Clarifications are provided for the uniform application of the provisions of Article 67 of Law 4484/2017 (Government Gazette A’ 110/1.8.2017), which added two new paragraphs 5 and 6 to Article 39a of the VAT Code (ratified by Law 2859/2000), following circular POL. 1134/2017.
Naming today: under the new VAT Code (Law 5144/2024) this reverse-charge rule corresponds to Article 45. In myDATA use exemption reason 16. Do not confuse it with the used-goods margin scheme (old Article 45 / new Article 52, myDATA code 22) — see used-goods document setup.
The provision was introduced to combat fraud and tax evasion and implements the option given to Member States by Article 199a of Directive 2006/112/EC.
In particular, the new paragraph 5 of Article 39a provides that, for supplies by a taxable person to another taxable person of mobile phones — meaning devices manufactured or adapted for use on a recognised network and operating on specific frequencies, whether or not used for other purposes — as well as games consoles, tablets and laptop computers, VAT is paid by the purchaser of the goods, provided that the purchaser has the right to deduct input VAT. The taxable person who supplies the goods referred to in the preceding sentence has the right to deduct the corresponding input VAT, does not charge VAT on the tax documents issued, and must state on them the phrase “Article 39a, the purchaser is liable for payment of the tax”.
Under Article 85 of Law 4484/2017 the new provisions apply from publication of the law, i.e. from 1.8.2017, for transactions for which the chargeable event arises under Article 16 of the VAT Code from that date onward. As a rule, the new provisions therefore apply to invoices or other tax documents that serve as invoices issued from 1.8.2017 onward. Application is not affected by a contract, tender or other agreement signed up to and including 1.8.2017 where the related tax document is issued from 1.8.2017.
B. Scope of the new provisions
1. Paragraphs 5 and 6 of Article 39a of the VAT Code apply and the tax documents are not charged with VAT if all of the following conditions are met:
(a) They concern goods supplied individually or as a single set, classified under the following Combined Nomenclature (CN) codes of the EU Common Customs Tariff (Council Regulation 2658/87, as applicable for 2017 by Implementing Regulation 1821/2016/6.10.2016):
- Mobile phones: “85171200”.
- Games consoles: “95045000”.
- Tablets and laptop computers: “84713000”.
(b) The counterparty is a taxable person with the right to deduct input VAT.
(c) They concern supplies of goods with place of taxation in Greece that are not exempt or otherwise taxed under other VAT Code provisions.
Where the above conditions are not met, the general VAT rules apply.
2. Indicatively, the following do not fall under paragraph 5 of Article 39a:
- Intra-EU acquisitions, imports, retail sales and self-supplies of such goods.
- Supplies of spare parts and accessories of the above goods when sold separately.
- Supplies of electronic payment devices used as “POS” means of payment, with or without a mobile SIM (customs heading 8470).
- Supplies of “PDA” and “HANDY TERMINAL” devices with or without a mobile SIM, where they do not meet the conditions of Chapter 84, Note 5, Chapters A to E of the Tariff (Regulation 2658/87 as amended by Regulation 1821/2016).
- Supplies of wireless communication devices that are not mobile phones (walkie-talkies), or cordless phones that may connect to a wired base. These fall under heading 8517 but not under code 85171200, which covers mobile phones only.
3. Where goods are supplied as a single set (i.e. a supply with one price regardless of packaging), it must be examined whether the set as a whole is classified under the above tariff headings. Where the set also includes other goods, classification looks at how closely the goods are related in use and whether the principal item — the one that gives the set its essential character and, generally, the highest value — falls under those headings.
Tariff classification of goods presented as “sets” within the meaning of the Tariff follows General Rule 3(b) for the interpretation of the Tariff and the conditions for its application, in line with the “Guidelines on the tariff classification of goods presented in sets put up for retail sale” (OJ C-105/2013) and DDΘΕΚΑ Α 1129434 ΕΞ/5-9-2017 ΕΔΥΟ (ADA: 6ΛΧΗ46ΜΠ3Ζ-ΠΑΠ). For tariff purposes under General Rule 3(b), a “set” means combinations of articles put up for retail sale and intended to be used together to meet a particular need or carry out a specific activity. They are classified in the heading of the article that gives the set its essential character. Otherwise each article is classified separately.
Example 1
An electronics retailer offers, for one package price, a laptop together with a carrying bag, a mouse and an extra battery to a taxable consultant. The supply of these goods as a single set falls under paragraph 5 of Article 39a of the VAT Code.
4. The competent Directorate to decide tariff classification of specific goods in case of doubt is the “Directorate of Tariff Matters, Special Regimes and Exemptions”.
5. Where goods within the scope of paragraph 5 of Article 39a and services are supplied for one price, it must be examined whether the transactions are so closely linked that they objectively form one economically indivisible supply, whether the supply of the goods is the principal element, and whether the service can be treated as ancillary to the supply of the goods.
Example 2
An electronics retailer supplies a laptop and provides one year of extended warranty beyond the manufacturer’s warranty, plus the operating system, for one price. The whole transaction value falls under paragraph 5 of Article 39a.
Example 3
A mobile-phone distributor in Greece offers, for promotional reasons, one year of screen insurance for one package price with any device purchase. The whole transaction value falls under paragraph 5 of Article 39a.
Example 4
A mobile-phone manufacturer supplies phones free of charge, or at a reduced price, if the customer signs a fixed-term telecom services contract of at least one year. In that case paragraph 5 of Article 39a does not apply, in line with circular POL 1078/1999.
6. A taxable person with the right to deduct input VAT means any person with a Greek VAT number (whether or not established in Greece) who is in the normal VAT regime (on registration or by change-of-details declaration).
Every taxable person is in the normal regime if at least one of their activities carries an input-VAT deduction right. For this rule, what matters is that the purchaser is in the normal VAT regime, regardless of whether the purchased goods are used in a deductible activity or in a secondary exempt activity without deduction. The purchaser pays the VAT and exercises any deduction right only to the extent allowed by the applicable rules.
If a taxable purchaser buys these goods for private use, they must not disclose their VAT number to the seller and the transaction must be charged with VAT.
Example 5
An ophthalmologist who mainly carries out exempt activities is in the normal VAT regime for medical research services. For e-prescriptions and patient records they buy a laptop. Because they are in the normal VAT regime, paragraph 5 of Article 39a applies. The purchaser accounts for the VAT on the VAT return they must file for the research activity, but does not deduct input VAT for this purchase because the laptop is used exclusively in exempt medical services without deduction.
Example 6
A business not established in Greece trades games consoles in Greece and is registered for VAT in Greece. Both its domestic purchases and its domestic sales fall under paragraph 5 of Article 39a.
7. Domestic supplies subject to more specific VAT Code rules do not fall under paragraph 5 of Article 39a. Indicatively:
(a) Taxable persons who supply under the special margin scheme of Article 45 of the VAT Code (old numbering; new Code Article 52) continue to apply that regime. See used-goods / margin-scheme setup.
(b) Taxable persons who exclusively carry out exempt supplies without input-VAT deduction, when they supply such goods after using them as fixed assets, do not charge VAT on the document under Article 22(1)(κθ’) of the VAT Code.
Example 7
A language school supplies an accounting office on 2.8.2017 with old laptops bought in 2015 because they are incompatible with new interactive boards. Those supplies are exempt under Article 22(1)(κθ’) and paragraph 5 of Article 39a does not apply.
(c) Persons not established in Greece who obtain a Greek VAT number because they or a group company apply import-VAT suspension (Article 29(4)(a) of Law 2960/2001) do not charge VAT on domestic supplies under Article 35(1)(η’) of the VAT Code.
(d) Application of decision POL 1167/2015 and joint ministerial decision Π.2869/2389/ΠΟΛ 137/4.5.1987 (GG B’ 236/12.5.1987), under Articles 24, 28 and 34 of the VAT Code, prevails over paragraph 5 of Article 39a.
(e) Supplies to Mount Athos continue under decision Π.7395/4269/ΠΟΛ.302/1987, as in force.
8. Paragraph 5 of Article 39a applies to the whole taxable amount of the transaction under the general rules. It does not matter whether the goods are new or used (unless the Article 45 / 52 margin scheme applies) or whether they are inventory or fixed assets. Where a fixed asset is supplied within the adjustment period, for the remaining years it is treated as used exclusively in taxable activities, because a supply under paragraph 5 of Article 39a is a taxable transaction (see Article 33(3) of the VAT Code).
Example 8
A mobile-phone importer charges, on a wholesale sale, consideration of €30,000 for 1,500 phones, a recycling levy, a copyright fee under Article 18(3) of Law 2121/1993 as in force, and transport costs. The whole taxable amount falls under paragraph 5 of Article 39a.
E. Seller’s obligations
1. Where the conditions apply, the supplies are within the VAT Code for the seller but are not charged with VAT, while the seller keeps the right to deduct related input VAT; the seller must therefore be in the normal VAT regime.
2. In every case the seller must check the counterparty’s details and the conditions of paragraph 5 of Article 39a. Private individuals, taxable persons exclusively under the special farmers’ regime of Article 41, taxable persons who exclusively make supplies without deduction (e.g. tutoring schools, small businesses under Article 39 of the VAT Code), and non-taxable legal persons never meet those conditions.
3. To confirm that the purchaser is a taxable person with input-VAT deduction right (normal VAT regime), the seller must ask for suitable evidence (e.g. a printout of “registry details” from TAXISnet “personalised information”, printed on the day before the transaction) and must check identity so that the system is not abused by non-qualifying persons (e.g. private individuals). Representatives of taxable purchasers must prove their authority. In any doubt the seller must charge VAT on the document.
Even for transactions below €500.00, settlement through banks or electronic payment means that can identify the taxable purchaser named on the document is recommended.
The seller’s duty ends with confirming that the purchaser is a taxable person with deduction right; the seller does not examine how the purchaser will use the goods (business deductible use, non-deductible use, or private use). Use by the purchaser is a matter for tax-authority control. Purchasers of such goods may be checked on a sample / random basis each year.
4. An electronic application was envisaged to help confirm the purchaser’s status.
5. On the tax document for supplies under paragraph 5 of Article 39a the seller does not charge VAT and states “Article 39a, the purchaser is liable for payment of the tax”. Where a more specific VAT Code rule provides for no VAT on the document, that more specific rule is stated instead.
Where some goods on the same document must be charged with VAT and others fall under paragraph 5 of Article 39a, the seller must show separately on the same document the VAT treatment of each item and the total taxable amount to which paragraph 5 applies. The mandatory wording then relates only to the tax amounts corresponding to that taxable amount.
6. Credit notes issued from 1.8.2017 for discounts or returns of goods within paragraph 5 of Article 39a follow those provisions if issued on time, whether or not the original documents were charged with VAT (correctly for supplies up to 31.7.2017, or incorrectly for supplies after 1.8.2017). If a discount covers both in-scope and out-of-scope goods, the taxable amount is apportioned.
For a credit note correcting an original invoice wrongly charged with VAT, follow circular POL 1052/4.4.2017.
If a document cancels a transaction that took place before 1.8.2017, regardless of the issue date of the credit note, the credit note must show the normal rate that applied to the original transaction, because the whole transaction is cancelled.
Example 9
A year-end turnover discount for total sales covering supplies from 1.1 to 31.7.2017 and supplies from 1.8.2017 to year-end falls under paragraph 5 of Article 39a (for the part after 1.8.2017 as applicable).
Example 10
On 15.9.2017 goods sold on 25.7.2017 with VAT are returned. The credit note is issued under paragraph 5 of Article 39a with the new rules.
7. The taxable amount of supplies under paragraph 5 of Article 39a is entered in box 349 of the VAT return (see circular POL 1082/2015).
F. Purchaser’s obligations
1. Where the conditions apply, acquisition by the purchaser (always a normal-regime taxable person) is a recipient transaction: the purchaser must account for the VAT due on those supplies and may also deduct that VAT if the goods are used for activities that give a deduction right (e.g. taxable supplies, intra-EU supplies). The applicable VAT rate is the standard rate under Article 21 of the VAT Code and the relevant tariff heading.
2. The VAT is paid by the purchaser with the periodic VAT return for the relevant period under Article 38 of the VAT Code. The value of goods acquired this way increases both taxable outputs — boxes “303”, “306” — and inputs — box “366” — for the period. The related VAT increases both output VAT — boxes “333” and “336” — and input VAT — box “386” (see circular POL 1082/2015).
3. If the supplier has issued a no-VAT invoice with “Article 39a, the recipient is liable for payment of the tax” and the recipient has not rejected that document, the purchaser is presumed to have declared taxable status with deduction right to the seller. The recipient must then file a VAT return for the period and pay the related tax. Specifically:
i. If the purchaser is in the normal regime because they carry out both deductible and non-deductible activities, and the goods are used exclusively in non-deductible activities, they must enter the VAT only on the outputs side of the VAT return in order to pay it (boxes “303”, “306”, “333”, “336”).
ii. If the goods are used jointly for deductible and non-deductible activities so there is no full deduction right, the deductible amount follows the pro-rata under Article 31 of the VAT Code. Non-deductible VAT is entered in box “411”.
iii. If the purchaser is a taxable person who exclusively makes non-deductible supplies, a non-taxable legal person, or a farmer under the special Article 41 regime, and VAT was wrongly omitted, they must pay the related VAT by a VAT return under Article 38(8) of the VAT Code (as an extraordinary return), unless the seller issues a supplementary invoice with VAT.
Input-VAT deduction right
1. If the conditions for Article 39a apply but invoices with VAT are received by taxable persons with a deduction right, no deduction is allowed for that VAT.
Under Article 32(1)(β’) of the VAT Code, deduction requires a lawful invoice (or equivalent) evidencing the supplies and the tax charged. Here charging VAT on the document is not provided for by law, so no deduction can be claimed for tax paid that was not due (see CJEU case C-564/15). The recipient should first ask the seller for a credit note under POL 1052/2017.
G. Other matters
1. Taxable persons who wrongly omit VAT under paragraph 5 of Article 39a must issue supplementary invoices for VAT only. Taxable persons who wrongly charge VAT must issue credit notes for VAT only under POL. 1052/2017.
2. Persons making supplies under Article 39a may claim refund of input VAT that was correctly charged and cannot be offset, under the applicable rules and circulars POL. 1090/2012, 1067/2013 and 1073/2004. The refund claim may be filed per tax period regardless of the type of inputs (e.g. trading stock up to 31.7.2017, fixed assets, expenses), subject to limitation.
EMDI / myDATA
For mapping reverse charge (myDATA code 16) in EMDI see Matching for Article 45. For the exemption table see VAT exemption reasons – myDATA.
Greek original: full Greek text.