20. 7. 88 Official Journal of the European Communities No C 191/3 
II 
(Preparatory Acts) 
COURT OF AUDITORS 
OPINION No 5/88 
of the Court of Auditors of the European Communities on a proposal for a Council Regulation 
(ECSC, EEC, Euratom) on the definitive uniform arrangements for the collection of own 
resources accruing from value added tax (VAT) 
(88/C 191/04) 
THE COURT OF AUDITORS OF THE EUROPEAN 
COMMUNITIES, 
Having regard to the Treaty of the European Coal and 
Steel Community, and in particular to Article 78 thereof, Whereas in its opinion No 2/85 (*) the Court of 
Auditors deplored the prolongation of the transitional 
arrangements for calculating VAT own resources which 
involved two different methods and suggested that the 
determination of one definitive method could simplify 
the VAT own resources system; 
Having regard to the Treaty establishing the European 
Economic Community, and in particular to Article 209 
thereof, 
Having regard to the Treaty establishing the European 
Atomic Energy Community, and in particular to Article 
183 thereof, Whereas the uniformity of the proposed common system 
for determining VAT own resources requires that the 
Commission should have adequate means to monitor the 
operation of the system in each Member State so as to 
ensure equality between Member States in regard to 
which the Court expressed concern in paragraphs 3.11 to 
3.16 of its Annual Report for 1985 (7); 
Having regard to the Decision of 7 May 1985 on own 
resources (') (hereinafter referred to as 'the Decision'), 
and in particular to Article 7 (2) thereof, 
Having regard to the proposal from the Commission (2), Whereas, under a system of stastistical calculation such as 
that envisaged by the proposal, VAT own resources will be 
determined on the basis of the amounts of national VAT 
actually levied by each of the Member States; 
Whereas under Article 14 of Council Regulation (EEC, 
Euratom, ECSC) No 2892/77 (3), as last amended by 
Regulation (ECSC, EEC, Euratom) No 3735/85 (4), that 
Regulation applies for a transitional period ending on 
31 December 1988 and therefore a new Council Regu­
lation is required to provide for the continuing 
implementation of the Decision; 
Whereas the Court of Auditors has, in its Annual 
Reports (5), drawn attention to the absence of a common 
system for determining VAT own resources; 
0) OJ No L 128, 14.5.1985, p. 15. 
O Doc. COM(88) 99 final. 
(») OJ No L 336, 27.12.1977, p. 8. 
(4) OJ No L 356, 31.12.1985, p. 1. 
O OJ No C 357, 31.12.1983, paragraphs 3.6-3.11; 
OJ No C 326, 16.12.1985, paragraph 3.11. Whereas, in this context the Commission proposes in 
Article 12 of the proposal to examine, with the 
cooperation of the competent authorities in the Member 
States, the procedures applied by the Member States for 
registering taxable persons and determining and 
collecting VAT, and the effectiveness of the VAT 
control systems and to present a report every three years 
to Parliament and the Council on the actual collection of 
VAT in each Member State; 
Whereas, in order to meet its obligations concerning the 
control of budgetary revenue, and, accordingly, of VAT 
own resources, it ought to be possible for the Commission, 
in addition to the access it has to data describing the 
national systems for control of revenue obtained from 
(') OJ No C 261, 12.10.1985, p. 3. 
O OJ No C 321, 15.12.1986. 
No C 191/4 Official Journal of the European Communities 20. 7. 88 
VAT levied in the Member States, to be kept informed as to 
the results of controls carried out in the Member States and 
to be able to carry out compliance tests in order to ascertain 
the effectiveness with which national VA T is levied, determining the collection base for VAT own resources, 
the Court considers it essential to indicate the extent to 
which the Commission should conduct its examinations 
in the framework of the proposed Article 12. 
HAS ADOPTED THE FOLLOWING OPINION: 
PART 1 
General Observations 
1.1. While the Court welcomes the Commission 
proposal in that it provides for a uniform method for 1.2. The Court has considered the proposal with a 
view to seeking improvements which could strengthen 
the equality, uniformity and effectiveness of the 
proposed system. Its opinion with regard to the detailed 
Articles and paragraphs is given in Part 2 hereof. 
PART 2 
Proposals of the Commission Amendments proposed by the Court Comment 
Article 4 (5): 
For the purpose of identifying transactions 
subject to non-deductible VAT and 
effecting the breakdown by rate of VAT, 
the Member States may refer to data taken 
from sources complementary to the ESA 
and capable of being adapted thereto, that 
is, in the first instance, from internal 
national accounts if they provide the 
necessary breakdown, or, if not, from any 
other appropriate source. 
Article 5 (3): 
For any given year amounts of VAT which 
become time-barred, are written off or 
waived during the year pursuant to 
national provisions shall be added to the 
revenue collected by a Member State, with 
the exception of amounts which: 
— could not be recovered despite 
enforcement action, 
— were not paid by reason of application 
of the final indent of Article 22 (9) of 
Directive 77/388/EEC. 
Articled (4): For the purpose of identifying trans­
actions subject to non-deductible VAT 
and effecting the breakdown by rate of 
VAT, Member States may be auth­
orized, in accordance with the procedure 
provided for in Article 13, to use data 
taken from sources complementary to 
the ESA and capable of being adapted 
thereto, that is, in the first instance, 
from internal national accounts if they 
provide the necessary breakdown, or, if 
not, from any other appropriate source. 
For any given year amounts of VAT 
which become time-barred, are written 
off or waived during the year pursuant 
to national provisions shall be added to 
the revenue collected by a Member 
State. 
Where amounts of VAT are in arrears 
for a period exceeding two years from 
the date they first became due they shall 
be added to the revenue collected. The Member States should not be able to 
use data external to the ESA without the 
agreement of the Commission in 
accordance with the procedure provided 
for in Article 13 in order to ensure that 
the most appropriate data is used by all 
Member States, if for any reason the use 
of ESA data is not possible. 
In the interests of equality amongst 
Member States it would be better not to 
provide for exceptions to the general rule 
if the enforcement and application 
procedures relating to such exceptions are 
not at the same time harmonized. 
VAT in arrears is VAT due and there 
should therefore be a time limit on the 
period it can be excluded from the VAT 
own resources base. 
20. 7. Official Journal of the European Communities No C 191/5 
Proposals of the Commission Amendments proposed by the Court Comment 
Article 9 (1): 
The corrections to the statements referred 
to in Article 7 (1) for previous financial 
years shall be made by the Commission in 
agreement with the Member State. 
All the corrections to the statements shall 
be incorporated in an aggregate statement 
at 30 June. 
If the Member State does not give its 
agreement, the Commission, after re­
examining the matter, shall take whatever 
measures it considers necessary for correct 
application of this Regulation. 
Article 12 (1): 
The Commission shall examine, with the 
cooperation of the competent authorities 
in the Member States, the procedures 
applied by the Member States for regis­
tering taxable persons and determining 
and collecting VAT, and the effectiveness 
of their VAT control systems. 
Article 13 (2): 
Member States applying for the authori­
zation provided for in Article 4 (4) or 6 
(3) shall refer their application to the 
Commission as soon as possible and not 
later than 30 April of the financial year 
from which the authorization is to apply. The corrections to the statements 
referred to in Article 7 (1) for previous 
financial years shall be made by the 
Commission in agreement with the 
Member State. 
All the corrections to the statements 
shall be incorporated in an aggregate 
statement at 30 June. 
If the Member State does not give its 
agreement, the Commission, after re­
examining the matter, shall take 
whatever measures it considers 
necessary for correct application of this 
Regulation. 
VAT own resources due as a result of 
corrections made to statements shall be 
made available to the Community not 
later than the first working day of 
August following the establishment of 
the corrected statement. 
Without prejudice to Articles 80 to 82 
of the Financial Regulation, the 
Commission shall examine, with the 
cooperation of the competent auth­
orities in the Member States, the 
procedures applied by the Member 
States for registering taxable persons 
and determining and collecting VAT, 
and the effectiveness of their VAT 
control systems. For this purpose the 
Commission will, in particular, examine 
relevant global data and statistics, 
examine and obtain documentation on 
the relevant national control systems 
relating to the completeness of revenue 
and verify, as it considers necessary, all 
information received by means of 
compliance tests based, inter alia, on 
local records, registers and files. 
Member States applying for the authori­
zation provided for in Article 4 (4), (5) 
or 6 (3) shall refer their application to 
the Commission as soon as possible and 
not later than 30 April of the financial 
year from which the authorization is to 
apply. The current Regulations, as well as the 
new Regulation which is being proposed 
for adoption, make no provision for a final 
date by which the VAT own resources due 
as a result of corrections to the statement 
submitted by Member States are to be 
made available to the Community. 
In cases where corrections to statements 
require further additional resources to be 
made available the latter should be paid 
not later than the first working day of the 
August following the correction. 
In order to ensure the completeness and 
accuracy of VAT own resources, the 
Commission must be empowered to 
conduct such examinations as it considers 
necessary, to enable it to fulfil its Treaty 
obligations. 
See comment under Article 4 (5). 
No C 191/6 Official Journal of the European Communities 20. 7. 88 
This opinion was adopted by the Court of Auditors in its meeting of 16 June 1988. 
For the Court of Auditors 
Marcel MART 
President