Germany · Proposed legislation
EU proposes extending Germany’s emission-allowance VAT reverse charge
On 16 October 2026, the European Commission proposed extending Germany’s authorisation to apply VAT reverse charging to national emission-allowance transfers until 30 June 2030. Council document 14648/26 circulated the proposal on 19 October; the extension is not enacted.
- Official document:
- COM(2026) 556 final, 2026/0318(NLE), proposed Article1 replacing Decision(EU)2021/1778 Article2; Directive2006/112/EC Article193
- Development date:
- 2026-10-16
A proposed continuation, not a new charge
Proposed Article 1 would replace Article 2 of Implementing Decision (EU) 2021/1778. The Commission describes the existing authorisation, extended by Decision (EU) 2024/2680, as expiring on 31 December 2026. That comparison is the proposal’s stated baseline, not an independent certification of the entire current-law chain.[1]
The measure concerns allowances under Germany’s Fuel Emission Allowance Trading Act (BEHG). It derogates from Article 193 of the VAT Directive, 2006/112/EC: the taxable recipient, rather than the supplier, accounts for VAT. The Commission explains that this limits missing-trader fraud in readily exchanged allowances.[1]
For multinational allowance traders, the proposal concerns continuity of the person liable, not a new entitlement or a general VAT exemption. The draft decision would take effect upon notification if adopted. Neither its circulation nor Germany’s extension request establishes an operative post-2026 authorisation.[1]
Official sources
- [1] Council14648/26 transmitting Commission proposal COM(2026)556 final
European Commission / Council of the European Union · Document date: 2026-10-16
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