EU: Fighting VAT Fraud and VAT Derogations
The European Commission has published two studies on the possible impact of measures envisaged for fighting fraud. One of these measures is the reduction of timeframes for the collection and exchange of information on intra-Community transactions. The other is the collection and exchange of more detailed information on intra-Community transactions.
VAT Derogations
The EU Council has adopted a directive and a decision on VAT derogations in relation to the Czech Republic, Cyprus, Malta, Poland, Slovenia, and the UK.
- In relation to the UK, the derogation allows the UK to continue to apply a restriction (to 50%) on the right to deduct input VAT incurred on the hire or lease of motor cars not exclusively used for business purposes.
- The temporary derogations that allowed the Czech Republic, Cyprus, Malta, Poland and Slovenia to apply reduced VAT rates on certain services have been extended from 2007 to 2010.