Pursuant to Article 395(1) of Directive 2006/112/EC of 28 November 2006 on the common system of value added tax (‘the VAT Directive 1 ’), the Council, acting unanimously on a proposal from the Commission, may authorise any Member State to apply special measures derogating from the provisions of this Directive, in order to simplify the procedure for charging VAT or to prevent certain forms of tax evasion or avoidance.
By letter registered with the Commission on 25 February 2021, Hungary requested an authorisation to continue to apply a measure derogating from point (a) of Article 26(1) and Articles 168 and 168a of the VAT Directive and to restrict the right of deduction of VAT on the leasing of certain passenger cars not wholly used for business purposes. The request was accompanied by a report including a review of the percentage foreseen for the limitation of the right of deduction.
In accordance with Article 395(2) of the VAT Directive, the Commission informed the other Member States by letters dated 7 April 2021 of the request made by Hungary. The Commission notified Hungary by letter dated 8 April 2021 that it had all the information necessary to consider the request.
Source: eur-lex.europa.eu
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