EU Adopts New VAT and Excise Exemption for Supplies for European Defense Operations

The European Commission on April 24 adopted a proposal to create a new exemption from excise and value added tax for supplies for armed forces of European Union member states that are taking part in a European defense effort, it said in a press release. The newly adopted exemption mirrors one currently in place for EU armed forces participating in North Atlantic Treaty Organization defense operations, it said. “Under the new rules, armed forces deployed outside their own Member State would not pay VAT or excise duty to other Member States when they take part in a NATO defence effort or in a defence activity under the Common Security and Defence Policy (CSDP). By aligning the indirect tax treatment of both defence efforts, the initiative acknowledges the growing importance of the CSDP and military mobility which require supplies such as training materials, accommodation, provision of food and fuel -- all in principle currently subject to VAT,” the commission said.