Council Directive (EU) 2022/542 of 5 April 2022 amending Directives 2006/112/EC and (EU) 2020/285 as regards the rates of value added tax (VAT) has been published in the Official Journal of the European Union ( see our previous flash ).
As a reminder, until now, the Member States were authorized to apply up to two reduced rates of VAT , which could not in principle be lower than 5%, to the categories of goods and services of their choice among those listed in Annex III to the VAT Directive 2006/112/EC .
But in addition to these common law rules, the Member States apply, on the basis of derogatory rules :
– their reduced rates in accordance with the 5% threshold for certain goods or services which do not appear on the common list in Annex III;
– and/or rates below the 5% threshold or even an exemption with a right to deduct (also called “rate 0”).
In application of the rules which have just been adopted, most of the derogations and freezing clauses from which the Member States have benefited until now have been abolished.
Source CMS Law
