New VAT directive

New VAT directive

On 28 November 2006 the EU Council of Ministers adopted a revised (re-cast) EC VAT Directive (Directive 2006/112) to replace both the First and the Sixth Directives. The text of this new principal directive was published in the Official Journal of the European Communities on 11 December and its provisions came into force on 1 January 2007. The new directive does not change current EC and UK VAT law.
The only impact on businesses is that they will now have an EC VAT law text that they should find easier to access and simpler to understand. The material has been extensively reorganised to provide a much simpler and clearer structure with additional headings and sub-headings and a significant reduction in confusing cross-references. As it will take some time to amend references to the current Sixth Directive in UK VAT law and public notices, businesses will need to familiarise themselves with the provisions of the new directive. To help with this, annex XII of the new directive has a correlation table that lists all the Sixth Directive articles and their equivalent in the new directive. Any references made in UK law to the repealed First and Sixth VAT Directives must be construed as references to the new directive and thus read in accordance with the correlation table.
Business Brief 22/06 dated 11 December 2006

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