5. TAXATION

1. 31977 L 0388: 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 (OJ L 145, 13.6.1977, p. 1), as last amended by:

- 32002 L 0038: Council Directive 2002/38/EC of 7.5.2002 (OJ L 128, 15.5.2002, p. 41).

(a) By way of derogation from Article 12(3)(a) of Directive 77/388/EEC, the Czech Republic may maintain a reduced rate of value added tax of not less than 5 % until 31 December 2007 on a) the supply of heat energy used by households and small entrepreneurs who are not registered for VAT for heating and the production of hot water, excluding raw materials used to generate heat energy, and b) on the supply of construction work for residential housing not provided as part of a social policy, and excluding building materials.

(b) For the purposes of applying Article 28(3)(b) of Directive 77/388/EEC, the Czech Republic may maintain an exemption from value added tax on international transport of passengers, referred to in point 17 of Annex F to the Directive, until the condition set out in Article 28(4) of the Directive is fulfilled or for as long as the same exemption is applied by any of the present Member States, whichever is the earlier.

2. 31992 L 0079: Council Directive 92/79/EEC of 19 October 1992 on the approximation of taxes on cigarettes (OJ L 316, 31.10.1992, p. 8), as last amended by:

- 32002 L 0010: Council Directive 2002/10/EC of 12.2.2002 (OJ L 46, 16.2.2002, p. 26).

By way of derogation from Article 2(1) of Directive 92/79/EEC, the Czech Republic may postpone the application of the overall minimum excise duty equivalent to 57 % of the retail selling price (inclusive of all taxes) and a minimum of EUR 60 per 1000 cigarettes for cigarettes of the price category most in demand until 31 December 2006, provided that during this period the Czech Republic gradually adjusts its excise duty rates towards the overall minimum excise duty provided for in the Directive. The Czech Republic may also postpone the application of the overall minimum excise duty of EUR 64 on the retail selling price (inclusive of all taxes) for cigarettes of the price category most in demand until 31 December 2007, provided that during this period the Czech Republic gradually adjusts its excise duty rates towards the overall minimum excise duty provided for in the Directive.

Without prejudice to Article 8 of Council Directive 92/12/EEC on the general arrangements for products subject to excise duty and on the holding, movement and monitoring of such products [2], and having informed the Commission, Member States may, as long as either of the above derogations applies, maintain the same quantitative limits for cigarettes which may be brought into their territories from the Czech Republic without further excise duty payment as those applied to imports from third countries. Member States making use of this possibility may carry out the necessary checks provided that these checks do not affect the proper functioning of the internal market.

3. 31992 L 0080: Council Directive 92/80/EEC of 19 October 1992 on the approximation of taxes on manufactured tobacco other than cigarettes (OJ L 316, 31.10.1992, p. 10), as last amended by:

- 32002 L 0010: Council Directive 2002/10/EC of 12.2.2002 (OJ L 46, 16.2.2002, p. 26).

By way of derogation from Article 3(1) of Directive 92/80/EEC, the Czech Republic may postpone the application of the overall minimum excise duties levied on tobacco products other than cigarettes until 31 December 2006.

Without prejudice to Article 8 of Council Directive 92/12/EEC on the general arrangements for products subject to excise duty and on the holding, movement and monitoring of such products [3], and having informed the Commission, Member States may, as long as the above derogation applies, maintain the same quantitative limits for tobacco products other than cigarettes which may be brought into their territories from the Czech Republic without further excise duty payment as those applied to imports from third countries. Member States making use of this possibility may carry out the necessary checks provided that these checks do not affect the proper functioning of the internal market.

[2] OJ L 76, 23.3.1992, p. 1. Directive as last amended by Directive 2000/47/EC (OJ L 193, 29.7.2000, p. 73).

[3] OJ L 76, 23.3.1992, p. 1. Directive as last amended by Directive 2000/47/EC (OJ L 193, 29.7.2000, p. 73).

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