1998D0198 — EN — 01.12.2000 — 002.001 — 1
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►B COUNCIL DECISION
of 9 March 1998
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
States relating to turnover taxes
(98/198/EC)
(OJ L 76, 13.3.1998, p. 31)
Amended by:
Official Journal
No page date
►M1 Council Decision 1999/79/EC of 18 January 1999 L 27 22 2.2.1999
►M2 Council Decision 2000/747/EC of 27 November 2000 L 302 63 1.12.2000
▼B
COUNCIL DECISION
of 9 March 1998
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 States
relating to turnover taxes
(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 toturnover taxes — Common system of value added tax: uniform basis ofassessment (
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, 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 or avoidance;
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 orleasing transaction where the car is used for private purposes and,secondly, to waive the VAT payable on the private use of 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 of
Article 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 internalmarket;
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 the
derogation measure is consistent with the Community approach tolimitations of the right to deduct VAT on certain expenditure, which willbe adopted under that programme;
Whereas the derogation will not have an adverse impact on the
Community's own resources accruing from VAT,1998D0198 — EN — 01.12.2000 — 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 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 or leased by ataxable 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
subparagraph of Article 17(6) of the sixth VAT Directive, but on 31
December 2003 at the latest.
Article 4
This Decision is addressed to the United Kingdom.1998D0198 — EN — 01.12.2000 — 002.001 — 3
▼M2
▼B