1998D0023 — EN — 30.12.2003 — 002.001 — 1
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►B COUNCILDECISION
of19December 1997
authorising the United Kingdom to extend application of a measure derogating from Article
28e(1)oftheSixthCouncilDirective77/388/EEContheharmonisationofthelawsoftheMember
Statesrelating toturnovertaxes
(98/23/EC)
(OJ L 8, 14.1.1998, p. 24)
Amended by:
Official Journal
No page date
►M1Council Decision 2000/435/EC of 29 June 2000 L 172 24 12.7.2000
►M2Council Decision 2003/909/EC of 22 December 2003 L 342 49 30.12.2003
▼B
COUNCILDECISION
of19December 1997
authorisingtheUnitedKingdomtoextendapplicationofameasure
derogating from Article 28e(1) of the Sixth Council Directive 77/388/EEC on the harmonisation of the laws of the Member States
relatingtoturnovertaxes
(98/23/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 basisof assessment (
1), and in particular Article 27 thereof,
Having regard to the previous Decision 92/546/EEC (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, mayauthorise any Member State to introduce or extend special measures forderogation from that Directive in order to simplify the procedure forcharging the tax or to prevent certain types of tax evasion and avoid-
ance;
Whereas, by letter registered at the Commission on 21 February 1997,
the United Kingdom requested authorisation to extend application of
the derogation measure previously granted to it by Decision 92/546/EEC until 31 December 1996;
Whereas the other Member States were informed on 6 May 1997 of the
United Kingdom's request;
Whereas, pursuant to Decision 92/546/EEC, the United Kingdom is
authorised to introduce a special measure allowing the appropriateauthorities to direct that the open-market value be taken as the taxable
amount for intra-Community acquisitions of goods where the person
acquiring the goods is not a fully taxable person and there are family,legal or business ties, specified in national legislation, between theperson acquiring the goods and the supplier;
Whereas Decision 92/546/EEC empowered the United Kingdom to
supplement a special measure authorised by Council Decision (
3),
deemed to have been adopted on 11 April 1987, permitting the United
Kingdom to direct that the open-market value be taken as the taxable
amount for supplies of goods and services or imports where the reci-pient is a totally or partially exempt person and there are family, legalor business ties, specified in national legislation, between the personsupplying the goods or services and the recipient or between the person
importing the goods and the person to whom payment for them has to
be made;
Whereas the purpose of the measure in question is to prevent persons
withfamily, legal or business ties, specified in national legislation,from artificially reducing the prices of taxable transactions;
Whereas according to the case law of the Court of Justice of the
European Communities (
4), national derogation measures which are
intended to prevent fraud or tax avoidance are to be interpreted strictlyand can be used to derogate from the rules for determining the taxable1998D0023 — EN — 30.12.2003 — 002.001 — 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 351, 2. 12. 1992, p. 34.
(3) OJ L 132, 21. 5. 1987, p. 22.
(4) See Judgments of 10 April 1984, the Commission/Belgium (324/82, ECR
1984, p. 1861, item 29) and of 29 May 1997, Werner Skripalle (63/96,
ECR 1997, p. I-2847).
▼B
amount only within the limits strictly necessary to achieve this objec-
tive;
Whereas, the special measure is to apply only in cases where the
administration is able, based on the facts, to conclude that the determi-
nation of the taxable amount provided for in Article 28e of Directive77/388/EEC is influenced by family, business or legal ties betweenthe person who acquires the goods and the supplier; whereas theadministration may not act on mere presumptions, and the partiesconcerned must be allowed to adduce evidence to the contrary where
they dispute the level of the open value established by the administra-
tion;
Whereas the measure is limited in scope insofar as it will apply only to
taxable transactions where the recipient is a totally or partially exemptperson;
Whereas, given the limited scope of the derogation, the special measure
is proportionate to the aim pursued;
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 internalmarket;
Whereas, as the final package of proposals is scheduled for mid-1999,
the authorization is being granted until 31 December 1999 so as toenable an assessment to be made at that time as to whether the deroga-tion measure is consistent with the overall approach adopted under the
new common VAT system;
Whereas this derogation will have an adverse impact on the Commu-
nities' own resources arising from VAT,
HAS ADOPTED THIS DECISION:
Article 1
By way of derogation from Article 28e(1) of Directive 77/388/EEC, the
United Kingdom is hereby authorized, until ►M231 December
2006◄, to apply a special measure allowing the appropriate authori-
ties to direct that the open-market value be taken as the taxable amountfor intra-Community acquisitions of goods when the following two
conditions are met:
— the person who acquires the goods is not a fully taxable person and
there are family, legal or business ties specified in national legisla-tion, between the person acquiring the goods and the supplier,
— a number of facts make it possible to conclude that these family,
business or legal ties have influenced the determination of the
taxable amount provided for in the said Article 28e.
Article 2
This Decision is addressed to the United Kingdom.1998D0023 — EN — 30.12.2003 — 002.001 — 3