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The European Commission has issued a press release on 12/4/2021 according to which it has proposed to exempt from Value Added Tax (VAT) goods and services made available by the European Commission, EU bodies and agencies to Member States and citizens during times of crisis.
Once in place, the new measures will allow the Commission and other EU agencies and bodies to import and purchase goods and services VAT-free when those purchases are being distributed during an emergency response in the EU. The recipients might be Member States or third parties, such as national authorities or institutions (for example, a hospital, a national health or disaster response authority). Goods and services covered under the proposed exemption include, for instance:
- diagnostic tests and testing materials, and laboratory equipment
- personal protective equipment (PPE) like gloves, respirators, masks, gowns, disinfection products and equipment
- tents, camp beds, clothing and food
- search and rescue equipment, sandbags, life jackets and inflatable boats
- antimicrobials and antibiotics, chemical threat antidotes, treatments for radiation injury, antitoxins, iodine tablets
- blood products or antibodies
- radiation measuring devices
- development, production and procurement of necessary products, research and innovation activities, strategic stockpiling of products
- pharmaceutical licences, quarantine facilities, clinical trials, disinfection of premises, etc.
The legislative proposal, which will amend the VAT directive, will now be submitted to the European Parliament for its opinion, and to the Council for adoption.
Member States shall adopt and publish, by 30 April 2021 the laws regulations and administrative provisions necessary to comply with this Directive. They shall apply those measures from 1 January 2021.
Authors
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Kyriakos Fili Kyriakos is the VAT Partner of Grant Thornton in Cyprus. He is a member of the Institute of Chartered Accountants in England and Wales (ICAEW) and the Institute of Certified Public Accountants of Cyprus (ICPAC).View Profile