Key Benefits:
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PROPOSED LAW NO. 62 /X
Exhibition of Motives
This proposed Act is intended to amend the Tax Code on Value
Added (VAT), with a view to creating a special VAT regime applicable to the
wastage transmissions, waste and recyclable scrap and certain services
related, mandating that the settlement of the tax due by these operations, in
all phases of the economic circuit, be carried out by the taxable person acquirer of the
goods and services in question.
With this measure you intend to avoid fraud situations that come by checking in this
sector of activity, arising from the circumstance of certain operators not
proceed to delivery in the state coffers of the tax that settled in the operations
conducted, but which conferred right to the deduction on the respective purchasers.
The new rules to be applied, the approval and implementation of which become urgent in the face of
dimension of the problem to be faced, come in the wake of the measures expressly provided for
in the Government's programme, constituting one of its priorities in what concerne the
combat fraud and tax evasion, as well as in the implementation of reinforcement measures
of tax efficiency.
Indeed, one of the characteristics of this branch of activity involving the operations
on waste, wastage and recyclable scrap, consists of the fact that the operations of
collection being carried out by a high number of actors, usually from
reduced size, which much contributes to the increase in the informality of the
respective economic activity.
The experience harvested from other community countries advises that they adopt
special measures, to be applied to the taxable persons pursuing these activities,
based on the inversion of the passive subject, competing for the liquidation of the VAT to the acquirer,
with right to deduction, provided that taxable person of this tax in the national territory.
On the set of the measures set out in the changes to the State Budget for 2005
within the scope of VAT, a legislative permit has been provided for the purpose of being created a
special regime with the nature and purpose of the proposed one. However, because these
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measures imply a derogation from the provisions of Article 21 of the Council Directive
77 /388/CEE, of May 17, 1977 (Sixth VAT Directive), was addressed to the Commission
European a request for derogation under Article 27 of the cited Directive, which,
not having been in a timely manner, invalidating the implementation of the
measures in question under the said legislative authorization.
In the face of the rules the implementation of which is proposed, natural or legal persons,
non-exempt VAT taxable persons, who are purchasers of waste, waste and
scraps, as well as certain benefits of services carried out on such goods,
specific attachment constants to the VAT Code, provided that the respective transmitent
or provider is also a taxable person of tax, must settle the tax by
these acquisitions and may, at the same time, exercise the right to deduction, in the general terms
of the VAT Code.
Alongside the implementation of an inversion rule of the passive subject, it determines
even if the taxable persons whose usual activity consisted in the transmission of the goods
and in the provision of the services mentioned in the said Annex are excluded from the scheme
special exemption provided for in Article 53 and the scheme of the planned small retailers
in Article 60, both of the VAT Code.
As a result, a one-month period is granted to the framed taxable persons,
for VAT purposes, in those two special schemes and practicing the type of
operations here planned, to submit the declaration of changes referred to in the
Article 31 of the VAT Code, in order to make these proceed to the amendment of your
framework for the normal taxation regime. However, and by way of being
ensured the unity of the now established regime, these passive subjects become
responsible for the tax due to the respective purchases of goods and services by
it covered, as soon as from the date of entry into force of the same.
In parallel, it introduces itself to mandatory self-invoicing in cases where the
taxable persons carry out operations with private individuals.
Under the terms of the paragraph d) of Article 197 of the Constitution, the Government presents to the
Assembly of the Republic the following proposal for a law.
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Article 1.
Subject
This Law introduces amendments to the Value Added Tax Code,
approved by Decree-Law No. 394-B/84 of December 26, with its successive
amendments, establishing special rules of taxation in respect of transmission of
skilled goods such as wastage, waste and recyclable scrap and certain benefits
of services with these related.
Article 2.
Amendment to the Value Added Tax Code
Articles 2, 19, 28, 48, 53, 53 and 60 of the Tax Code on Value
Added, approved by the Decree-Law No. 394-B/84 of December 26, pass the
have the following wording:
" Article 2.
[...]
1-[...]:
a) [...];
b) [...];
c) [...];
d) [...];
e) [...];
f) [...];
g) [...];
h) [...];
i) The natural or legal persons referred to in ( a) that, in the
national territory, be purchasers of the goods or services
mentioned in Annex E to this Code and are entitled to
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total or partial deduction of the tax, provided that the respective
transmitters or providers are taxable persons of the tax.
2-[...].
3-[...].
4-[...].
Article 19.
[...]
1-[...]:
a) [...];
b) [...];
c) The tax paid for the purchase of the goods or services indicated in the
point ( i) of Article 2 (1) and in paragraphs 8, 11, 13, 16, 17, 17 b) , 19
and 22 of Article 6;
d) [...];
e) [...].
2-[...].
3-[...].
4-[...].
5-[...].
6-[...].
Article 28.
[...]
1-[...].
2-[...].
3-[...].
4-[...].
5-[...].
6-[...].
7-[...].
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8-[...].
9-[...].
10-[...].
11-[...].
12-[...].
13-[...].
14-[...].
15-The taxable persons referred to in ( i) of Article 2 (1) are
required to issue an invoice for each purchase of goods or services there
mentioned when the respective transmitant or provider is not a
taxable person, not applying, in such a case, the foreseen constraints
in Article 35 (11)
Article 35.
[...]
1-[...].
2-[...].
3-[...].
4-[...].
5-[...].
6-[...].
7-[...].
8-[...].
9-[...].
10-[...].
11-[...].
12-[...].
13-The equivalent invoices or documents issued by taxable persons
transmitters of the goods or providers of the services mentioned in Annex E
to this Code must contain the expression " VAT due by the
acquirer ", when this is a taxable person of those mentioned in the (
i) of Article 2 (1)
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Article 48.
[...]
1-[...].
2-For such an effect, the invoices, equivalent documents and guides or notes of
devolution, including those that are issued in the quality of acquirer to the
item No. 14 and 15 of Article 28, will be numbered below, in
one or more conveniently referenced series, and should conserve
in the respective order their originals and, well thus, all copies of the
that have been annulled, with the averbings indispensable to the
identification of those who have replaced them, if any.
3-[...].
Article 53.
[...]
1-Benefit from the exemption from tax the taxable persons who, no
possessing not even being required to possess organized accounting for
effects of IRS or IRC, nor practicing import, export operations
or related activities, nor by exerting activity that consists in the
transmission of the goods or provision of the services mentioned in Annex E to the
this Code, have not reached, in the previous calendar year, a volume of
business more than € 10000.
2-[...].
3-[...].
4-[...].
5-[...].
Article 60.
[...]
1-[...].
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2-[...].
3-[...].
4-[...].
5-[...].
6-[...].
7-[...].
8-They cannot benefit from the special scheme provided for in paragraph 1 by retailers
practicing import, export or activities with them
related, intra-Community operations referred to in para. c) of paragraph 1 of the
article 1 or benefits of services not free of annual value above €
EUR 250, nor those whose activity consisted in the transmission of the goods or
provision of the services mentioned in Annex E to this Code.
9-Are excluded from the special scheme, becoming subject to the particular discipline
or general of VAT, as the case may be, transmissions of goods and benefits
of services mentioned in Annex E to this Code made of the title
occasional, as well as transmissions of assets from the immobilized asset of the
retailers subject to the scheme provided for in this article, which should
add, where appropriate, the respective tax on the ascertained in the terms of
n. 1, for the purposes of its delivery in the state coffers. "
Article 3.
Addition to the Value Added Tax Code
The Annex E is added to the Value Added Tax Code, approved by the
Decree-Law No 394-B/84 of December 26, with its successive amendments, with the
following wording:
" ANNEX E
List of goods and services of the waste sector, waste and scrap
recyclables referred to in point (s) i) of Article 2 (1)
a) Deliveries of ferrous and non-ferrous waste, scrap and used materials,
particularly of semi-finished products resulting from the processing,
manufactures or melting of non-ferrous metals;
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b) Deliveries of ferrous and non-ferrous products semi-processed and
benefits of certain associated processing services;
c) Deliveries of waste and other recyclable materials consisting of
ferrous and non-ferrous metals, their alloys, slag, ash, scales and
industrial waste containing metals or their alloys, as well as
benefits of services consisting of sorting, cutting, fragmentation or
harbying of these products;
d) Deliveries, as well as benefits of certain processing services
related, of ferrous waste, as well as trims, scrap, waste and
used and recyclable materials that consist of glass powder, glass, paper,
card, rags, bones, leather, reconstituted leather, parchment, furs in
rough, tendons and nerves, cordéis, ropes, cables, rubber and plastic;
e) Deliveries of the materials referred to in para. d) , after processing under the
form of cleaning, polishing, sorting, cutting or smelting in lingotes;
f) Deliveries of scrap and waste resulting from the processing of materials
basis. "
Article 4.
Transient standard
Without prejudice to the taxation of their respective activities as of the date of entry into
vigour of this law, the taxable persons previously covered by Articles 53 and 60 of the
Code of VAT which, by virtue of Articles 2 and 3 of this Law, should pass
framed in the normal taxation regime, they must deliver, within 30 days of
statement of amendments provided for in Article 31 of the same Code.
Article 5.
Entry into force
This Law shall come into force on the October 1, 2006.
Seen and approved in Council of Ministers of March 30, 2006.
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The Prime Minister
The Minister of the Presidency
The Minister of Parliamentary Affairs