Q. The thresholds in Annex II of the Financing Agreement, e.g 60 000 EUR, are they to be considered with or without value added tax?

A. Thresholds are VAT-free in the public procurement procedures. If needed, more information could be found on this site:

https://ec.europa.eu/growth/single-market/public-procurement/rules-implementation_en

Information on the public procurement legislation can also be found in PRAG. Article 4 of the Directive 2014/24/EU on public procurement stipulates that “This Directive shall apply to procurements with a value net of value-added tax (VAT) estimated to be equal to or greater than the following thresholds:”. Article 5 on the methods for calculating the estimated value of procurement indicates that “the calculation of the estimated value of a procurement shall be based on the total amount payable, net of VAT, as estimated by the contracting authority, including any form of option and any renewals of the contracts as explicitly set out in the procurement documents.”

Additionally, it has to be taken into account that certain public bodies in EU Member States, which are not able to recover the VAT, will have this amount as an eligible cost. The same occurs with some public bodies in certain CBC partner countries, in accordance with the text of their Financing Agreements. If the thresholds are considered VAT included, it would be lower for those beneficiaries able to recover it or exempted.

For these reasons, the thresholds in the ENI CBC IR, mentioned in the Financing Agreements, have to be considered as VAT-free.