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EU VAT Committee legislative status – comitology

European Commission proposal to give its VAT Committee legal interpretative status – comitology – update

In December 2020, the European Commission provided detailed proposals to give its VAT Committee the right to rule on certain aspects of the EU VAT Directive. This would give it comitology status on sensitive topics by qualified majority voting, particularly where member states are diverging in their interpretation of the Directive. This would enable better and more consistent interpretation of the VAT Directive.

This was part of its EU Tax Action Plan of 2020.

Council prefers to see its continued unanimity powers

Since then, the European Council has made limited progress in progressing and approving the suggestion. Instead, at least initially, it wishes the Commission to continue to put forward amendments or interpretations of existing guidelines to be approved via the existing Article 397 VAT Directive unanimous approval route.

  • Likely first guidelines to be promoted under this initiative include:
  • Holding company and deductibility rules
  • Intra-community supplies; and
  • Place of supplies

VAT Committee – advisory only role

The VAT Committee was set up under VAT Directive to promote the uniform application of the provisions of the VAT Directive. Because it is an advisory committee only and has not been attributed any legislative powers, the VAT Committee cannot take legally binding decisions. It can however give some guidance on the application of the Directive.


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