the Czech Republic or of the Republic of Poland in accordance with an agreement to be concluded between them on the construction and maintenance of bridges and maintenance of common road sections on the Czech-Polish State border. In the absence of special measures, it would be necessary, for each supply of goods or services and intra-Community acquisition of goods, to determine whether the place of taxation is the Czech Republic or the Republic of Poland. Work at a border bridge and common road section carried out within the territory of the Czech Republic would be subject to value added tax (VAT) in the Czech Republic while that carried out within the Republic of Poland’s territory would be subject to VAT in the Republic of Poland.

The purpose of the request for the derogation from Article 5 of Directive 2006/112/EC is therefore to simplify the procedure for collecting VAT with respect to the construction and maintenance of the border bridges and of common road sections of the two Member States.

The derogation could affect the overall amount of the tax revenue of the Member States collected at the stage of final consumption only to a negligible extent and has no negative impact on the Union’s own resources accruing from valued added tax,

HAS ADOPTED THIS DECISION: