EU Defense Fund Includes VAT Exemption for Purchases

A European Commission proposal for a new defense fund includes a temporary value-added tax exemption for defense products.

The Security Action for Europe or SAFE bill, published Wednesday, is a €150 billion ($162 billion) loan meant to shore up Europe’s defense capabilities. The proposal includes a provision that says “the supplies, including importation and intra-Union supplies, of defence products or other products for defence purpose” shall be temporarily exempted from a value-added tax.

• The proposal comes amid the ongoing war in Ukraine and doubts about continued US commitment to Europe’s defense.
• The SAFE bill will now ...