EC Extends Germany’s VAT Measure for Emission Allowances Trading to Combat Fraud

• The European Commission adopted a proposed decision to extend Germany’s authorization for a special VAT measure
• The special measure deviates from EU Directive 2006/112/EC and designates taxable persons receiving transfers of emission allowances as liable for VAT under the reverse charge mechanism
• Reasons for the proposal include susceptibility to fraud in the allowance-trading sector and the impossibility to apply certain articles of the directive to transmissions of allowances under the Fuel Emission Allowance Trading Act
• The proposed decision extends Germany’s authorization to Dec. 31, 2026, based on positive results, importance in combatting VAT fraud, limited scope, and proportionality
• Germany must submit a request for further extension by March 31, 2026, along with a report on the measure’s impact on combatting VAT fraud and the number of traders and transactions impacted.

Source: news.bloombergtax.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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