Changes The Vat Code Approved By Decree-Law No. 394-B/84 Of 26 December, Establishing Special Rules On The Taxation Of Waste And Recyclable Scraps And Certain Related Services

Original Language Title: Altera o Código do IVA, aprovado pelo Decreto-Lei n.º 394-B/84, de 26 de Dezembro, estabelecendo regras especiais em matéria de tributação de desperdícios, resíduos e sucatas recicláveis e de certas prestações de serviços relacionadas

Subscribe to a Global-Regulation Premium Membership Today!

Key Benefits:

Subscribe Now

Read the untranslated law here:

1 PROPOSAL of law No. 62/X explanatory memorandum this proposal aims to modify the code of value added tax (VAT), with a view to creating a special regime of VAT applicable to broadcasts of recyclable waste and scrap and certain related services, determining that the settlement of the tax due for these operations, at all stages of the economic circuit , is carried out by the taxable purchaser of goods and services concerned. With this measure is intended to prevent situations of fraud that are checking in this sector of activity, arising from the fact that certain operators do not carry out the delivery in the coffers of the State that ended in the tax operations performed, but that gave right of deduction to their acquirers. The new rules apply, whose approval and implementation become urgent in view of the scale of the problem facing, come in the wake of the measures expressly provided for in the Government's programme, constituting one of its priorities with regard to the fight against fraud and tax evasion, as well as in the implementation of measures to enhance tax efficiency. Indeed, one of the features of this branch of activity involving transactions in waste and recyclable scraps, that collection operations are carried out by a large number of players, usually of small size, contributes to the increasing informality of their economic activity. The experience of other countries suggests that special measures to be applied to taxable persons which pursue these activities, based on the reversal of the taxable person, the VAT settlement to competing acquirer with the right to deduct, since that taxable person of this tax in the national territory. In the set of measures contained in the amendments to the State budget for 2005 within the scope of VAT, was referred to a legislative authorization in order to be created a special regime with the nature and purpose of the proposed. However, because these 2 measures involve a derogation from the provisions of article 21 of Council Directive 77/388/EEC of 17 May 1977 (sixth VAT directive), was directed to the European Commission a request for a derogation under article 27(1) of that directive, which, not having been decided on time, invalidated the implementation of the measures under the said legislative authorization. In the face of rules whose implementation now proposes, the natural or legal persons, non-exempt VAT taxpayers, who are purchasers of ferrous waste and scrap, as well as certain services on these goods, in specific annex to the VAT code, provided that the respective notifier or service provider is also a taxable person, must settle the imposed by these acquisitions and can at the same time exercise the right to deduct, under the general terms of the VAT code. Together with the implementation of a rule of reversal of the taxable person, even if the taxable person whose usual activity consists in the transmission of goods and in the provision of the services referred to in that annex are excluded from the special arrangements for exemption provided for in article 53 and of the system of small retail businesses referred to in article 60, both of the VAT code. As a result, is granted a period of one month to taxable persons covered, for VAT purposes, in those two special schemes and who commit the kind of operations here laid down, to submit the statement of changes referred to in article 31 of the VAT code, in order to carry out the change of its framework for the normal tax regime. However, and in order to be assured the unity of the regime now established, these taxpayers become responsible for the tax due for their purchases of goods and services it covered, from the date of entry into force. In addition, the billing requirement in cases where the taxable person carrying out transactions with individuals.

In accordance with subparagraph (d)) of article 197 of the Constitution, the Government presents to the Assembly of the Republic the following Bill.

3 Article 1 subject-matter this law introduces amendments to the code of value added tax, approved by Decree-Law No. 394-B/84 of 26 December, with its successive amendments, establishing special tax rules with regard to transmission of goods qualify as recyclable waste and scrap and certain services with these related.

Article 2 Amendment to the code of value added tax articles 2, 19, 28, 35, 48, 53 and 60 of the code of value added tax, approved by Decree-Law No. 394-B/84 of 26 December, shall be replaced by the following: ' article 2 [...]

1 - […]: a) […]; b) […]; c) […]; d) […]; e) […]; f) […]; g) […]; h) […]; I) the persons or bodies referred to in point (a)) that, in the national territory, are purchasers of the goods or services mentioned in the annex to this code and are entitled to 4 total or partial tax deduction, provided that the respective notifiers or taxable tax providers. 2 -[…]. 3 -[…]. 4 -[…].

Article 19 [...]

1 - […]: a) […]; b) […]; c) the tax paid for the acquisition of goods or services indicated in subparagraph (i)) of paragraph 1 of article 2 and paragraphs 8, 11, 13, 16, 17, 19 and 22) article 6; d) […]; e) […]. 2 -[…]. 3 -[…]. 4 -[…]. 5 -[…]. 6 -[…].

Article 28 [...]

1 -[…]. 2 -[…]. 3 -[…]. 4 -[…]. 5 -[…]. 6 -[…]. 7 -[…].

5 8-[...]. 9 -[…]. 10-[...]. 11-[...]. 12-[...]. 13-[...]. 14-[...]. 15-every taxable person referred to in subparagraph (i)) of paragraph 1 of article 2 are obliged to issue an invoice for each purchase of goods or services there mentioned when the respective notifier or provider is not a taxable person, does not apply in this case, the restrictions provided for in paragraph 11 of article 35 article 35 [...]

1 -[…]. 2 -[…]. 3 -[…]. 4 -[…]. 5 -[…]. 6 -[…]. 7 -[…]. 8 -[…]. 9 -[…]. 10-[...]. 11-[...]. 12-[...]. 13-invoices or equivalent documents issued by taxpayers notifiers of goods or service providers listed in Annex E to this code should contain the term ' VAT due by the acquirer ' means when this is a taxable person referred to in subparagraph (i)) of paragraph 1 of article 2 6 Article 48 [...]

1 - […]. 2-for this purpose, the invoices, equivalent documents and guides or notes to return, including those issued as purchaser under paragraphs 14:15 article 28, be numbered below, in one or more series properly referenced and should be kept in their original order, as well as all copies of which have been cancelled with the endorsements needed to identify those who replaced them, if appropriate. 3 - […].

Article 53 [...]

1-benefit from the exemption from tax taxable persons who, not having or being forced to have organised accounting for purposes of IRS or IRC, not practicing, export-import operations or related activities, or to exercise that activity consists in the transfer of goods or provision of services mentioned in Annex E to this code, have not reached in the previous calendar year , a turnover of more than € 10 000. 2 -[…]. 3 -[…]. 4 -[…]. 5 -[…].

Article 60 [...]

1 - […].

7 2 - […]. 3 - […]. 4 - […]. 5 - […]. 6 - […]. 7 - […]. 8-can not benefit from the special arrangements provided for in paragraph 1 the retailers who commit, import-export operations or activities related with them, intra-Community transactions referred to in (c)) of paragraph 1 of article 1 or of services not exempt of annual value exceeding € 250 euros, or those whose activity consists in the transfer of goods or provision of services mentioned in Annex E to this code. 9-Are excluded from the special scheme and shall be subject to particular or general discipline of VAT, as the case may be, are transfers of goods and services mentioned in Annex E to this code carried out on an occasional basis, as well as transmissions of fixed asset goods retailers subject to the arrangements laid down in this article, which should add, if appropriate the respective tax the calculated pursuant to paragraph 1, for the purposes of its delivery in the coffers of the State.»

Article 3 Amendment to the code of value added tax is added in the Annex and to the code of value added tax, approved by Decree-Law No. 394-B/84 of 26 December, with its successive amendments, as follows: ' annex and list of goods and services in the sector of waste and recyclable scraps referred to in subparagraph (i)) of paragraph 1 of article 2 the) supply of ferrous and non-ferrous waste , scrap and waste materials, notably of semi-finished products resulting from the processing, manufacturing or melting of non-ferrous metals;

8 b) supply of ferrous and non-ferrous products semi-transformados and benefits of certain associated processing services; c) the supply of residues and other recyclable materials consisting of ferrous and non-ferrous metals, their alloys, slag, ash, scales and industrial residues containing metals or their alloys, as well as supplies of services consisting in the sorting, cutting, fragmentation or pressing of these products; d) Deliveries, as well as benefits of certain related processing services, ferrous waste as well as parings, scrap, waste and used and recyclable material consisting of glass powder, glass, paper, cardboard, rags, bone, leather, composition leather, parchment, raw hides and skins, tendons and sinews, twine, cordage, rope, cables, rubber and plastic; and) Deliveries of materials referred to in point (d)), after processing in the form of cleaning, polishing, sorting, cutting or casting into ingots; f) supply of scrap and waste resulting from the processing of basic material.»

Article 4 Transitional Standard Without prejudice to taxation of their activities from the date of entry into force of this law, the taxable persons previously covered by articles 53 and 60 of the code of the VAT which, pursuant to articles 2 and 3 of this Act, must pass to be included in the normal scheme of taxation, must deliver within 30 days statement of changes referred to in article 31 of the same code.

Article 5 entry into force this law enters into force on 1 October 2006.

Seen and approved by the Council of Ministers of 30 March 2006.

9 Prime Minister the Minister of Parliamentary Affairs Minister Presidency