Q&As

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REACH-IT

Invoicing and Payments

Why is ECHA's invoice without value added tax (VAT)?

ECHA does not carry out an economic activity within the meaning of Directive 2006/112/EC on the common system of value added tax. This means that no VAT has to be paid on the fees defined in Regulation (EC) No 340/2008 ('the REACH Fee Regulation'). For the reason above, ECHA has no VAT number and ECHA's invoices are exempt from VAT. ECHA's Finnish Business ID number is 2139942-8 and it is always mentioned on ECHA's invoices. However, this number is not a VAT number.

Why are the activities of ECHA not taxable?
It is important to note that ECHA is not a private company or a service provider but a European public authority established by Regulation (EC) No 1907/2006 ('the REACH Regulation') which is directly applicable in all Member States. Article 102 of REACH provides that the Protocol of Privileges and Immunities of the European Communities shall apply to the Agency. This Protocol is part of the EU Treaties also directly applicable in all Member States, and according to the Protocol, the Agency is exempt from all taxes.
 
The exclusion of ECHA activities and transactions from taxation also results from Article 13(1) of Directive 2006/112/EC (2 on a common system of value added tax, which stipulates:
 
"States, regional and local government authorities and other bodies governed by public law shall not be regarded as taxable persons in respect of the activities or transactions in which they engage as public authorities, even where they collect dues, fees, contributions or payments in connection with those activities or transactions".
 
As it is not a taxable person, ECHA does not have a tax residence in any Member State and thus has no taxation number in Finland.
 
The invoices that ECHA sends to companies relate to fees for PPORD notification, registration and other submissions that ECHA collects pursuant to Regulation (EC) No 1907/2006 ('the REACH Regulation') and Commission Regulation (EC) No 340/2008 ("the REACH Fee Regulation"). Thus, they do not concern private transactions but are fees under public law applicable in all Member States. Based on Directive 2006/112/EC and particularly Article 13(1), these fees are not subject to taxation in any Member State. In the absence of taxation of the fees in any Member State or elsewhere, ECHA shall not be bound to complete any formalities imposed on taxable persons for the avoidance of double taxation.
 

Thus it is important to note that ECHA is unable to provide registrants a VAT or a withholding tax / tax at source residence certificate. As ECHA has no tax residence in any Member State. In QA 739 ECHA has published a financial identification form confirming its Finnish business ID.

1) OJ C 310, 16.12.2004, p. 261
2) OJ L 347, 11.12.2006, p. 1

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