European Union: Proposed VAT Derogation for Hard Drives

August 28, 2017 Charles Riordan

The European Commission has proposed Poland be authorized to assess a reverse charge on hard drives, such as solid-state drives and hard disk drives, which would impose VAT liability on the purchaser of such items. Article 199(a) of Council Directive 2006/112/EC (“the EU VAT Directive”) currently allows for Member States to impose a reverse charge on similar high-value items such as laptops and microprocessors, as a mechanism to combat VAT fraud. Extending the reverse charge to hard drives, however, would require a council implementing decision. The Commission recommends that such a derogation be granted to Poland from January 1, 2018 to December 31, 2020.

About the Author

Charles Riordan is a member of the Tax Research team at Sovos Compliance specializing in international taxation, with a focus on Value Added Tax systems in the European Union. Charles received his J.D. from Boston College Law School in 2013 and is an active member of the Massachusetts Bar.

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