What changed, Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax

− In order to prevent double taxation, non-taxation or distortion of competition, Member States may, with regard to services the place of supply of which is governed by Articles 44, 45, 56, 58 and 59:
− Member States which, at 1 January 1993, were not availing themselves of the option under Article 98 of applying a reduced rate may, if they avail themselves of the option under Article 89, provide that in respect of the supply of works of art, as referred to in Article 103(2), the taxable amount is …
− **1.** Member States may apply either one or two reduced rates.
− **2.** The reduced rates shall apply only to supplies of goods or services in the categories set out in Annex III.
− The reduced rates shall not apply to electronically supplied services with the exception of those falling under point (6) of Annex III.
− **3.** When applying the reduced rates provided for in paragraph 1 to categories of goods, Member States may use the Combined Nomenclature to establish the precise coverage of the category concerned.
− ### Article 99
− **1.** The reduced rates shall be fixed as a percentage of the taxable amount, which may not be less than 5 %.
− **2.** Each reduced rate shall be so fixed that the amount of VAT resulting from its application is such that the VAT deductible under Articles 167 to 171 and Articles 173 to 177 can normally be deducted in full.
− **3.** By way of derogation from paragraphs 1 and 2 of this Article, and in addition to the rates referred to in paragraph 1 of Article 98, Member States which, on 1 January 2017, applied, in accordance with Union law, reduced rates lower than the minimum laid down in this Article or granted exempti…
− On the basis of a report from the Commission, the Council shall, starting in 1994, review the scope of the reduced rates every two years.
− The Council may, in accordance with Article 93 of the Treaty, decide to alter the list of goods and services set out in Annex III.
− ### Article 101
− By 30 June 2007 at the latest the Commission shall present to the European Parliament and the Council an overall assessment report on the impact of reduced rates applying to locally supplied services, including restaurant services, notably in terms of job creation, economic growth and the proper fun…
− ### Article 102
− After consultation of the VAT Committee, each Member State may apply a reduced rate to the supply of natural gas, electricity or district heating.
− Austria may, in the communes of Jungholz and Mittelberg (Kleines Walsertal), apply a second standard rate which is lower than the corresponding rate applied in the rest of Austria but not less than 15 %.
− ### Article 104a
− Cyprus may apply one of the two reduced rates provided for in Article 98 to the supply of liquid petroleum gas (LPG) in cylinders.
− ### Article 105
− **1.** Portugal may apply one of the two reduced rates provided for in Article 98 to the tolls on bridges in the Lisbon area.
− **2.** Portugal may, in the case of transactions carried out in the autonomous regions of the Azores and Madeira and of direct importation into those regions, apply rates lower than those applying on the mainland.
− ## CHAPTER 4 / Special provisions applying until the adoption of definitive arrangements
− ### Article 109
− Pending introduction of the definitive arrangements referred to in Article 402, the provisions laid down in this Chapter shall apply.
− ### Article 110
− Member States which, at 1 January 1991, were granting exemptions with deductibility of the VAT paid at the preceding stage or applying reduced rates lower than the minimum laid down in Article 99 may continue to grant those exemptions or apply those reduced rates.
− The exemptions and reduced rates referred to in the first paragraph must be in accordance with Community law and must have been adopted for clearly defined social reasons and for the benefit of the final consumer.
− ### Article 111
− Subject to the conditions laid down in the second paragraph of Article 110, exemptions with deductibility of the VAT paid at the preceding stage may continue to be granted in the following cases:
+ In order to prevent double taxation, non-taxation or distortion of competition, Member States may, with regard to services the place of supply of which is governed by Articles 44 and 45, Article 54(1), second subparagraph, and Articles 56, 58 and 59:
+ Member States which, on 1 January 1993, were not availing themselves of the option under Article 98 of applying a reduced rate may, if they avail themselves of the option under Article 89, provide that in respect of the supply of works of art, as referred to in Annex III, point (26), the taxable amo…
+ **1.** Member States may apply a maximum of two reduced rates.
+ The reduced rates shall be fixed as a percentage of the taxable amount, which shall not be less than 5 % and shall apply only to the supplies of goods and services listed in Annex III.
+ Member States may apply the reduced rates to supplies of goods or services covered in a maximum of 24 points in Annex III.
+ **2.** Member States may, in addition to the two reduced rates referred to in paragraph 1 of this Article, apply a reduced rate lower than the minimum of 5 % and an exemption with deductibility of the VAT paid at the preceding stage to supplies of goods or services covered in a maximum of seven poin…
+ The reduced rate lower than the minimum of 5 % and the exemption with deductibility of the VAT paid at the preceding stage may only be applied to supplies of goods or services covered in the following points of Annex III:
+ (a) points (1) to (6) and (10c);
+ (b) any other point of Annex III falling under the options provided for in Article 105a(1).
+ For the purposes of point (b) of the second subparagraph of this paragraph, the transactions regarding housing referred to in Article 105a(1), second subparagraph, shall be regarded as falling under Annex III, point (10).
+ Member States applying, on 1 January 2021, reduced rates lower than the minimum of 5 % or granting exemptions with deductibility of the VAT paid at the preceding stage to supplies of goods or services covered in more than seven points in Annex III, shall limit the application of those reduced rates …
+ **3.** The reduced rates and the exemptions referred to in paragraphs 1 and 2 of this Article shall not apply to electronically supplied services, except to those listed in Annex III, points (6), (7), (8) and (13).
+ **4.** When applying the reduced rates and exemptions provided for in this Directive, Member States may use the Combined Nomenclature or the statistical classification of products by activity, or both, to establish the precise coverage of the category concerned.
+ By 31 December 2028 and every five years thereafter, the Commission shall submit to the Council a report on the scope of Annex III, accompanied by any appropriate proposals, where necessary.
+ ## Section 2a / Exceptional situations
+ ### Article 101a
+ **1.** Where an authorisation has been granted to a Member State by the Commission in accordance with Article 53, first paragraph, of Council Directive 2009/132/EC (1) to apply an exemption on goods imported for the benefit of disaster victims, that Member State may grant an exemption with deductibi…
+ **2.** A Member State wishing to apply the measure referred to in paragraph 1 shall inform the VAT Committee.
+ **3.** When goods or services acquired by the organisations benefiting from the exemption laid down in paragraph 1 of this Article are used for purposes other than those provided for in Title VIII, Chapter 4, of Directive 2009/132/EC, the use of such goods or services shall be subject to VAT under t…
+ **1.** Austria may, in the communes of Jungholz and Mittelberg (Kleines Walsertal), apply a second standard rate which is lower than the corresponding rate applied in the rest of Austria but not less than 15 %.
+ **2.** Greece may apply rates up to 30 % lower than the corresponding rates applied in mainland Greece in the departments of Lesbos, Chios, Samos, the Dodecanese and the Cyclades, and on the islands of Thassos, the Northern Sporades, Samothrace and Skiros.
+ **3.** Portugal may, in the case of transactions carried out in the autonomous regions of the Azores and Madeira and of direct importation into those regions, apply rates lower than those applicable on the mainland.
+ **4.** Portugal may apply one of the two reduced rates provided for in Article 98(1) to the tolls on bridges in the Lisbon area.
+ ### Article 105a
+ **1.** Member States which, in accordance with Union law, on 1 January 2021, were applying reduced rates lower than the minimum laid down in Article 98(1) or were granting exemptions with deductibility of the VAT paid at the preceding stage, to the supply of goods or services listed in points other …
+ Member States which, in accordance with Union law, on 1 January 2021, were applying reduced rates lower than the minimum laid down in Article 98(1) to transactions regarding housing not being part of a social policy, may, in accordance with Article 98(2), continue to apply those reduced rates.
+ Member States shall communicate to the VAT Committee the text of the main provisions of national law and the conditions for the application of the reduced rates and exemptions relating to Article 98(2), second subparagraph, point (b), no later than 7 July 2022.
+ Without prejudice to paragraph 4 of this Article, reduced rates lower than the minimum laid down in Article 98(1), or exemptions with deductibility of the VAT paid at the preceding stage may be applied by other Member States, in accordance with Article 98(2), first subparagraph, to the same supplies…
+ **2.** Member States which, in accordance with Union law, on 1 January 2021, were applying reduced rates lower than 12 %, including reduced rates lower than the minimum laid down in Article 98(1), or were granting exemptions with deductibility of the VAT paid at the preceding stage, to the supply of…
+ **3.** Member States which, in accordance with Union law, on 1 January 2021, were applying reduced rates not lower than 12 % to the supply of goods or services other than those listed in Annex III, may, in accordance with Article 98(1), first subparagraph, continue to apply those reduced rates, with…