EU Council Approves VAT Derogation For Poland

by Ulrika Lomas, Tax-News.com, Brussels

25 December 2013

The Council of the European Union on December 17, 2013, adopted a decision authorizing Poland to introduce measures derogating from the EU VAT Directive in respect of VAT on the non-business use of road vehicles.

The measures involve a 50 percent limit to the right to deduct VAT on the purchase, intra-EU acquisition, importation, hire and leasing of motorized road vehicles, as well as expenditure related to such vehicles, where the vehicle is not solely used for business purposes. The 50 percent limit does not apply to vehicles weighing more than 3,500 kilograms or those with more than nine seats.

The decision will apply from January 1, 2014, until December 31, 2016, at the latest, or the date of entry into force of EU rules determining what expenditure relating to motorized road vehicles is not eligible for a full deduction of VAT.

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