EU: Temporary VAT exemption, donated supplies (COVID-19)

So-called “buy and donate” directive

So-called “buy and donate” directive

The EU Council on 13 July 2021 adopted Directive 2021/1159 to amend the EU value added tax (VAT) Directive regarding temporary exemptions for imports of certain supplies in response to the coronavirus (COVID-19) pandemic.

The so-called “buy and donate” directive is intended to make it easier for the European Commission and EU agencies to buy goods and services in order to distribute them free-of-charge to EU Member States. Therefore, the VAT exemption would be available with regard to purchases made by an EU body for both official use and for donations to EU Member States, health authorities or hospitals.

The “buy and donate” directive has a retroactive effective date of 1 January 2021.

Once the COVID-19 emergency situation ends, the prior applicable VAT rates would be restored.

Read a July 2021 report prepared by the KPMG member firm in Cyprus


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