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

TABLE OF CONTENTS	TABLE OF CONTENTS
TITLE 1 —	SUBJECT MATTER AND SCOPE
TITLE II —	TERRITORIAL SCOPE
TITLE III —	TAXABLE PERSONS
TITLE IV —	TAXABLE TRANSACTIONS
Chapter 1 —	Supply of goods
Chapter 2 —	Intra-Community acquisition of goods
Chapter 3 —	Supply of services
Chapter 4 —	Importation of goods
Chapter 5 —	Provisions common to Chapters 1 and 3
TITLE V —	PLACE OF TAXABLE TRANSACTIONS
Chapter 1 —	Place of supply of goods
Section 1 —	Supply of goods without transport
Section 2 —	Supply of goods with transport
Section 3 —	Supply of goods on board ships, aircraft or trains
Section 4 —	Supply of goods through distribution systems
Chapter 2 —	Place of an intra-Community acquisition of goods
Chapter 3 —	Place of supply of services
Section 1 —	Definitions
Section 2 —	General rules
Section 3 —	Particular provisions
Subsection 1 —	Supply of services by intermediaries
Subsection 2 —	Supply of services connected with immovable property
Subsection 3 —	Supply of transport
Subsection 4 —	Supply of cultural, artistic, sporting, scientific, educational, entertainment and similar services, ancillary transport services and valuations of and work on movable property
Subsection 5 —	Supply of restaurant and catering services
Subsection 6 —	Hiring of means of transport
Subsection 7 —	Supply of restaurant and catering services for consumption on board ships, aircraft or trains
Subsection 8 —	Supply of telecommunications, broadcasting and electronic services to non-taxable persons
Subsection 9 —	Supply of services to non-taxable persons outside the Community
Subsection 10 —	Prevention of double taxation or non-taxation
Chapter 3a—	Threshold for taxable persons making supplies of goods covered by point (a) of Article 33 and supplies of services covered by Article 58
Chapter 4 —	Place of importation of goods
TITLE VI —	CHARGEABLE EVENT AND CHARGEABILITY OF VAT
Chapter 1 —	General provisions
Chapter 2 —	Supply of goods or services
Chapter 3 —	Intra-Community acquisition of goods
Chapter 4 —	Importation of goods
TITLE VII —	TAXABLE AMOUNT
Chapter 1 —	Definition
Chapter 2 —	Supply of goods or services
Chapter 3 —	Intra-Community acquisition of goods
Chapter 4 —	Importation of goods
Chapter 5 —	Miscellaneous provisions
TITLE VIII —	RATES
Chapter 1 —	Application of rates
Chapter 2 —	Structure and level of rates
Section 1 —	Standard rate
Section 2 —	Reduced rates
Section 2a —	Exceptional situations
Section 3 —	Particular provisions
Chapter 5 —	Temporary provisions
TITLE IX —	EXEMPTIONS
Chapter 1 —	General provisions
Chapter 2 —	Exemptions for certain activities in the public interest
Chapter 3 —	Exemptions for other activities
Chapter 4 —	Exemptions for intra-Community transactions
Section 1 —	Exemptions related to the supply of goods
Section 2 —	Exemptions for intra-Community acquisitions of goods
Section 3 —	Exemptions for certain transport services
Chapter 5 —	Exemptions on importation
Chapter 6 —	Exemptions on exportation
Chapter 7 —	Exemptions related to international transport
Chapter 8 —	Exemptions relating to certain transactions treated as exports
Chapter 9 —	Exemptions for the supply of services by intermediaries
Chapter 10 —	Exemptions for transactions relating to international trade
Section 1 —	Customs warehouses, warehouses other than customs warehouses and similar arrangements
Section 2 —	Transactions exempted with a view to export and in the framework of trade between the Member States
Section 3 —	Provisions common to Sections 1 and 2
TITLE X —	DEDUCTIONS
Chapter 1 —	Origin and scope of right of deduction
Chapter 2 —	Proportional deduction
Chapter 3 —	Restrictions on the right of deduction
Chapter 4 —	Rules governing exercise of the right of deduction
Chapter 5 —	Adjustment of deductions
TITLE XI —	OBLIGATIONS OF TAXABLE PERSONS AND CERTAIN NON-TAXABLE PERSONS
Chapter 1 —	Obligation to pay
Section 1 —	Persons liable for payment of VAT to the tax authorities
Section 2 —	Payment arrangements
Chapter 2 —	Identification
Chapter 3 —	Invoicing
Section 1 —	Definition
Section 2 —	Concept of invoice
Section 3 —	Issue of invoices
Section 4 —	Content of invoices
Section 5 —	Sending invoices by electronic means
Section 6 —	Simplification measures
Chapter 4 —	Accounting
Section 1 —	Definition
Section 2 —	General obligations
Section 2a —	General obligations of payment service providers
Section 3 —	Specific obligations relating to the storage of all invoices
Section 4 —	Right of access to invoices stored by electronic means in another Member State
Chapter 5 —	Returns
Chapter 6 —	Recapitulative statements
Chapter 7 —	Miscellaneous provisions
Chapter 8 —	Obligations relating to certain importations and exportations
Section 1 —	Importation
Section 2 —	Exportation
TITLE XII —	SPECIAL SCHEMES
Chapter 1 —	Special scheme for small enterprises
Section — 1	Definitions
Section 1 —	Simplified procedures for charging and collection
Section 2 —	Exemptions
Section 2a —	Simplification of obligations for exempt small enterprises
Chapter 2 —	Common flat-rate scheme for farmers
Chapter 3 —	Special scheme for travel agents
Chapter 4 —	Special arrangements for second-hand goods, works of art, collectors' items and antiques
Section 1 —	Definitions
Section 2 —	Special arrangements for taxable dealers
Subsection 1 —	Margin scheme
Subsection 2 —	Transitional arrangements for second-hand means of transport
Section 3 —	Special arrangements for sales by public auction
Section 4 —	Measures to prevent distortion of competition and tax evasion
Chapter 5 —	Special scheme for investment gold
Section 1 —	General provisions
Section 2 —	Exemption from VAT
Section 3 —	Taxation option
Section 4 —	Transactions on a regulated gold bullion market
Section 5 —	Special rights and obligations for traders in investment gold
Chapter 6 —	Special schemes for non-established taxable persons supplying telecommunications services, broadcasting services or electronic services to non-taxable persons
Section 1 —	General provisions
Section 2 —	Special scheme for telecommunications, broadcasting or electronic services supplied by taxable persons not established within the Community
Section 3 —	Special scheme for intra-Community distance sales of goods, for supplies of goods within a Member State made by electronic interfaces facilitating those supplies and for services supplied by taxable persons established within the Community but not in the Member State of consumption
Section 4—	Special scheme for distance sales of goods imported from third territories or third countries
Chapter 7	Special arrangements for declaration and payment of import VAT
Chapter 8	Exchange values
TITLE XIII —	DEROGATIONS
Chapter 1 —	Derogations applying until the adoption of definitive arrangements
Section 1 —	Derogations for States which were members of the Community on 1 January 1978
Section 2 —	Derogations for States which acceded to the Community after 1 January 1978
Section 3 —	Provisions common to Sections 1 and 2
Chapter 2 —	Derogations subject to authorisation
Section 1 —	Simplification measures and measures to prevent tax evasion or avoidance
Section 2 —	International agreements
TITLE XIV —	MISCELLANEOUS
Chapter 1 —	Implementing measures
Chapter 2 —	VAT Committee
Chapter 3 —	Conversion rates
Chapter 4 —	Other taxes, duties and charges
TITLE XV —	FINAL PROVISIONS
Chapter 1 —	Transitional arrangements for the taxation of trade between Member States
Chapter 2 —	Transitional measures applicable in the context of accession to the European Union
Chapter 2a —	Transitional measures for the application of new legislation
Chapter 3 —	Transposition and entry into force
ANNEX I —	LIST OF THE ACTIVITIES REFERRED TO IN THE THIRD SUBPARAGRAPH OF ARTICLE 13(1)
ANNEX II —	INDICATIVE LIST OF THE ELECTRONICALLY SUPPLIED SERVICES REFERRED TO IN POINT (C) OF THE FIRST PARAGRAPH OF ARTICLE 58
ANNEX III —	LIST OF SUPPLIES OF GOODS AND SERVICES TO WHICH THE REDUCED RATES AND THE EXEMPTION WITH DEDUCTIBILITY OF VAT REFERRED TO IN ARTICLE 98 MAY BE APPLIED
ANNEX IV —	LIST OF THE SERVICES REFERRED TO IN ARTICLE 106
ANNEX V —	CATEGORIES OF GOODS COVERED BY WAREHOUSING ARRANGEMENTS OTHER THAN CUSTOMS WAREHOUSING AS PROVIDED FOR UNDER ARTICLE 160(2)
ANNEX VI —	LIST OF SUPPLIES OF GOODS AND SERVICES AS REFERRED TO IN POINT (D) OF ARTICLE 199(1)
ANNEX VII —	LIST OF THE AGRICULTURAL PRODUCTION ACTIVITIES REFERRED TO IN POINT (4) OF ARTICLE 295(1)
ANNEX VIII —	INDICATIVE LIST OF THE AGRICULTURAL SERVICES REFERRED TO IN POINT (5) OF ARTICLE 295(1)
ANNEX IX —	WORKS OF ART, COLLECTORS' ITEMS AND ANTIQUES, AS REFERRED TO IN POINTS (2), (3) AND (4) OF ARTICLE 311(1)
Part A —	Works of art
Part B —	Collectors' items
Part C —	Antiques
ANNEX X —	LIST OF TRANSACTIONS COVERED BY THE DEROGATIONS REFERRED TO IN ARTICLES 370 AND 371 AND ARTICLES 375 TO 390c
Part A —	Transactions which Member States may continue to tax
Part B —	Transactions which Member States may continue to exempt
ANNEX XI
Part A —	Repealed Directives with their successive amendments
Part B —	Time limits for transposition into national law (referred to in Article 411)
ANNEX XII —	CORRELATION TABLE

TITLE I SUBJECT MATTER AND SCOPE

Article 1

On each transaction, VAT, calculated on the price of the goods or services at the rate applicable to such goods or services, shall be chargeable after deduction of the amount of VAT borne directly by the various cost components.

The common system of VAT shall be applied up to and including the retail trade stage.

Article 2

• (a) the supply of goods for consideration within the territory of a Member State by a taxable person acting as such;

• (b) the intra-Community acquisition of goods for consideration within the territory of a Member State by:
• (i) a taxable person acting as such, or a non‐taxable legal person, where the vendor is a taxable person acting as such who is not eligible for the exemption for small enterprises provided for in Article 284 and who is not covered by Article 33 or 36;
• (ii) in the case of new means of transport, a taxable person, or a non-taxable legal person, whose other acquisitions are not subject to VAT pursuant to Article 3(1), or any other non-taxable person;
• (iii) in the case of products subject to excise duty, where the excise duty on the intra-Community acquisition is chargeable, pursuant to Directive 92/12/EEC, within the territory of the Member State, a taxable person, or a non-taxable legal person, whose other acquisitions are not subject to VAT pursuant to Article 3(1);

• (c) the supply of services for consideration within the territory of a Member State by a taxable person acting as such;

• (d) the importation of goods.

2.

• (a) For the purposes of point (ii) of paragraph 1(b), the following shall be regarded as ‘means of transport’, where they are intended for the transport of persons or goods:
• (i) motorised land vehicles the capacity of which exceeds 48 cubic centimetres or the power of which exceeds 7,2 kilowatts;
• (ii) vessels exceeding 7,5 metres in length, with the exception of vessels used for navigation on the high seas and carrying passengers for reward, and of vessels used for the purposes of commercial, industrial or fishing activities, or for rescue or assistance at sea, or for inshore fishing;
• (iii) aircraft the take-off weight of which exceeds 1 550 kilograms, with the exception of aircraft used by airlines operating for reward chiefly on international routes.

• (b) These means of transport shall be regarded as ‘new’ in the cases:
• (i) of motorised land vehicles, where the supply takes place within six months of the date of first entry into service or where the vehicle has travelled for no more than 6 000 kilometres;
• (ii) of vessels, where the supply takes place within three months of the date of first entry into service or where the vessel has sailed for no more than 100 hours;
• (iii) of aircraft, where the supply takes place within three months of the date of first entry into service or where the aircraft has flown for no more than 40 hours.

• (c) Member States shall lay down the conditions under which the facts referred to in point (b) may be regarded as established.

Article 3

• (a) the intra-Community acquisition of goods by a taxable person or a non-taxable legal person, where the supply of such goods within the territory of the Member State of acquisition would be exempt pursuant to Articles 148 and 151;

• (b) the intra-Community acquisition of goods, other than those referred to in point (a) and Article 4, and other than new means of transport or products subject to excise duty, by a taxable person for the purposes of his agricultural, forestry or fisheries business subject to the common flat-rate scheme for farmers, or by a taxable person who carries out only supplies of goods or services in respect of which VAT is not deductible, or by a non-taxable legal person.

• (a) during the current calendar year, the total value of intra-Community acquisitions of goods does not exceed a threshold which the Member States shall determine but which may not be less than EUR 10 000 or the equivalent in national currency;

• (b) during the previous calendar year, the total value of intra-Community acquisitions of goods did not exceed the threshold provided for in point (a).

The threshold which serves as the reference shall consist of the total value, exclusive of VAT due or paid in the Member State in which dispatch or transport of the goods began, of the intra-Community acquisitions of goods as referred to under point (b) of paragraph 1.

Member States shall lay down the detailed rules for the exercise of the option referred to in the first subparagraph, which shall in any event cover a period of two calendar years.

Article 4

In addition to the transactions referred to in Article 3, the following transactions shall not be subject to VAT:

• (a) the intra-Community acquisition of second-hand goods, works of art, collectors' items or antiques, as defined in points (1) to (4) of Article 311(1), where the vendor is a taxable dealer acting as such and VAT has been applied to the goods in the Member State in which their dispatch or transport began, in accordance with the margin scheme provided for in Articles 312 to 325;

• (b) the intra-Community acquisition of second-hand means of transport, as defined in Article 327(3), where the vendor is a taxable dealer acting as such and VAT has been applied to the means of transport in the Member State in which their dispatch or transport began, in accordance with the transitional arrangements for second-hand means of transport;

• (c) the intra-Community acquisition of second-hand goods, works of art, collectors' items or antiques, as defined in points (1) to (4) of Article 311(1), where the vendor is an organiser of sales by public auction, acting as such, and VAT has been applied to the goods in the Member State in which their dispatch or transport began, in accordance with the special arrangements for sales by public auction.

TITLE II TERRITORIAL SCOPE

Article 5

For the purposes of applying this Directive, the following definitions shall apply:

• (1) ‘Community’ and ‘territory of the Community’ mean the territories of the Member States as defined in point (2);

• (2) ‘Member State’ and ‘territory of a Member State’ mean the territory of each Member State of the Community to which the Treaty establishing the European Community is applicable, in accordance with Article 299 of that Treaty, with the exception of any territory referred to in Article 6 of this Directive;

• (3) ‘third territories’ means those territories referred to in Article 6;

• (4) ‘third country’ means any State or territory to which the Treaty is not applicable.

Article 6

• (a) Mount Athos;

• (b) the Canary Islands;

• (c) the French territories referred to in Article 349 and Article 355(1) of the Treaty on the Functioning of the European Union;

• (d) the Åland Islands;

• (e) the Channel Islands;

• (f) Campione d'Italia;

• (g) the Italian waters of Lake Lugano.

• (a) the Island of Heligoland;

• (b) the territory of Büsingen;

• (c) Ceuta;

• (d) Melilla;

• (e) Livigno.

Article 7

Article 8

If the Commission considers that the provisions laid down in Articles 6 and 7 are no longer justified, particularly in terms of fair competition or own resources, it shall present appropriate proposals to the Council.

TITLE III TAXABLE PERSONS

Article 9

Any activity of producers, traders or persons supplying services, including mining and agricultural activities and activities of the professions, shall be regarded as ‘economic activity’. The exploitation of tangible or intangible property for the purposes of obtaining income therefrom on a continuing basis shall in particular be regarded as an economic activity.

Article 10

The condition in Article 9(1) that the economic activity be conducted ‘independently’ shall exclude employed and other persons from VAT in so far as they are bound to an employer by a contract of employment or by any other legal ties creating the relationship of employer and employee as regards working conditions, remuneration and the employer's liability.

Article 11

After consulting the advisory committee on value added tax (hereafter, the ‘VAT Committee’), each Member State may regard as a single taxable person any persons established in the territory of that Member State who, while legally independent, are closely bound to one another by financial, economic and organisational links.

A Member State exercising the option provided for in the first paragraph, may adopt any measures needed to prevent tax evasion or avoidance through the use of this provision.

Article 12

• (a) the supply, before first occupation, of a building or parts of a building and of the land on which the building stands;

• (b) the supply of building land.

Member States may lay down the detailed rules for applying the criterion referred to in paragraph 1(a) to conversions of buildings and may determine what is meant by ‘the land on which a building stands’.

Member States may apply criteria other than that of first occupation, such as the period elapsing between the date of completion of the building and the date of first supply, or the period elapsing between the date of first occupation and the date of subsequent supply, provided that those periods do not exceed five years and two years respectively.

Article 13

However, when they engage in such activities or transactions, they shall be regarded as taxable persons in respect of those activities or transactions where their treatment as non-taxable persons would lead to significant distortions of competition.

In any event, bodies governed by public law shall be regarded as taxable persons in respect of the activities listed in Annex I, provided that those activities are not carried out on such a small scale as to be negligible.

TITLE IV TAXABLE TRANSACTIONS

CHAPTER 1 supply of goods

Article 14

• (a) the transfer, by order made by or in the name of a public authority or in pursuance of the law, of the ownership of property against payment of compensation;

• (b) the actual handing over of goods pursuant to a contract for the hire of goods for a certain period, or for the sale of goods on deferred terms, which provides that in the normal course of events ownership is to pass at the latest upon payment of the final instalment;

• (c) the transfer of goods pursuant to a contract under which commission is payable on purchase or sale.

• (1) ‘intra-Community distance sales of goods’ means supplies of goods dispatched or transported by or on behalf of the supplier, including where the supplier intervenes indirectly in the transport or dispatch of the goods, from a Member State other than that in which dispatch or transport of the goods to the customer ends, where the following conditions are met:
• (a) the supply of goods is carried out for a taxable person, or a non-taxable legal person, whose intra-Community acquisitions of goods are not subject to VAT pursuant to Article 3(1) or for any other non-taxable person;
• (b) the goods supplied are neither new means of transport nor goods supplied after assembly or installation, with or without a trial run, by or on behalf of the supplier;

• (2) ‘distance sales of goods imported from third territories or third countries’ means supplies of goods dispatched or transported by or on behalf of the supplier, including where the supplier intervenes indirectly in the transport or dispatch of the goods, from a third territory or third country, to a customer in a Member State, where the following conditions are met:
• (a) the supply of goods is carried out for a taxable person, or a non-taxable legal person, whose intra-Community acquisitions of goods are not subject to VAT pursuant to Article 3(1) or for any other non-taxable person;
• (b) the goods supplied are neither new means of transport nor goods supplied after assembly or installation, with or without a trial run, by or on behalf of the supplier.

Article 14a

Article 15

• (a) certain interests in immovable property;

• (b) rights in rem giving the holder thereof a right of use over immovable property;

• (c) shares or interests equivalent to shares giving the holder thereof de jure or de facto rights of ownership or possession over immovable property or part thereof.

Article 16

The application by a taxable person of goods forming part of his business assets for his private use or for that of his staff, or their disposal free of charge or, more generally, their application for purposes other than those of his business, shall be treated as a supply of goods for consideration, where the VAT on those goods or the component parts thereof was wholly or partly deductible.

However, the application of goods for business use as samples or as gifts of small value shall not be treated as a supply of goods for consideration.

Article 17

‘Transfer to another Member State’ shall mean the dispatch or transport of movable tangible property by or on behalf of the taxable person, for the purposes of his business, to a destination outside the territory of the Member State in which the property is located, but within the Community.

• (a) the supply of the goods by the taxable person within the territory of the Member State in which the dispatch or transport ends, in accordance with the conditions laid down in Article 33;

• (b) the supply of the goods, for installation or assembly by or on behalf of the supplier, by the taxable person within the territory of the Member State in which dispatch or transport of the goods ends, in accordance with the conditions laid down in Article 36;

• (c) the supply of the goods by the taxable person on board a ship, an aircraft or a train in the course of a passenger transport operation, in accordance with the conditions laid down in Article 37;

• (d) the supply of gas through a natural gas system situated within the territory of the Community or any network connected to such a system, the supply of electricity or the supply of heat or cooling energy through heating or cooling networks, in accordance with the conditions laid down in Articles 38 and 39;

• (e) the supply of the goods by the taxable person within the territory of the Member State, in accordance with the conditions laid down in Articles 138, 146, 147, 148, 151 or 152;

• (f) the supply of a service performed for the taxable person and consisting in valuations of, or work on, the goods in question physically carried out within the territory of the Member State in which dispatch or transport of the goods ends, provided that the goods, after being valued or worked upon, are returned to that taxable person in the Member State from which they were initially dispatched or transported;

• (g) the temporary use of the goods within the territory of the Member State in which dispatch or transport of the goods ends, for the purposes of the supply of services by the taxable person established within the Member State in which dispatch or transport of the goods began;

• (h) the temporary use of the goods, for a period not exceeding twenty-four months, within the territory of another Member State, in which the importation of the same goods from a third country with a view to their temporary use would be covered by the arrangements for temporary importation with full exemption from import duties.

Article 17a

• (a) goods are dispatched or transported by a taxable person, or by a third party on his behalf, to another Member State with a view to those goods being supplied there, at a later stage and after arrival, to another taxable person who is entitled to take ownership of those goods in accordance with an existing agreement between both taxable persons;

• (b) the taxable person dispatching or transporting the goods has not established his business nor has a fixed establishment in the Member State to which the goods are dispatched or transported;

• (c) the taxable person to whom the goods are intended to be supplied is identified for VAT purposes in the Member State to which the goods are dispatched or transported and both his identity and the VAT identification number assigned to him by that Member State are known to the taxable person referred to in point (b) at the time when the dispatch or transport begins;

• (d) the taxable person dispatching or transporting the goods records the transfer of the goods in the register provided for in Article 243(3) and includes the identity of the taxable person acquiring the goods and the VAT identification number assigned to him by the Member State to which the goods are dispatched or transported in the recapitulative statement provided for in Article 262(2).

• (a) a supply of goods in accordance with Article 138(1) shall be deemed to be made by the taxable person that dispatched or transported the goods either by himself or by a third party on his behalf in the Member State from which the goods were dispatched or transported;

• (b) an intra-Community acquisition of goods shall be deemed to be made by the taxable person to whom those goods are supplied in the Member State to which the goods were dispatched or transported.

• (a) the right to dispose of the goods has not been transferred, and those goods are returned to the Member State from which they were dispatched or transported within the time limit referred to in paragraph 4; and

• (b) the taxable person who dispatched or transported the goods records their return in the register provided for in Article 243(3).

• (a) all other applicable conditions in paragraph 2 are met; and

• (b) the substitution is recorded by the taxable person referred to in point (b) of paragraph 2 in the register provided for in Article 243(3).

If the goods are supplied to a person other than the taxable person referred to in point (c) of paragraph 2 or in paragraph 6, it shall be deemed that the conditions set out in paragraphs 2 and 6 cease to be fulfilled immediately before such supply.

If the goods are dispatched or transported to a country other than the Member State from which they were initially moved, it shall be deemed that the conditions set out in paragraphs 2 and 6 cease to be fulfilled immediately before such dispatch or transport starts.

In the event of the destruction, loss or theft of the goods, it shall be deemed that the conditions set out in paragraphs 2 and 6 cease to be fulfilled on the date that the goods were actually removed or destroyed, or, if it is impossible to determine that date, the date on which the goods were found to be destroyed or missing.

Article 18

Member States may treat each of the following transactions as a supply of goods for consideration:

• (a) the application by a taxable person for the purposes of his business of goods produced, constructed, extracted, processed, purchased or imported in the course of such business, where the VAT on such goods, had they been acquired from another taxable person, would not be wholly deductible;

• (b) the application of goods by a taxable person for the purposes of a non-taxable area of activity, where the VAT on such goods became wholly or partly deductible upon their acquisition or upon their application in accordance with point (a);

• (c) with the exception of the cases referred to in Article 19, the retention of goods by a taxable person, or by his successors, when he ceases to carry out a taxable economic activity, where the VAT on such goods became wholly or partly deductible upon their acquisition or upon their application in accordance with point (a).

Article 19

In the event of a transfer, whether for consideration or not or as a contribution to a company, of a totality of assets or part thereof, Member States may consider that no supply of goods has taken place and that the person to whom the goods are transferred is to be treated as the successor to the transferor.

Member States may, in cases where the recipient is not wholly liable to tax, take the measures necessary to prevent distortion of competition. They may also adopt any measures needed to prevent tax evasion or avoidance through the use of this Article.

CHAPTER 2 Intra-Community acquisition of goods

Article 20

‘Intra-Community acquisition of goods’ shall mean the acquisition of the right to dispose as owner of movable tangible property dispatched or transported to the person acquiring the goods, by or on behalf of the vendor or the person acquiring the goods, in a Member State other than that in which dispatch or transport of the goods began.

Where goods acquired by a non-taxable legal person are dispatched or transported from a third territory or a third country and imported by that non-taxable legal person into a Member State other than the Member State in which dispatch or transport of the goods ends, the goods shall be regarded as having been dispatched or transported from the Member State of importation. That Member State shall grant the importer designated or recognised under Article 201 as liable for payment of VAT a refund of the VAT paid in respect of the importation of the goods, provided that the importer establishes that VAT has been applied to his acquisition in the Member State in which dispatch or transport of the goods ends.

Article 21

The application by a taxable person, for the purposes of his business, of goods dispatched or transported by or on behalf of that taxable person from another Member State, within which the goods were produced, extracted, processed, purchased or acquired within the meaning of Article 2(1)(b), or into which they were imported by that taxable person for the purposes of his business, shall be treated as an intra-Community acquisition of goods for consideration.

Article 22

The application by the armed forces of a Member State taking part in a defence effort carried out for the implementation of a Union activity under the common security and defence policy, for their use or for the use of the civilian staff accompanying them, of goods which they have not purchased subject to the general rules governing taxation on the domestic market of a Member State shall be treated as an intra-Community acquisition of goods for consideration, where the importation of those goods would not be eligible for the exemption provided for in point (ga) of Article 143(1).

The application by the armed forces of a State party to the North Atlantic Treaty, for their use or for the use of the civilian staff accompanying them, of goods which they have not purchased subject to the general rules governing taxation on the domestic market of a Member State shall be treated as an intra-Community acquisition of goods for consideration, where the importation of those goods would not be eligible for the exemption provided for in Article 143(1)(h).

Article 23

Member States shall take the measures necessary to ensure that a transaction which would have been classed as a supply of goods if it had been carried out within their territory by a taxable person acting as such is classed as an intra-Community acquisition of goods.

CHAPTER 3 Supply of services

Article 24

Article 25

A supply of services may consist, inter alia, in one of the following transactions:

• (a) the assignment of intangible property, whether or not the subject of a document establishing title;

• (b) the obligation to refrain from an act, or to tolerate an act or situation;

• (c) the performance of services in pursuance of an order made by or in the name of a public authority or in pursuance of the law.

Article 26

• (a) the use of goods forming part of the assets of a business for the private use of a taxable person or of his staff or, more generally, for purposes other than those of his business, where the VAT on such goods was wholly or partly deductible;

• (b) the supply of services carried out free of charge by a taxable person for his private use or for that of his staff or, more generally, for purposes other than those of his business.

Article 27

In order to prevent distortion of competition and after consulting the VAT Committee, Member States may treat as a supply of services for consideration the supply by a taxable person of a service for the purposes of his business, where the VAT on such a service, were it supplied by another taxable person, would not be wholly deductible.

Article 28

Where a taxable person acting in his own name but on behalf of another person takes part in a supply of services, he shall be deemed to have received and supplied those services himself.

Article 29

Article 19 shall apply in like manner to the supply of services.

CHAPTER 4 Importation of goods

Article 30

‘Importation of goods’ shall mean the entry into the Community of goods which are not in free circulation within the meaning of Article 24 of the Treaty.

In addition to the transaction referred to in the first paragraph, the entry into the Community of goods which are in free circulation, coming from a third territory forming part of the customs territory of the Community, shall be regarded as importation of goods.

CHAPTER 5 Provisions common to Chapters 1 and 3

Article 30a

For the purposes of this Directive, the following definitions shall apply:

• (1) ‘voucher’ means an instrument where there is an obligation to accept it as consideration or part consideration for a supply of goods or services and where the goods or services to be supplied or the identities of their potential suppliers are either indicated on the instrument itself or in related documentation, including the terms and conditions of use of such instrument;

• (2) ‘single-purpose voucher’ means a voucher where the place of supply of the goods or services to which the voucher relates, and the VAT due on those goods or services, are known at the time of issue of the voucher;

• (3) ‘multi-purpose voucher’ means a voucher, other than a single-purpose voucher.

Article 30b

Where a transfer of a single-purpose voucher is made by a taxable person acting in the name of another taxable person, that transfer shall be regarded as a supply of the goods or services to which the voucher relates made by the other taxable person in whose name the taxable person is acting.

Where the supplier of goods or services is not the taxable person who, acting in his own name, issued the single-purpose voucher, that supplier shall however be deemed to have made the supply of the goods or services related to that voucher to that taxable person.

Where a transfer of a multi-purpose voucher is made by a taxable person other than the taxable person carrying out the transaction subject to VAT pursuant to the first subparagraph, any supply of services that can be identified, such as distribution or promotion services, shall be subject to VAT.

TITLE V PLACE OF TAXABLE TRANSACTIONS

CHAPTER 1 Place of supply of goods

Section 1 Supply of goods without transport

Article 31

Where goods are not dispatched or transported, the place of supply shall be deemed to be the place where the goods are located at the time when the supply takes place.

Section 2 Supply of goods with transport

Article 32

Where goods are dispatched or transported by the supplier, or by the customer, or by a third person, the place of supply shall be deemed to be the place where the goods are located at the time when dispatch or transport of the goods to the customer begins.

However, if dispatch or transport of the goods begins in a third territory or third country, both the place of supply by the importer designated or recognised under Article 201 as liable for payment of VAT and the place of any subsequent supply shall be deemed to be within the Member State of importation of the goods.

Article 33

By way of derogation from Article 32:

• (a) the place of supply of intra-Community distance sales of goods shall be deemed to be the place where the goods are located at the time when dispatch or transport of the goods to the customer ends;

• (b) the place of supply of distance sales of goods imported from third territories or third countries into a Member State other than that in which dispatch or transport of the goods to the customer ends, shall be deemed to be the place where the goods are located at the time when dispatch or transport of the goods to the customer ends;

• (c) the place of supply of distance sales of goods imported from third territories or third countries into the Member State in which dispatch or transport of the goods to the customer ends shall be deemed to be in that Member State, provided that VAT on those goods is to be declared under the special scheme of Section 4 of Chapter 6 of Title XII.

Article 35

Article 33 shall not apply to supplies of second-hand goods, works of art, collectors' items or antiques, as defined in points (1) to (4) of Article 311(1), nor to supplies of second-hand means of transport, as defined in Article 327(3), subject to VAT in accordance with the relevant special arrangements.

Article 36

Where goods dispatched or transported by the supplier, by the customer or by a third person are installed or assembled, with or without a trial run, by or on behalf of the supplier, the place of supply shall be deemed to be the place where the goods are installed or assembled.

Where the installation or assembly is carried out in a Member State other than that of the supplier, the Member State within the territory of which the installation or assembly is carried out shall take the measures necessary to ensure that there is no double taxation in that Member State.

Article 36a

Article 36b

Where a taxable person is deemed to have received and supplied goods in accordance with Article 14a, the dispatch or transport of the goods shall be ascribed to the supply made by that taxable person.

Section 3 Supply of goods on board ships, aircraft or trains

Article 37

‘Point of departure of a passenger transport operation’ shall mean the first scheduled point of passenger embarkation within the Community, where applicable after a stopover outside the Community.

‘Point of arrival of a passenger transport operation’ shall mean the last scheduled point of disembarkation within the Community of passengers who embarked in the Community, where applicable before a stopover outside the Community.

In the case of a return trip, the return leg shall be regarded as a separate transport operation.

Pending adoption of the proposals referred to in the first subparagraph, Member States may exempt or continue to exempt, with deductibility of the VAT paid at the preceding stage, the supply of goods for consumption on board in respect of which the place of taxation is determined in accordance with paragraph 1.

Section 4 Supplies of gas through a natural gas system, of electricity and of heat or cooling energy through heating and cooling networks

Article 38

Article 39

In the case of the supply of gas through a natural gas system situated within the territory of the Community or any network connected to such a system, the supply of electricity or the supply of heat or cooling energy through heating or cooling networks, where such a supply is not covered by Article 38, the place of supply shall be deemed to be the place where the customer effectively uses and consumes the goods.

Where all or part of the gas, electricity or heat or cooling energy is not effectively consumed by the customer, those non-consumed goods shall be deemed to have been used and consumed at the place where the customer has established his business or has a fixed establishment for which the goods are supplied. In the absence of such a place of business or fixed establishment, the customer shall be deemed to have used and consumed the goods at the place where he has his permanent address or usually resides.

CHAPTER 2 Place of an intra-Community acquisition of goods

Article 40

The place of an intra-Community acquisition of goods shall be deemed to be the place where dispatch or transport of the goods to the person acquiring them ends.

Article 41

Without prejudice to Article 40, the place of an intra-Community acquisition of goods as referred to in Article 2(1)(b)(i) shall be deemed to be within the territory of the Member State which issued the VAT identification number under which the person acquiring the goods made the acquisition, unless the person acquiring the goods establishes that VAT has been applied to that acquisition in accordance with Article 40.

If VAT is applied to the acquisition in accordance with the first paragraph and subsequently applied, pursuant to Article 40, to the acquisition in the Member State in which dispatch or transport of the goods ends, the taxable amount shall be reduced accordingly in the Member State which issued the VAT identification number under which the person acquiring the goods made the acquisition.

Article 42

The first paragraph of Article 41 shall not apply and VAT shall be deemed to have been applied to the intra-Community acquisition of goods in accordance with Article 40 where the following conditions are met:

• (a) the person acquiring the goods establishes that he has made the intra-Community acquisition for the purposes of a subsequent supply, within the territory of the Member State identified in accordance with Article 40, for which the person to whom the supply is made has been designated in accordance with Article 197 as liable for payment of VAT;

• (b) the person acquiring the goods has satisfied the obligations laid down in Article 265 relating to submission of the recapitulative statement.

CHAPTER 3 Place of supply of services

Section 1 Definitions

Article 43

For the purpose of applying the rules concerning the place of supply of services:

• 1. a taxable person who also carries out activities or transactions that are not considered to be taxable supplies of goods or services in accordance with Article 2(1) shall be regarded as a taxable person in respect of all services rendered to him;

• 1. a non-taxable legal person who is identified for VAT purposes shall be regarded as a taxable person.

Section 2 General rules

Article 44

The place of supply of services to a taxable person acting as such shall be the place where that person has established his business. However, if those services are provided to a fixed establishment of the taxable person located in a place other than the place where he has established his business, the place of supply of those services shall be the place where that fixed establishment is located. In the absence of such place of establishment or fixed establishment, the place of supply of services shall be the place where the taxable person who receives such services has his permanent address or usually resides.

Article 45

The place of supply of services to a non-taxable person shall be the place where the supplier has established his business. However, if those services are provided from a fixed establishment of the supplier located in a place other than the place where he has established his business, the place of supply of those services shall be the place where that fixed establishment is located. In the absence of such place of establishment or fixed establishment, the place of supply of services shall be the place where the supplier has his permanent address or usually resides.

Section 3 Particular provisions

Subsection 1 Supply of services by intermediaries

Article 46

The place of supply of services rendered to a non-taxable person by an intermediary acting in the name and on behalf of another person shall be the place where the underlying transaction is supplied in accordance with this Directive.

Subsection 2 Supply of services connected with immovable property

Article 47

The place of supply of services connected with immovable property, including the services of experts and estate agents, the provision of accommodation in the hotel sector or in sectors with a similar function, such as holiday camps or sites developed for use as camping sites, the granting of rights to use immovable property and services for the preparation and coordination of construction work, such as the services of architects and of firms providing on-site supervision, shall be the place where the immovable property is located.

Subsection 3 Supply of transport

Article 48

The place of supply of passenger transport shall be the place where the transport takes place, proportionate to the distances covered.

Article 49

The place of supply of the transport of goods, other than the intra-Community transport of goods, to non-taxable persons shall be the place where the transport takes place, proportionate to the distances covered.

Article 50

The place of supply of the intra-Community transport of goods to non-taxable persons shall be the place of departure.

Article 51

‘Intra-Community transport of goods’ shall mean any transport of goods in respect of which the place of departure and the place of arrival are situated within the territories of two different Member States.

‘Place of departure’ shall mean the place where transport of the goods actually begins, irrespective of distances covered in order to reach the place where the goods are located and ‘place of arrival’ shall mean the place where transport of the goods actually ends.

Article 52

Member States need not apply VAT to that part of the intra-Community transport of goods to non-taxable persons taking place over waters which do not form part of the territory of the Community.

Subsection 4 Supply of cultural, artistic, sporting, scientific, educational, entertainment and similar services, ancillary transport services and valuations of and work on movable property

Article 53

The place of supply of services in respect of admission to cultural, artistic, sporting, scientific, educational, entertainment or similar events, such as fairs and exhibitions, and of ancillary services related to the admission, supplied to a taxable person, shall be the place where those events actually take place.

This Article shall not apply to admission to the events referred to in the first paragraph where the attendance is virtual.

Article 54

Where the services and ancillary services relate to activities which are streamed or otherwise made virtually available, the place of supply shall, however, be the place where the non-taxable person is established, has his permanent address or usually resides.

• (a) ancillary transport activities such as loading, unloading, handling and similar activities;

• (b) valuations of and work on movable tangible property.

Subsection 5 Supply of restaurant and catering services

Article 55

The place of supply of restaurant and catering services other than those physically carried out on board ships, aircraft or trains during the section of a passenger transport operation effected within the Community, shall be the place where the services are physically carried out.

Subsection 6 Hiring of means of transport

Article 56

However, the place of hiring a pleasure boat to a non-taxable person, other than short-term hiring, shall be the place where the pleasure boat is actually put at the disposal of the customer, where this service is actually provided by the supplier from his place of business or a fixed establishment situated in that place.

Subsection 7 Supply of restaurant and catering services for consumption on board ships, aircraft or trains

Article 57

‘Point of departure of a passenger transport operation’ shall mean the first scheduled point of passenger embarkation within the Community, where applicable after a stopover outside the Community.

‘Point of arrival of a passenger transport operation’ shall mean the last scheduled point of disembarkation within the Community of passengers who embarked in the Community, where applicable before a stopover outside the Community.

In the case of a return trip, the return leg shall be regarded as a separate transport operation.

Subsection 8 Supply of telecommunications, broadcasting and electronic services to non-taxable persons

Article 58

• (a) telecommunications services;

• (b) radio and television broadcasting services;

• (c) electronically supplied services, in particular those referred to in Annex II.

Where the supplier of a service and the customer communicate via electronic mail, that shall not of itself mean that the service supplied is an electronically supplied service.

Subsection 9 Supply of services to non-taxable persons outside the Community

Article 59

The place of supply of the following services to a non-taxable person who is established or has his permanent address or usually resides outside the Community, shall be the place where that person is established, has his permanent address or usually resides:

• (a) transfers and assignments of copyrights, patents, licences, trade marks and similar rights;

• (b) advertising services;

• (c) the services of consultants, engineers, consultancy firms, lawyers, accountants and other similar services, as well as data processing and the provision of information;

• (d) obligations to refrain from pursuing or exercising, in whole or in part, a business activity or a right referred to in this Article;

• (e) banking, financial and insurance transactions including reinsurance, with the exception of the hire of safes;

• (f) the supply of staff;

• (g) the hiring out of movable tangible property, with the exception of all means of transport;

• (h) the provision of access to a natural gas system situated within the territory of the Community or to any network connected to such a system, to the electricity system or to heating or cooling networks, or the transmission or distribution through these systems or networks, and the provision of other services directly linked thereto.

Subsection 10 Prevention of double taxation or non-taxation

Article 59a

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:

• (a) consider the place of supply of any or all of those services, if situated within their territory, as being situated outside the Community if the effective use and enjoyment of the services takes place outside the Community;

• (b) consider the place of supply of any or all of those services, if situated outside the Community, as being situated within their territory if the effective use and enjoyment of the services takes place within their territory.

CHAPTER 3a Threshold for taxable persons making supplies of goods covered by point (a) of Article 33 and supplies of services covered by Article 58

Article 59c

• (a) the supplier is established or, in the absence of an establishment, has his permanent address or usually resides only in one Member State;

• (b) services are supplied to non-taxable persons who are established, have their permanent address or usually reside in any Member State other than the Member State referred to in point (a) or goods are dispatched or transported to a Member State other than the Member State referred to in point (a); and

• (c) the total value, exclusive of VAT, of the supplies referred to in point (b) does not in the current calendar year exceed EUR 10 000 , or the equivalent in national currency, nor did it do so in the course of the preceding calendar year.

CHAPTER 4 Place of importation of goods

Article 60

The place of importation of goods shall be the Member State within whose territory the goods are located when they enter the Community.

Article 61

By way of derogation from Article 60, where, on entry into the Community, goods which are not in free circulation are placed under one of the arrangements or situations referred to in Article 156, or under temporary importation arrangements with total exemption from import duty, or under external transit arrangements, the place of importation of such goods shall be the Member State within whose territory the goods cease to be covered by those arrangements or situations.

Similarly, where, on entry into the Community, goods which are in free circulation are placed under one of the arrangements or situations referred to in Articles 276 and 277, the place of importation shall be the Member State within whose territory the goods cease to be covered by those arrangements or situations.

TITLE VI CHARGEABLE EVENT AND CHARGEABILITY OF VAT

CHAPTER 1 General provisions

Article 62

For the purposes of this Directive:

• (1) ‘chargeable event’ shall mean the occurrence by virtue of which the legal conditions necessary for VAT to become chargeable are fulfilled;

• (2) VAT shall become ‘chargeable’ when the tax authority becomes entitled under the law, at a given moment, to claim the tax from the person liable to pay, even though the time of payment may be deferred.

CHAPTER 2 Supply of goods or services

Article 63

The chargeable event shall occur and VAT shall become chargeable when the goods or the services are supplied.

Article 64