Electronic VAT exemption certificate: political agreement on the new directive

The directive will introduce an electronic certificate to replace the existing paper certificate that is used when goods are to be exempt from VAT, for example because they are imported for embassies, international organisations or armed forces.

Amendments to the initial Commission proposal limit the scope for the mandatory use of the electronic certificate to situations where two Member States are involved, and the exemption is not granted by way of a refund. Member States will have a transitional period of one year to adapt to the new system.

The agreements will go through technical and linguistic check before being presented to the Council for formal adoption. The texts will then be published in the EU's Official Journal and enter into force.

The introduction of an electronic VAT exemption certificate aims to simplify tax procedures, reducing administrative burdens on businesses. The digital certificate will enable the use of advanced electronic signatures and facilitate compatibility with digital administrative procedures. This change is expected to reduce costs, increase flexibility, and make it easier to administer VAT exemptions across the EU.

Background

On 8 July 2024, the Commission published two proposals with the aim of replacing the current paper VAT exemption certificate with an electronic VAT exemption certificate. The Council agreed on both these proposals. The European Parliament was consulted on the proposal for a directive and delivered its opinion on 13 November 2024.