1998D0198 — EN — 30.12.2003 — 003.001 — 1
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►B COUNCILDECISION
of9March1998
authorizing the United Kingdom to extend application of a measure derogating from Articles 6
and 17 of the Sixth Council Directive (77/388/EEC) on the harmonisation of the laws of the
Member Statesrelatingtoturnovertaxes
(98/198/EC)
(OJ L 76, 13.3.1998, p. 31)
Amended by:
Official Journal
No page date
►M1Council Decision 1999/79/EC of 18 January 1999 L 27 22 2.2.1999
►M2Council Decision 2000/747/EC of 27 November 2000 L 302 63 1.12.2000
►M3Council Decision 2003/909/EC of 22 December 2003 L 342 49 30.12.2003
▼B
COUNCILDECISION
of9March1998
authorizingtheUnitedKingdomtoextendapplicationofameasure
derogating from Articles 6 and 17 of the Sixth Council Directive(77/388/EEC) on the harmonisation of the laws of the Member
Statesrelating toturnovertaxes
(98/198/EC)
THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty establishing the European Community,
Having regard to the Sixth Council Directive 77/388/EEC of 17 May
1977 on the harmonisation of the laws of the Member States relating
to turnover taxes — Common system of value added tax: uniform basis
of assessment (1), and in particular Article 27 thereof,
Having regard to the previous Decision 95/252/EC (2),
Having regard to the proposal from the Commission,
Whereas, pursuant to Article 27(1) of Directive 77/388/EEC, the
Council, acting unanimously on a proposal from the Commission, may
authorise any Member State to introduce or extend special measures for
derogation from that Directive in order to simplify the procedure forcharging the tax or to prevent certain types of tax evasion or avoid-ance;
Whereas, by letter registered at the Commission on 6 October 1997, the
United Kingdom requested authorisation to extend application of thederogation previously granted to it by Decision 95/252/EC;
Whereas the other Member States were informed on 23 October 1997
of the United Kingdom's request;
Whereas the United Kingdom was authorised by Decision 95/252/EC
to apply until 31 December 1997 a measure derogating from Articles
6 and 17 of Directive 77/388/EEC;
Whereas the derogation in question is designed, firstly, to restrict to
50 % the right of the hirer or lessee of a car to deduct the VAT on
the hire or leasing transaction where the car is used for privatepurposes and, secondly, to waive the VAT payable on the private useof the car in question;
Whereas the objective of this restriction of the right to deduct is to tax
the private use of cars hired or leased by taxable persons at a flat rate;
Whereas the measure, by reducing the administrative burden on traders,
who are not required to keep records of private mileage, constitutes asimplification of the procedure for charging tax within the meaning ofArticle 27 of Directive 77/388/EEC;
Whereas the Commission adopted on 10 July 1996 a work programme,
accompanied by a schedule of proposals, providing for gradual, stage-
by-stage progress towards a common VAT system for the internal
market;
Whereas the authorisation is being granted until 31 December 1998 so
as to enable an assessment to be made at that time as to whether thederogation measure is consistent withth e Community approachtolimitations of the right to deduct VAT on certain expenditure, whichwill be adopted under that programme;
Whereas the derogation will not have an adverse impact on the
Community's own resources accruing from VAT,1998D0198 — EN — 30.12.2003 — 003.001 — 2
(1) OJ L 145, 13. 6. 1977, p. 1. Directive as last amended by Directive 96/95/
EC (OJ L 338, 28. 12. 1996, p. 89).
(2) OJ L 159, 11. 7. 1995, p. 19.
▼B
HAS ADOPTED THIS DECISION:
Article 1
By way of derogation from Article 17(2) and (3) of Directive 77/388/
EEC the United Kingdom is hereby authorised to restrict to 50 % theright of the hirer or lessee of a car to deduct the VAT on the cost of
hiring or leasing that car where it is used for private purposes.
Article 2
By way of derogation from Article 6(2)(a) of Directive 77/388/EEC the
United Kingdom is hereby authorised not to treat as supplies of
services for consideration the private use of a business car hired orleased by a taxable person.
Article 3
This authorisation shall expire on the date of the entry into force of the
Community rules determining what expenditure is not to be eligible forthe deduction of value added tax, in accordance with the first subpara-
graphof Article 17(6) of th e sixthVAT Directive, but on ►
M331
December 2004 ◄at the latest.
Article 4
This Decision is addressed to the United Kingdom.1998D0198 — EN — 30.12.2003 — 003.001 — 3
▼M2
▼B