29.12. 84 Official Journal of the European Corhmunities No C 347/5 
Proposal for a 19th Council Directive on the harmonization of the laws of the Member 
States relating to turnover taxes, amending Directive 77/388/EEC — common system of 
value added tax 
(COM(84) 648 final) 
(Submitted by the Commission to the Council on 5 December 1984) 
(84/C 347/05) 
THE COUNCIL OF THE EUROPEAN 
COMMUNITIES, 
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 certain differences of interpretation 
concerning the principles of territoriality relating to 
certain air and sea transport services should be 
resolved; 
Whereas the terms 'fixed establishment' and 'forms of 
transport' used in Article 9 of Council Directive 
77/388/EEC (x) should be clarified; 
Whereas the option of adopting as the taxable 
amount at importation the value defined by the 
customs rules is no longer compatible with the degree 
of integration achieved by the Community and with 
the objective of strengthening the internal market; 
Whereas it is necessary to define precisely the content 
of the exemptions relating to hospital and medical 
care, certain services closely linked to sport or 
physical education and certain cultural services with a 
view to ensuring their uniform application in the 
Member States; 
Whereas an exemption for the creative work of artists 
is an appropriate means of encouraging the 
development of cultural activities and the distribution 
of culture without causing distortion of competition, 
provided that it is limited to artists who create 
original works; Whereas the exercise of the right of option provided 
by Article 13C of Directive 77/388/EEC may involve 
difficulties if it is applied to services rendered by 
financial institutions in issuing or managing payment 
cards or other similar documents; whereas these 
services should therefore be excluded from the right 
of option; 
Whereas the absence of an exemption on importation 
for official publications and for printed matter 
distributed by political organizations recognized as 
such on the occasion of certain European or national 
elections, and for postage stamps valid for use for 
postal services within the territory of one of the 
Member States, leads to disparities in tax treatment; 
whereas such exemptions should consequently be 
provided for; 
Whereas the exemption provided by Article 15 of 
Directive 77/388/EEC should be extended to vessels 
and aircraft intended for breaking up; 
Whereas Article 17 (4) of Directive 77/388/EEC 
should be amended to take account of Council 
Directive 79/1072/EEC (2); 
Whereas the rules relating to the calculation of the 
deductible proportion laid down in Article 19 of 
Directive 77/388/EEC should be adapted to the 
special nature of certain banking and financial 
transactions; 
Whereas all these measures contribute to an increased 
degree of uniformity in the assessment basis for 
collection of own resources provided for by Council 
Decision 70/243/ECSC, EEC, Euratom (3); 
Whereas the period laid down in Article 34 of 
Directive 77/388/EEC for presentation of the report 
on the application of the common system of value 
added tax should be adjusted, 
(») OJ No L 145, 13. 6. 1977, p. 1. (2) OJ No L 331, 27. 12. 1979, p. 11. 
O OJ No L 94, 28. 4. 1970, p. 19. 
No C 347/6 Official Journal of the European Communities 29.12. 84 
HAS ADOPTED THIS DIRECTIVE: 
Article 1 
Directive 77/388/EEC is hereby amended as follows: 
1. Article 9 is amended as follows: 
(a) The following is added to paragraph 2 (b): 
'a journey by sea or air shall be deemed to 
take place entirely within a country when the 
place of departure and the place of arrival are 
in that country, provided there is no stop in 
another country;' 
(b) The following paragraph 4 is added: 
'4. (a) The expression "fixed establishment" 
in this Article means any fixed instal­
lation of a taxable person, even if no 
taxable transaction can be carried out 
there; 
(b) The expression "forms of transport" 
in this Article includes pallets and 
containers, and equipment and 
apparatus capable of being drawn or 
pushed in order to perform a contract 
for transport or towing.' 
2. Article 11B (2) is replaced by the following: 
'2. For the purposes of establishing the taxable 
amount the Member States may, in the case of 
goods which are not in one of the situations 
referred to in Articles 9 and 10 of the Treaty, 
adopt the customs value determined in 
accordance with the Community rules in force.' 
3. Article 13A (1) is amended as follows: 
(a) Point (b) is replaced by the following: 
'(b) hospital and medical care and closely 
related activities undertaken by hospitals, 
centres for medical treatment or 
diagnosis and other duly recognized 
establishments of a similar nature;' 
(b) In point (m), 'certain services' is replaced by 
'services'; (c) Point (n) is replaced by the following: 
'(n) the following services and goods closely 
linked thereto supplied by bodies 
governed by public law or by other 
cultural bodies recognized by the 
Member State concerned: 
— services rendered to the public by 
libraries, records offices and docu­
mentation centres, 
— entry to museums, galleries, picture 
galleries, monuments, historic sites, 
botanical gardens and zoos, 
— theatrical, musical, choreographic 
and cinematograph performances, 
— the organization of exhibitions and 
lectures.' 
(d) The following points (r) and (s) are added: 
'(r) the supply of works of art by the artist 
who created them, where they fall into 
the following categories: 
— paintings, drawings and pastels 
including copies, executed entirely by 
hand, excluding hand-decorated 
manufactured wares and industrial 
drawings, 
— lithographs, prints and engravings, 
signed and numbered by the artist, 
obtained from lithographic stones, 
plates or other engraved surfaces, 
executed entirely by hand, 
— original sculptures and statuary, 
excluding mass-producered repro­
ductions and handicrafts of a 
commercial nature, 
— tapestries made by hand from 
original designs provided by artists, 
provided that there is not more than 
one example of each, 
— original ceramics and mosaics on 
wood. 
(s) The supply of services consisting of the 
public performance of their art by actors, 
musicians, dancers and other performing 
artists and the supply of services by 
authors, composers and writers.' 
29.12.84 Official Journal of the European Communities No C 347/7 
4. The following is added to the second paragraph 
of Article 13c: 
'The right of option allowed for transactions 
covered in B (d) may not be granted in respect of 
services rendered by financial institutions in 
issuing or managing payment cards or other 
similar documents.' 
5. The following points (k) and (1) are added to 
Article 14 (1): 
'(k) importations of official publications issued 
under the authority of States, international 
institutions, regional or local authorities and 
bodies under public law, and printed matter 
distributed by political organizations 
officially recognized as such in the Member 
States either on the occasion of elections to 
the European Parliament or on the occasion 
of national elections in the country in which 
the printed matter originates; 
(1) importations of mint postage stamps valid 
for use for postal services in one of the 
Member States and sent by the postal 
authorities of a Member State.' 
6. Article 15 is amended as follows: 
(a) The following is added to point 5: 
'this exemption extends to sea-going vessels 
intended for breaking-up;' 
(b) The following is added to point 6: 
'this exemption extends to aircraft intended 
for breaking-up;' 
7. Article 17 (4) is replaced by the following: 
'4. Refunds to taxable persons established in 
another Member State who do not carry out any 
taxable transaction within the country shall be 
made in the circumstances and in accordance 
with the conditions laid down in Council 
Directive 79/1072/EEC (*). 
Refunds to taxable persons established in another 
Member State who carry out taxable transactions 
within the country, for which the person 
designated by the Member State as the person 
liable in application of Article 21 (1) (a) can only 
be a person other than the taxable person, shall 
be made according to a procedure similar to that 
described in the abovementioned Directive. In relation to taxable persons who are not 
established within the Community (Member 
States may refuse the refund or impose supple­
mentary conditions) (1). 
(*) OJ No L 331, 27. 12. 1979, p. 11.' 
8. The following is added to the second indent of 
Article 19(1): 
'The amount to be included in the denominator 
shall be reduced by the purchase price of 
transfers of currency and securities exempted 
pursuant to Article 13B (d) (4) and (5); this 
amount shall include, where appropriate, 
commission and expenses incurred by the 
purchaser. Where the taxable person cannot 
determine the purchase price he may substitute 
therefor the purchase price of currency or 
securities acquired during the same period, 
provided those currencies or securities are 
identical with those sold.' 
9. Article 34 is replaced by the following: 
'Article 34 
Every five years the Commission shall, after 
consulting the Member States, send the Council 
and the European Parliament a report on the 
application of the common system of value added 
tax in the Member States.' 
10. Annex F is amended as follows: 
(a) Point 2 is replaced by the following: 
'2. Services supplied by lawyers and 
members of other professions, except the 
medical and paramedical professions, in so 
far as these are not services specified in 
Annex B to the Second Council Directive of 
11 April 1967;' 
(b) Point 10 is deleted. 
Article 2 
The Member States shall bring into effect the 
provisions necessary to comply with this Directive by 
1 January 1987 at the latest. 
Article 3 
This Directive is addressed to the Member States. 
(') Wording reproduced from the old paragraph 4, to be 
maintained until the 13th Directive is adopted.