1967L0227 — EN — 15.12.1969 — 001.001 — 1
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►B FIRSTCOUNCILDIRECTIVE
of11April1967
ontheharmonisationoflegislationofMemberStatesconcerningturnovertaxes
(67/227/EEC)
(OJ P 71, 14.4.1967, p. 1301)
Amended by:
Official Journal
No page date
►M1Third Council Directive 69/463/EEC of 9 December 1969 L 320 34 20.12.1969
▼B
FIRSTCOUNCILDIRECTIVE
of11April1967
on the harmonisation of legislation of Member States concerning
turnovertaxes
(67/227/EEC)
THE COUNCIL OF THE EUROPEAN ECONOMIC COMMUNITY,
Having regard to the Treaty establishing the European Economic
Community, and in particular Articles 99 and 100 thereof;
Having regard to the proposal from the Commission;Having regard to the Opinion of the European Parliament;
Having regard to the Opinion of the Economic and Social Committee;
Whereas the main objective of the Treaty is to establish, within the
framework of an economic union, a common market within whichthere is healthy competition and whose characteristics are similar to
those of a domestic market;
Whereas the attainment of this objective presupposes the prior applica-
tion in Member States of legislation concerning turnover taxes suchas
will not distort conditions of competition or hinder the free movementof goods and services within the common market;
Whereas the legislation at present in force does not meet these require-
ments; whereas it is therefore in the interest of the commom market toachieve such harmonisation of legislation concerning turnover taxes aswill eliminate, as far as possible, factors which may distort conditionsof competition, whether at national or Community level, and make it
possible subsequently to achieve the aim of abolishing the imposition
of tax on importation and the remission of tax on exportation in tradebetween Member States;
Whereas, in the light of the studies made, it has become clear that such
harmonisation must result in the abolition of cumulative multi-stagetaxes and in the adoption by all Member States of a common systemof value added tax;
Whereas a system of value added tax achieves the highest degree of
simplicity and of neutrality when the tax is levied in as general amanner as possible and when its scope covers all stages of production
and distribution and the provision of services; whereas it is therefore in
the interest of the common market and of Member States to adopt acommon system which shall also apply to the retail trade;
Whereas, however, the application of that tax to retail trade might in
some Member States meet withpractical and political difficulties;whereas, therefore, Member States should be permitted, subject to priorconsultation, to apply the commom system only up to and including thewholesale trade stage, and to apply, as appropriate, a separate comple-
mentary tax at the retail trade stage, or at the preceding stage;
Whereas it is necessary to proceed by stages, since the harmonisation
of turnover taxes will lead in Member States to substantial alterations
in tax structure and will have appreciable consequences in thebudgetary, economic and social fields;
Whereas the replacement of the cumulative multistage tax systems in
force in the majority of Member States by the common system of valueadded tax is bound, even if the rates and exemptions are not harmo-nised at the same time, to result in neutrality in competition, in thatwithin each country similar goods bear the same tax burden, whatever
the length of the production and distribution chain, and that in interna-
tional trade the amount of the tax burden borne by goods is known sothat an exact equalisation of that amount may be ensured; whereastherefore, provision should be made, in the first stage, for adoption byall Member States of the common system of value added tax, withoutan accompanying harmonisation of rates and exemptions;1967L0227 — EN — 15.12.1969 — 001.001 — 2
▼B
Whereas it is not possible to foresee at present how and within what
period the harmonisation of turnover taxes can achieve the aim of abol-ishing the imposition of tax on importation and the remission of tax on
exportation in trade between Member States; whereas it is therefore
preferable that the second stage and the measures to be taken in respectof that stage should be determined later on the basis of proposals madeby the Commission to the Council;
HAS ADOPTED THIS DIRECTIVE:
Article 1
Member States shall replace their present system of turnover taxes by
the common system of value added tax defined in Article 2.
In each Member State the legislation to effect this replacement shall be
enacted as rapidly as possible, so that it can enter into force on a dateto be fixed by the Member State in the light of the conjunctural situa-tion; this date shall not be later than ►
M11 January 1972 ◄.
From the entry into force of such legislation, the Member State shall
not maintain or introduce any measure providing for flat-rate equalisa-tion of turnover taxes on importation or exportation in trade between
Member States.
Article 2
The principle of the common system of value added tax involves the
application to goods and services of a general tax on consumptionexactly proportional to the price of the goods and services, whateverthe number of transactions which take place in the production anddistribution process before the stage at which tax is charged.
On each transaction, value added tax, calculated on the price of the
goods or services at the rate applicable to such goods or services, shallbe chargeable after deduction of the amount of value added tax borne
directly by the various cost components.
The commom system of value added tax shall be applied up to and
including the retail trade stage.
However, until the abolition of the imposition of tax on importation
and the remission of tax on exportation in trade between MemberStates, Member States may, subject to the consultation provided for in
Article 5, apply this system only up to and including the wholesale
trade stage, and may apply, as appropriate, a separate complementarytax at the retail trade stage or at the preceding stage.
Article 3
The Council shall issue, on a proposal from the Commission, a second
Directive concerning the structure of, and the procedure for applying,the common system of value added tax.
Article 4
In order to enable the Council to discuss this, and if possible to take
decisions before the end of the transitional period, the Commissionshall submit to the Council, before the end of 1968, proposals as tohow and within what period the harmonisation of turnover taxes canachieve the aim of abolishing the imposition of tax on importation
and the remission of tax on exportation in trade between Member
States, while ensuring the neutrality of those taxes as regards the originof the goods or services.
In this connection, particular account shall be taken of the relationship
between direct and indirect taxes, which differs in the various MemberStates; of the effects of an alteration in tax systems on the tax andbudget policy of Member States; and of the influence which taxsystems have on conditions of competition and on social conditions inthe Community.1967L0227 — EN — 15.12.1969 — 001.001 — 3
▼B
Article 5
Should a Member State intend to exercise the power provided for in
the last paragraph of Article 2, it shall so inform the Commission in
good time, having regard to Article 102 of the Treaty.
Article 6
This Directive is addressed to the Member States.1967L0227 — EN — 15.12.1969 — 001.001 — 4