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22.1.2011 Official
Journal
of
the
European
Union L
19/11
DECISIONS
COUNCIL IMPLEMENTING DECISION
of 18 January 2011
amending Decision 2007/884/EC authorising the United Kingdom to continue to apply a measure
derogating from Articles 26(1)(a), 168 and 169 of Directive 2006/112/EC on the common system of
value added tax
(2011/37/EU)
THE COUNCIL OF THE EUROPEAN UNION,
business purposes. The United Kingdom was also allowed
not to treat as supplies of services for consideration the
private use of a car hired or leased by a taxable person
for his business purposes. This simplification measure
Having regard to the Treaty on the Functioning of the European
removed the need for the hirer or the lessee to keep
Union,
records of private mileage travelled in business cars and
to account for tax on the actual private mileage of each
car.
Having regard to Council Directive 2006/112/EC of
28 November 2006 on the common system of value added
tax ( 1 ), and in particular Article 395(1) thereof,
(4) According
to
the
information
provided
by
the
United
Kingdom, the restriction to 50 % still corresponds to
the actual circumstances as regards the business and
the non-business use by the hirer or lessee of the
Having regard to the proposal from the European Commission,
vehicles concerned. It is therefore appropriate that the
United Kingdom be authorised to apply the measure
for a further limited period, until 31 December 2013.
Whereas:
(5) Where
the
United
Kingdom
considers
a
further
extension
(1) In
a
letter
registered
by
the
Commission’s
Secretariat-
beyond 2013 is necessary, a report which includes a
General on 22 July 2010, the United Kingdom
review of the percentage applied should be submitted
requested authorisation to extend a derogating measure
to the Commission together with the extension request
in order to continue to restrict the right of deduction of
no later than 1 April 2013.
VAT by the hirer or lessee on charges for the hire or
lease of a passenger car where the car is not used entirely
for business purposes.
(6) On
29
October
2004,
the
Commission
adopted
a
proposal for a Council Directive amending Directive
77/388/EEC, now Directive 2006/112/EC, that includes
(2) The
Commission
informed
the
other
Member
States
of
the harmonisation of the categories of expenses for
the request made by the United Kingdom by letter dated
which exclusions of the right of deduction may apply.
12 October 2010. By letter dated 15 October 2010, the
Under this proposal, exclusions on the right to deduct
Commission notified the United Kingdom that it had all
may be applied to motorised road vehicles. The
the information necessary to consider the request.
derogating measures provided for in this Decision
should expire on the date of the entry into force of
such amending Directive, if that date is earlier than the
date of expiry provided for in this Decision.
(3) Council
Decision
2007/884/EC
of
20
December
2007
authorising the United Kingdom to continue to apply a
measure derogating from Articles 26(1)(a), 168 and 169
of Directive 2006/112/EC on the common system of
value added tax (
(7) The derogation has no impact on the Union’s own

2 ), authorised the United Kingdom to
restrict to 50 % the right of the hirer or lessee to
resources accruing from value added tax.
deduct input VAT on charges for the hire or lease of a
passenger car where the car is not used entirely for
( 1 ) OJ L 347, 11.12.2006, p. 1.
(8) Decision
2007/884/EC
should
therefore
be
amended
( 2 ) OJ L 346, 29.12.2007, p. 21.
accordingly,

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L 19/12
EN
Official Journal of the European Union
22.1.2011
HAS ADOPTED THIS DECISION:
Article 2
This Decision shall take effect on the day of its notification.
Article 1
Article 3 of Decision 2007/884/EC is replaced by the following:
This Decision shall apply as from 1 January 2011.
‘Article 3
This Decision shall expire on the date of entry into force of
Union rules determining the expenditure relating to
Article 3
motorised road vehicles that is not eligible for full
deduction of VAT, or on 31 December 2013, whichever is
This Decision is addressed to the United Kingdom of Great
the earlier.
Britain and Northern Ireland.
Any request for the extension of the measures provided for in
this Decision shall be submitted to the Commission by
Done at Brussels, 18 January 2011.
1 April 2013.
Any request for extension of those measures shall be accom
For the Council
panied by a report which includes a review of the percentage
restriction applied on the right to deduct VAT on the hire or
The President
lease of cars not entirely used for business purposes.’.
Gy. MATOLCSY

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