European Communities (Value-Added Tax) Regulations 2006 (S.I. No. 663 of 2006)

The Minister for Finance has made Regulations under the powers conferred on him by section 3 of the European Communities Act 1972 (No. 27 of 1972) to cater for the entry into force of Council Directive 2006/112/EC of 28 November 2006 (OJ No. L 347 of 11 December 2006) and Council Directive 2006/98/EC of 27 November 2006 (OJ No. L 363 of 20 December 2006).

Council Directive 2006/112/EC replaces the Sixth VAT Directive. Consequently, these Regulations provide for the updating of the references to the Sixth Directive in the VAT Act.

Council Directive 2006/98/EC (OJ No. L 363 of 20 December 2006) deals with the accession to the EU of the Republic of Bulgaria and Romania. These Regulations amend the application of transitional VAT measures to goods in transit between the two new accession countries (i.e. the Republic of Bulgaria and Romania) and Ireland on 1 January 2007.

The accession of two new Member States requires the existing Member States to treat goods from those countries as Community goods rather than third country goods with effect from 1 January 2007. On accession, the intra-Community arrangements for taxing trade between Member States will replace the system of imposing tax on importation and remission of tax on exportation. From the moment of accession transitional measures are needed to address the tax position of goods in transit by continuing to treat these goods as third country goods until they are cleared out of the transit system. The same will apply to goods in customs suspension arrangements.

A copy of these Regulations will be made available in the New Year.