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DOCUMENTS "COM"
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Vol.1974/0122

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COMMISSION OFTHEEUROPEAN COMMUNITIES
COM(74)795final
Brussels,26July1974
AMENDMENTS
totheproposalfora
SixthCouncilDirective
ontheharmonization oflegislation of
MemberStatesconcerningturnovertaxes
Commonsystemofvalueaddedtax:
Uniform "basisofassessment
(PresentedbytheCommissiontotheCouncilpursuanttothe
secondparagraphofArticle149oftheEECTreaty)
C0M(74)T95final

INTRODUCTION
On29June1973*"theCommissionsubmittedtotheCouncilaproposalfor
aSixthCouncilDirectiveontheharmonization oflegislation ofMember
Statesconcerningturnovertaxesandtheuniformbasisofassessmentof
valueaddedtax.
TheEconomicandSocialCommitteeandtheEuropeanParliament wereconsulted
onthisproposo.1andgavetheirOpinionson31January1974and14March
1974respectively .
Ithasbecomeclearthatacertainnumberofcorrections -andamendments
couldbemadetothetextoftheproposalforaSixthDirective,vjhere
thesedidnotalterthebasicpremisesandgeneralguidelinesalready
adoptedbytheCommissioninitsinitialproposal®

EXPLANATORY MEMORANDUM
AtArticle3
InaccordancewiththeOpinionoftheEuropeanParliament ,itseems
appropriatetoacceleratetheconsultation procedureprovidedforin
paragraph 2incaseswhereMemberStateswishtoderogatefromthegeneral
principlelaiddowninparagraph 1regardingterritorial scopeofthetax.
Tothisend,theCommissionproposesthatthetinelimitsofthreeandsix
monthsreferredtoinparagraph 2"bereducedtotwoandfourmonths
respectively.
AtArticle4
Paragraph 3
Paragraph3(c)defines "buildingland,thegeneraltaxationofwhichhas
beenparticularly controversial .TheEuropeanParliamenthasadoptedan
amendment'aimedatreducingthescopeofthisdefinitionbydeletingthe
lastindent("landotherthanasdefinedaboveonwhichtheperson
acquiringit,atthetimeofsuchacquisition ,undertakestoerecta
buildingwithinfouryears").
Buildingland,then,wouldonlyincludelandpreparedforconstruction or
landonwhichtherestandsanincompletebuildingorabuildingfor
demolition (firstindentof(c)).

-2-
Paragraph 4
TheEuropeanParliamentisopposedtoatime-limitbeingplacedon
MemberStates'optiontotreatasasingletaxableperson,personswho
arelegallyindependentbutareboundtooneanotherbyfinancial ,
economicaidorganisational relationships ("Organschaft "and"entity
fiscale").
Theproposednewtextofthesecondsubparagraph ofparagraph4takes
accountofthewishesoftheEuropeanParliament.However,inviewof
theimportanceofsuchgroupsoflegalpersons,itdidnotseemdesirable
thattheoptionprovidedforinthisparagraphbeexercisedbyMember
StateswithouttheCommunityauthorities beingabletogiveconsideration
totheconsequences ontheinternational level.Itisproposed,therefore,
thattheexerciseofthisoptionbesubjecttotheconditionthatthe
ValueAddedTaxCommitteebeconsulted.
Paragraph 5
Amoreprecisedefinitionofthecircumstances inwhichbodiesgoverned
bypubliclawmustbetreatedastaxablepersonshasbeenrequestedin
variousquarters.
Theproposednewtext,whilereferringbacktotransactions (production ,
trade,etc.)asdefinedinparagraph1ofthatArticle,specifiesthat
theymustbetransactions whichcouldbecarriedcutbypersonsgoverned
byprivatelaw:
(a)fromtheeconomicpointofview,and
(b)independently ofnationallegislation.
ThefirstconditionisintendedtoexcludethetreatmentoftheStateetc.,
asataxablepersonforeconomicactivitieswhichprivatefirmscouldnot
exercisewithoutusurpingthebasicfunctionsandpowersoftheStates
andotherbodiesgovernedbypubliclaw(generaladministration ,the
administration ofjustice,ornationalsecurityordefence).

-3-
Thesecond,conditionisintendedtoincludetheStateetc.,withinthe
scopeofthetaxinrespectofeconomicactivitieswhichprivatefirms
couldexercisewithoutusurpingthebasicfunctionsoftheState,but
whichinfacttheycannotexercisebecauseoftheexistenceinnational
legislation ofaprovisionreservingsuchexercisetotheState.
AtArticle5
Paragraph 2
Anewversionofthisparagraphisproposed.,deletingtheprovisionthat
leasingtransactions beconsideredassupplies.Thistreatment ,criticised
bytheEuropeanParliamentandbyotherbodies,doesinvolvecertain
practicaldifficulties ,forif,aftertheleasinghadbeentaxedasa
supply,theoptionwerenottakenup,anadjustmentofthetaxwouldhave
tobemade.Itthereforeseensmorepracticaltotaxtheleasingasa
letting,underArticle7(l)oftheproposal,andtotreatitasasupply
onlyifandwhentheoptionistakenup.
Paragraph 5
CertainMemberStateshaverequestedthatitbepossibleforsometrans­
actionswhicharenoteffectedwiththefinalconsumers,tobecarriedout
freeoftax.Thisisthecaseforforwardtransactions onthecommodity
marketormoregenerallysalesbyconnectedcontract,wheretheapplication
ofthegeneralrules(taxationateachstage,invoicing,etc.)could
involvemanycomplications .
Thissystem,whoseadoptionwouldbelefttoMemberStatestoapply,
introducesanelementofflexibilityintothegeneralprinciples ,without
therecoveryofthetaxatthefinalstageorthecollectionofown
resourcesbeingaffectedthereby.
AtArticle7
Paragraph 3
Itseemsnecessary,forreasonsofequalityoftaxation,toaddtothis
Article,intheformofanewparagraph,theprovisionmakingitpossible
toapplytosuppliesofservicestheruleinArticle5(4)(therightof
MemberStatestotreattherecipientofcertaintransfersofgoodsas
thesuccessortothebusinessandthepersonalityofthetransferor).The

-4-
rights which thesecond ,subparagraph ofArticle 7(l )classify assupply
ofservices could also bethe subject ofsuch transfers .
Paragraph /]
TheEuropean Parlianent desires that itshould continue tobepossible to
tax ,inexceptional cases ,services "rendered tooneself ",aswasprovided
for inthesecond subparagraph ofPoint 9 Annex AtotheSecond
Directive of11April 19&7 •Itisproposed therefore toaddanewpara­
graph toArticle 7»
This newprovision isaimed atintroducing agreater competitive equality
between suppliers ofservices incases wheire therisk ofprovoking
distortions ofcompetition isserious .
Inview oftheusewhich Member States could make ofthis provision it
seems desirable that cases where itisapplied should besubmitter tothe
VAT Comm i11ee.
AtArticle 10
Paragranh 3
Theaddition ofthis paragraph isproposed inorder toclarify therules
applicable tointernational supplies ofservices asreferred toin
Article 2(3).Since thetaxonsuch supplies ispayable bytherecipient ,
itappeared necessary todefine theplace inwhich thecharge toiaxarises
inthesame wayasthat fortaxable supplies ofservices onwhich thetax
ispayable attheplace ofthesuppliers .
AtArticle 11
ParaGraph 2
Theprovisions ofthethird subparagraph constitute exceptions tothose of
thesecond subparagraph which provides that thetaxistobecome cnargeable
atthetime ofthechargeable event' orwhen payments onaccount arc
received prior tothesupply ofgoods orservices .
With regard topayments onaccount ,subparagraph (b)asatpresent drafted
(theMember States may ,inrespect ofsupplies between taxable persons ,
provide that thetaxshall notbecome chargeable until thetime ofissue
oftheinvoice )isofnopractical effect ,since taxable persons are
obliged byArticle 23(3 )toissue invoices forpayments oilaccount .

–D–
Itisthereforeproposedtospecifythattheoptionofprovidingthatthe
taxshallnotbecomechargeable -untiltheinvoiceisissuedmayonlybe
exercisedinrespectoftransactions betweentaxablepersonswhichdonot
involvethemakingofpaymentsonaci-.onrfcbeforetherelevantsupplytakes
place.
Paragraph3
Inthecaseoftheimportation ofgoodswhichareplacedatthetineof
importationundertransit,bondedwarehouseortemporaryimportation
arrangements ;thefactthatthegoodshavecrossedthefrontierdoesnot
ofitselfmeanthatthelegalconditionsfortaxtobecomeduehavebeen
fulfilled,noristhedateonwhichtheycrossthefrontierthedate
referredtofordetermining therateapplicabletothechargeable
transaction .Thisiswhythecrossingofthefrontiercannotbetakenas
thechargeableevent.Article11(3),p:\rc.rraphs3andk,shouldtherefore
bomodifiedbjlinkingtogetherthechargeableeventandthe.timewhen
thetaxbecomesdue.
Moreoveritisproposedtoreplacethewords"freecirculation "bythe
words"homeuse",sinceitmustberememboredthat:
(1)"Freecirculation"issynonymouswith"librcpratique";
(2)Goods-in"freecirculation"arebydefinitionallproducts
originatinginMemberStates(Article9°f"theEECTreaty)and
productscomingfromthirdcountriesinrespectofwhichimport
formalities havebeencompliedwithandanycustomsdutiesoncharges
havingequivalenteffectwhicharepayablehavebeenleviedina
MemberState(Article10oftheTreaty).
ThismeansthatforCommunityproducts,orproductswhichhavebecomesuch
byvirtueofthepaymentofimportduties(CCTetc.)therewillnotbeany
applicationforfreecirculation ,asthoyarealreadyinfreecirculation ,
butadeclarationforhomeuse.Accordingly ,goodsofComiiunityorigin
which,uponimportation ,areplacedunderarrangement sofoneofthe
descriptions mentionedinthelastsubparagraph ofArticlell(3)are
releasedfromsucharrangements byLicansofadeclarationforhomeuse.

-6-
AtArticle12
Forvariousreasons,mainly01apracticalnature,itwasnotthought
expedienttoestablishapreciseparallelbetweentheconceptofthe
taxableamountwithinthecountryontheonehandandthatfor
importation ontheother,thoughanattemptwasmadetoreconcilethese
conceptswiththatofvalueforcustonspurposeswherethegoodsinvolved
aresubjecttocustomsduties.
A.Taxableamountwithintheterritoryofthecountry
Theoriginalversionofparagraphl(a)wouldhaveaddednothingintheway
ofclarification tothetextofArticle8(a)oftheSecondDirective.It
wouldhavemadeitverydifficultbesidestotakeintoaccountinthe
taxableamountanysubsidiespaid,forexample,bypublicorprivatefunds
toenableundertakings totransactcertainbusinessatreducedprices.
Moreover,itseemednecessarytorestricttogenuinelyexceptional cases
theapplication ofthe"openmarketvalue"criterion,asdefinedby
subparagraph (b)oftheoriginalversion,whichreferstoasupplyme.de
:,underconditionsoffaircompetition "whichisoftendifficultto
appraise.
Thisiswhytheconceptnowdefinedinsubparagraph (a),whichdealswith
"normal"suppliesofgoodsandservices,isbasedontheactual
consideration ,astandardwhichwasalreadyusedintheSecondDirective.
Thereforethetaxableamountmustincludenotonlyamountsofmoney
receivedorreceivablebutalsothevalueofanygoodsorservices
receivedorreceivable ,togetherwithanythingthatmaybegrantedtothe
supplierinrespectofthesupplyinquestionbyanypersonotherthan
therecipientofthesupply.
Inrespectofasupplybywayofanexchangeorsimilartransaction ,the
valueofeachsupplyconstitutes aconsideration fortheothersupply.
Asregardsconsideration grantedtothesupplierinrespectofthesupply
inquestionbyapersonotherthantherecipientofthesupply,thecase
ofsubsidiespaidbypublicauthorities mustbedealtwith.asfollows:

-7-
distinction mustbemadebetweensubsidespaidintheinterest01the
taxablepersonhimself(e.g.incentivesconnectedwiththerestructuring
:>fundertakings )andsubsidiespaidtothet'\::ablepersonintheinterests
ofpurchasers (e.g.measuresofsupportforfarmprices).Ontheone
hand,subsidiesofthefirstkind,whicharenotmadesubjecttothe
conditionthatareciprocalsupplyisprovided ,bythetaxableperson,do
notformpartofthetaxableamount.Ontheotherhand,subsidiesofthe
secondkindwhicharelinkedtosuppliesofgoodsorservices,mustbe
takenintoaccountinthetaxableamount.
Inparagraphl(b),whichconcernstaxableapplicationstoownuseand
othertransactions whicharedeemedtobesuppliesbyArticle5(3)butfor
whichobviouslythereisnoconsideration ,thenewtextlaysdownthe
samecriteria,xvhichwereincludedalreadyintheSecondDirective,
statingthatthepricesmustbecalculatedatthetimeofthesupply.It
isinfactmoreappropriate ,asnuchforpracticalasforpsychological
reasons,thatthetaxableamountshouldbetakentobethepurchaseprice
orcostprice,ratherthantheopenmarketvalue.
Thetextofsubparagraph (c)mustbedeletedsinceitisnolongerintended
totreat"leasing"operationsassuppliesofgoods.Inthiswaycertain
technicalcomplications willbeavoidedandtherevenuewillinnoway
sufferfrom"leasing"operationsbeingdividedintolettingandselling
transactions ."Openmarketvalue"thereforedoesnotapplytothesecases
nortoundeclaredtransactions .Thetaxableamountforthelatter
transactions shouldbedetermined bythesamecriteriaasthatfor
declaredtransactions.
Inthenewsubparagraph (c)itisprovidedthatfortransactions whichare
deemedtobesuppliesofservicesbyvirtueofArticle7(2)andforthose
referredtoinArticle7(4)>thetaxableamountistobethe"openmarket
value",whichisdefinedinsubparagraph (c).Thisisanancillary
criterionsince,inthecaseofthesetransactions thereisneithera
consideration ,norapurchasepricenoracostprice.

-8-
rrhooption under subparagraph (d)enables Member States inrespect of
t/;nplies ofbuildings asdefined therein ,toadopt ataxable anount for
vhich the criteria arewell suited tothetransactions inquestion and
which aretherefore easily applicable ,
.::.creference toland inthe original text was ineffective andtherefore
was deleted ,since land other than building land isthe subject ofa
general exemption under Article 14B(m).
Inpara-graph 3,thetext ofsubparagraph (e)hasbeen amended bywidening
thenotion ofintemcdio-ry activities .Under thenew text ,amounts paid
inthenane orfortheaccount ofthepurchaser etc.,arenot tobe
included inthe taxable anount .This amendment will enable this provision
tobeapplied more widely ,particularly where anintermediary ,forexample
atravel agency ,cannot strictly beregarded inlawasanagent .Thus
theproblem oftheelement offoreign taxation borne bysuch intermediaries
when they receive invoices from suppliers established inother countries
co .11beresolved bytheapplication ofthis provision .
Thenewparagraph 5wasadded totake account ofthefact that thetransfer
ofgoods which have been used forbusiness purposes byanon-exempt
undertaking isataxable supply totheextent that taxhasbeen deducted
.'.11respect ofsuch goods .Thenewprjvisior .under which thetaxable
amount istobereduced inproportion tothepercentage deduction
actually applied ,accordingly covers thecase where thegoods transferred
have been the object ofaproportional deduction .
^•Misce llaneous provisio ns
Thestatement intheoriginal text ofparagraph 2concerning therof&rencw
totheprocedure ofArticle 31lends itself toamisunderstanding ,as
according toArticle 31(2 )itisuptotheCommission toprepare adraft
ofthemeasures tobetaken .Itis,therefore -theCommission whomust
beconsulted forthepurpose ofapiying theprocedure laid down in
Ari :idP31•

-9-
AtArticle 13
Paragraph 1
Theanendnent tothis paragraph isaconsequent ialamendment following
that tothelast subparagraph ofArticle ll(3 )paragraphs 3and
The second subparagraph was added todeal with difficulties which nay -
arise should therate bealtered ,forexample ,during theconstruction of
abuilding .Itiscommon commercial practice forinterim payments tobe
made during the course ofconstruction ,and oneach ofsuch payments ,the
taxbecomes payable inaccordance with Article ll(2 ).
Paragraph 4
Itisproposed that anewprovision beadded tothis paragraph toensure
that ,asinthe case ofimports ofgoods ,thereceipt ofservices from a
foreign supplier ,asdefined byArticle 2(3),istreo-ted equally fortax
purposes ineach country .
AtArticle 14
A
Paragraph l(a)
Theexemption oftelecommunications services i:;the subject ofgeneral
criticism ,since firms arethereby prevented from deducting anyelement
ofinput tax included inthe charge sfortelephone andtelex services .
Thenew text cancels the exemption fortolecomrmnico /tions .
Paragraph l(k )
Theamendment tothe text ofthis subparagraph isdesigned ,toexclude from
exemption without exception the activities ofradio andtelevision
broadcasting organizations .
Paragraph l(l )
Theinclusion ofthis newhead ofexe-rption ,asrequested bytheEuropean
Parliament ,isaimed atenabling local government bodies toprocure works
ofconstruction free from VAT ,provided that theworks involved arenot of
aspeculative nature .

-10-
Β
Subparagraphs (b)and(c)
TheEuropeanParliamentdosirosthatexeuptionshouldbeextendedtocover
theundertaking ofcremationandorganizations whichhavethecareof
cemeteries andmonumentstovictimsofactsofviolence.
Subparagraphs (_f)and(h)
Thowords"sharesofinterest 1'wereaddedtosubparagraph (f)inthe
interestofmakingthetextmoreclearfromthepointcfviewof
guaranteeing coherencebetweenCommunitylanguagesandtoavoid
divergences ofinterpretation .
Itisalsoproposed,inaccordancewiththewishesoftheEuropean
Parliament ,thatexemptionundersubparagraphs (f)and(h)shouldnot
extendtosuppliesofservicesrelativetothetransactions concerned.
Adefinitionof"goldtobeusedascoin"hasbeenaddedtosubparagraph
(h),totheintentthatexemptionshouldbegrantedonlyforpurchases
ofsuchmetalbyauthorizedfinancialinstitutions .
Subparagraph (i)
Theobjectofthenewtextistoenablesalesoftaxmarksandstampsin
generaltobeexempted,.andnotmerelythespecialcaseoriginally
envisaged.
Subparagraph (1)
Thewordingoftheoriginaltextcouldgiverisetoconfusionasregards
taxablepersonswhocarryoutsuppliesasdescribedinArticle12A(l)(d);
thistextcouldbeinterpretedliter-allytomeanthatsuchtaxablepersons
wouldbeexemptifArticle12A(l)(d)didnotineffectapplytothem.
Itisproposedtospecifythattheexemptionwillapplyifthetaxable
vendorisnotinapositiontobenefitfromthearrangements providedfor
"dealersinbuildings".
Subparagraph (n)
Theabsenceofexemptionforcertainprofessional activitiescouldgive
risetoproblemsofsomedelicacy.Forthisreasonitisproposed ,that
suchactivitiesshouldbethesubjectofanewexemptionheading.Such

-11-
exemptionishoweversubjecttoacondition("wheretheyarenot
themselvesinvolvedinthepublishingorreproduction oftheirworks")
ofsuchakindastoavoidhavinganeffectonfinalconsumption .
Subparagraph (o)
Thisnewheadofexemptionisdesignedtoavoidrenderingrecourseto
justicemoreexpensive.
AtArticle16
A
Point7
ToachieveconsistencywithPoint4ofthesameArticle,itisproposed
thatthewords"inaccordancewithrulestobelaiddownbyeachMember
State"beaddedhere.
Point10(a)and(e)
TheEconomicandSocialCommitteehasrequestedadditionstothelistof
servicesinthisparagraph.Itisproposedthereforetoaddmanufacturing
processesandthesupplyofcomputerdata.
Point11
Thereplacement ofthewords"inthenameandfortheaccountofanother
person"bythewords"inthenameorfortheaccount"istoachieve
consistencywiththenewwordingofArticle12A(3)(e)»
Furthermore ,itappeareddesirabletohaveageneralsolution ybymeans
ofanexemptionwithrefundofinputtax,oftheproblemofintermediaries
(travelagencies,brokers,etc.)whotakepartintransactions whichare
concludedoutsidetheircountries.

-12-
Β
Asisproposed ,inthecaseofArticle5(5)and.forthesanereasons,it
appearedadvisabletoprovidehere,certainconditionsforexemptionto
"beextendedtosalescarriedoutatthestageprecedingtheexportation
ofthegoods:thisleadstothefiscalconsequences ofexportation
(exemptionandrefundofinputtax)arisingatastageatwhichitis
virtuallycertainthatthegoodsaredestinedforanoverseasmarket
(e.g.salestocustomaryexporters).
Article17
Inparagraph2,underthenewtextofsubparagraph (a),taxisdeductible
evenwhereaninvoiceisissuedbythesupplierbeforethegoodsare
actuallydeliveredortheperformance ofservicesisactuallycompleted.
Inparagraph 3?underthenewtextofsubparagraph (b)staxisdeductible
alsobysuppliersofserviceswhotakepartincertainimporttransactions .
InParagraph4?thenewtextlaysdownamaximumamountof50unitsof
account,sinceitmustnotbetoohigh,particularly forsmallunder­
takings,butontheotherhandaceilingrustbefixedtoavoid
applications beingmadeinrespectoftrivialsums.Theceilingset
takesaccountbothofthefinancialinterestsofthetaxablepersonand
oftheadditional workimposedasmuchonthelatterasonthetax
authorities .
Article18
Paragraph 2
Insubparagraph 3,thewords"shouldhave"havebeenreplacedbythewords
"couldhave"toavoidthepurchaserhavingtobeartheconsequences of
anynegligence onthepartofhissupplier.

-13-
Theproposedadditionalsubparagraph (4)isbywayofderogationfrom
thetimelimitimposedonthetaxablepersonforexercisingliisrightto
deductincaseswheretheadministration increasesthetaxableamount,
andisdesignedtoputthetaxablepersonandtheadministration onan
equalfooting.
Paragraph 3
TheproposedamendmentisinaccordancewiththewishesoftheEuropean
Parliament ,whichwasopposedtoMemberStatesbeingleftfree,inthe
caseofanexcessofdeductibletax,eithertorefunditortohaveit
carriedforwardtothenexttaxperiod.Thisoptionisretained ,inrespect
ofsmallamounts,whereaslargeramountsmustberefundedtotheperson
entitledasexpeditiously aspossible.Thisisamatterofsome
importanceforexportersandthoseinvolvedinseasonalwork.
Asaresultofthisamendment,thetextofthesecondsubparagraph becomes
superfluous .
Article19
Parograph 2
Theword"exempted"hasbeenaddedtotakeaccountofthefactthatsub-
paragraphs (f)and(h)ofArticle14Bapplyalsototaxabletransactions
(e.g.documentsoftitletogoods).
Referenceismadetosubparagraph (h)inadditiontosubparagraph (f)to
takeaccountofthefactthat;aswithdealingsinsecurities ,transactions
inmoney(forexampletgainsfromexchange)cannotbetakenasindicative
ofthetrueturnoveroftheundertaking .
Theadditionoftheword"incidental"attheendoftheparagraphis
intendedtomakethereferencetorealestateorfinancialtransactions
morespecific.
AtArticle21
Theoriginaltextofparagraph1(a)istoowidelydraftedsincetheagent
ofataxablepersonestablished inanothercountryisnotnecessarily in

-14-
apositionto.'oterminetheamountofthetaxduowherethetaxable
personhimselfcarriesoutoperationsinanothercountry,ofwhichhis
agentisnotinformed..Consequently ,itseemsappropriate toli~itthe
scopeofthetextinordertoavoidsystematicrecoursetoataxagent,
byspecifyingthatthisprovisiononlyappliestotheagentwherethe
taxabletransactioniscarriedoutthroughhinorwithhisassistance.
AtArticle23
Theadditionofasecondsubparagraphtoparagraph3(b)isdesignedto
facilitatetheissueofcertaininvoicesinastrictlylimitednumberof
cases.Thissimplification seensappropriate ,especiallyinviewofthe
factthatinvoicesforreducedamountsareoftenissuedforover-the-
countersalesinshopstoothertaxablepersons.
Thenewtextofparagraph4isdesignedtoavoidimposingontheMember
Statesexcessivelyrigidrequirements astotaxperiods.Thisoffers
considerable advantages fromtheadministrative and.controlpointofview
forboththemanagementofundertakings andthetaxauthorities ,or
allowsthoseadvantagestocontinue.
Inlinewiththisnewflexibility inthegeneralrules,paragraph 5of
theoriginalproposalisdeleted.
Inparagraph9jnowparagraph0,theadditionoftheobligationtoconsult
theVATCommitteeisintendedtoensureacertainuniformityinthe
application ofmeasureswhichtheMemberStatesadopt.
ThenewtextofthelastparagraphofArticle23isaimed,atpermitting
MemberStatestoreleasealsofromcertainobligations thosetaxable
personswhomakebothtaxableandexemptsupplies.
AtArticle24
Theadditionoftheprovisioninthethirdsubparagraph reflectstheParallel
treatmentfortheimportation ofgoodsandtheobtaininginonecountry
ofaservicesupplied -fromanothercountry.

-15-
AiArticle25
Paragraoh 2
AcorrectionismadeiotheFrenchiexiofthesecondsubparagraph
("actifimnobilis£"for"aciifimmobilier").
Theword"exempt"hasbeeninsertedbefore"transactions "fortheseme
reasonsasthosesetoutinthisexplanatory memorandumconcerningthe
firstsubparagraph ofArticle19.
Paragraph 3
Theoriginalversionofthisparagraphwouldexcludefromexemptionor
reliefsmall-scalecraftsmeninthebuildingtrade(e.g.painters).For
thisreason,itisproposedthaiitbespecifiedthat,foractivities
connectedwithbuilding,onlysuppliesofbuildingsorofbuildingland
shouldbeexcludedfromthespecialschemeforsmallundertakings .
Moreover,sincetheEuropeanParliamenthaspointedoutthatthe
exemptioncouldbemaintainedfortaxablepersonsconcernedonlywith
thelettingofbuildings,asecondsubparagraph isproposedwhichtakes
accountofthiswish.
AiArticle26
Parngraph 1
AttherequestoftheEuropeanParliament ,thespecialschemeforsecond-
handgoodsisextendediooriginalworksofarte»ndantiquesand
collectors' items.
AiArticle27
TheamendmentsofthedatesappearinginthisArticlecorrespondiothe
revisedtextofArticle1.
AiArticle28

-6-
ThechangesinthedatesinthisArticlecorrespond ,totherevisedtext
inArticle1.
AtArticle30
Thesechangescorrespondtothenowcr.scsinwhichconsultations are
obligatory.
AtArticles32.33and3"3
ThenewdatesgiveninthoseArticlesaretocorrespondwiththerevised
textinArticle1.
TheproposedadditionstoArticles32and33rvretotakeaccountofthe
wishesoftheEuropeanParliament.

AIMTO-ENTS TOTHEPROPOSAL FORASIXTHCOUNCILDIRECTIVE
ONTHEHARMONIZATION OFMEI'IBERSTATESCONCERNING TURNOVER TAXES
TitleI:Introductory provisions
Article3
Thetextofthesecond,subparagraph ofthisArticleisamendeds.sfollows:
'"Theyshalladoptthenecessarylaws,regulations andadministrative
provisionssothatthesystemasmodifiedmayenterintofortewithout
delayandrotlr.t<:rthan
TitleII:FieldofApplication
Article2
(unchanged)
TitleIII:Territory
Article3
Thetextofthefirsttwosubparagraphs ofparagraph 2ofthisArticleis
attendedasfollows:
"2.AMemberStatewhich,atthedateofthisDirective,doesnotapplyin
tototheprinciplelaiddownbyparagraph 1andproposestocontinuethus
shallsoinformtheCommission notlaterthantwomonthsafterthedate
ofthisDirective .
TheCommission Biay,withinfourmonthsfollowingreceiptofsuchinfor­
mation,consulttheMemberStatesontheeffectsofthisrequest,in
particular onthefairnessofcompetition andontheCommunity'sown
resources ;itshallsubmitproposalstotheCouncilwhich,actingbya
qualifiedmajority,shalldecidethereonwithinfourmonths."

-2-
TitleIV:Taxablepersons
Article4
-Shetextofthesecondindentofparagraph3(c)ofthisArticleisdeleted.
-Thetextofthesecondsubparagraph ofparagraph4ofthi^Articleis
amendedasfollows :
"Subjecttotheconsultations providedforinArticle30,eachMember
Statemaytreatasasingletaxableperson,personsestablishedinits
nationalterritory whoarelegallyindependent butareboundtoone
anotherbyfinancial,economican(jorganizational relationships."
-Thetextofthesecondsubparagraph ofparagraph 5ofthisArticleis
amendedasfollows :
"However,wheretheycarryouttransactions coveredbyparagraph 1which,
fromtheeconomicpointofview,andindependently ofnationallegislation ,
wouldbelikelytobecarriedoutbypersonsgovernedbyprivatelaw,they
shallbeconsideredtobetaxablepersonsinrespectofsuchtransactions .
Thisprovisionextendstotheactivitiesofbroadcasting authorities ,ana
oftheagricultural intervention agenciesinrespectofdealingsin
agricultural productsinpursuanceofaRegulation onthecommonorgani­
zationofthemarlcetintherelevantproduct."
TitleV:Taxabletransactions
Article5
Supplyofgoods
-Thetextofparagraph2(b)ofthi^Articleisdeleted,andaccordingly :
(c)becomes(b);
(d)becomes(c);
(e)becomes(d);
(f)becomes(e);
(g)becomes(f).

-3-
Article5(cont.)
-Thefollowingparagraph 5ieadded,tothisArticle:
"5.Forwardtransactions maybetreatedbyMemberStatesasiftherewore
asinglesupplyfromthefirstsellertothelastbuyer."
Article6
dorksofConstruction
(unchanged)
Article7
SupplyofServices
-Thefollowingparagraphs 3and4areaddedtothisArticle :
!'3.TheprovisionsofArticle5(4)shallapplyinlikemannerwithrespect
tothesupplyofservices."
"4-Inordertopreventseriousdistortionofcompetition ,MemberStates
may,subjecttotheconsulta/fcionsprovidedforinArticle30,treat
asasupplyofservicesthecarryingoutbyataxablepersonofa
servicewithinhisownundertaking ,wherethevalueaddedtaxonsuch
aservice,haditbeencarriedoutbyanothertaxableperson,would
notbewhollydeductible."
Article3
Imports
(unchanged)
TitleVI:Placeoftaxabletransactions
Article9
SupplyofGoods
(unchanged)

-4-
Article10
Supplvofservices
-Thefollowingparagraph 3isadded,tothisArticle :
"3.Forthepurposesofchargingtaxonthesuppliesreferredtoin
Article2(3)theplacewheretheserviceisreceivedshallbodeemed
tobetheplacewherethebusinessofthepersonreceivingtheservi.ee
isestablished or,intheabsenceofsuchapl-.ee,theplacewherehe
hashispermanentaddress."
TitleVII:Chargeableeve^tandthechargetotax
Article11
-Thetextof(b)inthethirdsubparagraphofparagraph2ofthisArticle
isamendedasfollows :
"(b)inrespectofsuppliesreferredtointhefirstsubparagraphof
Article23(3)(a),thetimeofissueoftheinvoice."
-ThetextofthetMrtlsubparagraph ofparagraph 3ofthisArticleis
amendedasfollows :
"However,wheregoodsaresubject,onimportation ,totheCommonCustoms
Tariffduties,toagricultural leviesortochargeshavingequivalent
effect,thechargeableeventshalloccur -andthetaxshallbecomecharge­
ableatthesameassuchcommonduties,chargesandlevies."
-Thetextofthelastsubparagraph ofparagraph 3ofthisArticleis
amendedasfollovrs :
"Whereonimportation goodsareplacedunderatransit,bondedwarehouse
ortemporaryimportation'arrangementundercustomsand/orfiscalsuper­
vision,withsuspensionofcustomsduties -and/ortaxes,IlemberStates
mayprovidethatthechargeableeventshalloccurandthetaxshall
becomechargeableonlywhenthegood.saredeclaredforhomeuse."

-5-
Title'Till:Taxableamount
Article12
A.Withintheterritory01thecountry
-Thetextofparagraph 1(a),(b),(c)-and.(d)ofSectionAofthisArticle
isamendedasfollcriais:
"(a)inrespectofsuppliesofgoodsandservices,otherthanthose
referredtoin(b),(c)and(d)below,everythingwhichconstitutes
theconsideration whichhasbeenoristobeobtainedbythesupplier
inrespectofsuchsupplies;
(b)inrespectofsuppliesunderArticle5(3)»thepurchasepriceofthe
goodsorofsimilargoodsor,intheabsenceofapurchaseprice,
thecostprice,calculatedatthetimeofsupply;
(c)inresijectofsuppliesunderArticle7(2)and(4)»the"openmarket
value"ofthesubjectoftherelevantsupply.
"Openmarketva,lue"ofservicesmeanstheamountwhichacustomer
atthemarketingstageatwhichthesupplytakesplacewouldhave
top-ytoasupplieratarm'slengthwithintheterritoryofthe
countryatthetimeofthesupply,underconditionsoffaircom­
petition,toobtaintheservicesinquestion;
(d)inrespectofsuppliesofbuildings,otherthanasreferredtoin
Article4(3)(b),purchasedforthepurposeofresalebyataxable
persontoanon-taxable personortoataxablepersonforwhomthe
valueaddedtaxonthebuildinginquestionisnotdeductible ,the
taxableamountmaybethedifference "betweenthesellingpriceand
thepurchaseprice."
-ThetextofSectionA,paragraph3(e)ofthisArticleisamendedas
follows:
"(e)amountspaidinthenameorforaccountofthecustomerandcredited
inthesupplier'sbookstoasuspenseaccount."

-6-
Article12(cont.)
-Theiollowmgparagraph 5i£addedtoSectionAO±thisArticle:
"5°Wherethesupplyisofgoodsforwhichtaxisonlypartiallydeductible
inaccordancewithArticle17(5)>"thet?,xableamountshallboreduced
inproportiontothepercentagedeductionactuallyappliedtothe
goodsinquestion."
B.Importation ofgoods
-The*textofSection3,paragraph1(a)ofthisArticleisamendedasfollows:
"(a)thepricepaidortobepaidbytheimporter,wherethispriceisthe
soleconsideration forimportation ;
C.Miscellaneous provisions
-Thetextofparagraph 2oftheseMiscellaneous Provisionsisamendedas
follows:
:,2.WhereaMemberSt?.teproposestomaintainorintroducestandardor
minimumratesforcertaintransactions inordertopreventfraudor
tosii.iplif ,rthecalculation .ndcollectionofthetax,itshall
consult-theCotuaissionforthepurposeofapplyingtheprocedurelaid
downinArticle31."
TitleIX•Rates
Article13
-Thetextofthefirstsubparagraph ofparagraph 1ofthisArticleis
amendedasfollows :
"1,Therateapplic?_bletotaxabletransactions shallbethatinforceat
thetimeofthechargeable ev'ont.However,inthecasesprovidedfor
inthelastsubparagraphofArticle11(3),therateapplicableshall
bethatinforceatthetimewhenapplicationisraadeforthegoods
tobereleasedforhomeuse."
–TIUJi'o]lowing-&ubj>..u%ngi*aphisaddedto;:r,ragraph 1ofthisArticle:

-7-
Article13(cont.)
"Vflieretherateischanged,andsubjecttotheconsultations providedlor
inArticle30,liemberStatesmaytaketransitional measuresparticularly
inrespectofcertaintransactionsstillbeingcarriedout."
-Thefollowingsubparagraphisaddedtoparagraph4ofthisArticle:
"Thesaneprovisionshallapplyinrespectofthesupplyoftheservices
referredtoinArticle2(3)withintheterritoryofthecountry."
TitleX:Exemptions
Article14
Exemptionswithintheterritoryofthecountry
A.Exemptions forcertainactivitiesinthepublicinterest
-Thetextofparagraph 1(a)ofSectionAofthisArticleisamendedas
follows:
"(a)thesupplyofservices,otherthanpassengertransportandtele­
communications ,andsuppliesofgoodsincidentalthereto,bypublic
postalservices;"
-Thetextofparagraphl(lc)ofSectionAofthisArticleisamendedas
folioi/s:
"(k)thesupplyofservicesbytheatres,cinoma-clubs ,concert-halls ,
museums,libraries,publicpark~,botanicalorzoologicalgardens,
educational exhibitions ,andoperationsotherthrjnthoseofradio
ortelevisionorganizations ,withinthefrraeworkofactivitiesin
thepublicinterestofasocial,culturaloreducrtionalnature,by:
-bodiesgovernedbypubliclaw*or
-non-profit-makingorganisations ;or
-privatecharitableorganizations ."
-Thefollowingsubparagraph (l)isaddedtoparagraph 1ofSectionAof
thisArticle:
"(l)worksreferredtoinArticle6whoretheyarccarriedoutbyoron
behalfoflocalgovernmentbodiesandwheretheyarcnotdestined
forresale,notincludedinthepriceoftheland,andar.jnotlot

-8-
"butorepl?.cedfreeofdugoatthedispos-J.oftheusers."
B.OtherExemptions
-Thetextofsubparagraphs (b),(c),(f),(h),(i),(l)ofSectionBof
thiiiArticleisattendedasfolio/s:
"(b)thesupplyofservicesbyundertakersandcrematorsanasuppliesof
goodsincidentalthereto;
(c)suppliesofgoodsandservicestoorganisations responsiblefor
constructing ,installing andmaintaining cemeteries ,graves?jid
monujuentscommemorating wardeadandvictimsofactsofviolence;
(f)dealingsindebts,shares,sharesofinterest,debenturesandother
securities ,excludingalldocumentsestablishingtitletogoodsand
allrights,interestsandsharescoveredbyArticle5(0(s-)arui(b)
Thisexemptionshallnotcoversuppliesofservicesrelativeto
suchtransactions ;
(h)dealingsincurrencyotherthanascollector'sitems,andingold
tobeusedascoin,andincredittransfersanddeposits;goldto
beused .ascoinmeansgoldofastandardofatleast900/1000,for
authorizedfinancialinstitutions ;Thisexemptionshallnotcover
suppliesofservicesrelativetosuchtransactions ;
(i)suppliesbystatesandlocalgovernmentbodiesoftaxmarks,discs,
bandsorstaraps;
(l)suppliesofbuildingsorpartsthereofandofthelandpertaining
thereto,afterfirstoccupation ,byataxablepersonforwhomthe
valueaddedtaxonthebuildingisnotdeductible andtowhom
Article12A(l)(d)isrotapplicable.Forthepurposesofthis
exemptionflat-ratefarmers,asdefinedinArticle27,shallbe
deemedtobetaxablepersonssubjecttothenormalscheme;
-Thefollowingsubparagraphs (n)and(o)areaddedtoSectionBofthi.^
Article :
"(n)suppliesofservicesbyauthors,writers,composers,lecturers,
journalists ,actors,musicians,wherethey .arenotthemselves
involvedinthepublishingorreproduction oftheirworks;

-9-
"(o)suppliesofservices "bymembersofthelegalandjudicialprofessions ,
wheretheseservicesareinconnectionwiththeadministration of
Justice."
Article15
Exemptionsofimportedgoods
(unchanged)
Article16
Exemptionsofexportsandliketransactions andinter­
nationaltr?>nsport
-TheletterAis?„ddedbeforethephrase:
"TheMemberStates,shall,subjecttotheconditions..."
-Thetextofpoint3ofthisArticleisamendedasfollows:
"(3)Goodsconsignedortransported "fc°abon(je^warehouseundercustoms
and(or)fiscalcontrol,ordeliverieswithinsuchwarehouse'"
-Thetextofpoint7ofthisArticleisamendedasfelloe's:
"(7)Goodsforthefuellinganaprovisioningofaircraftasreferredtoin
point6,inaccordancewithrulestobelaiddownbyeachMember
State;"
-Thetextofpoint10(b)and(e)ofthisArticleisamendedasfollows:
"(a)Aan-iorientsofpatents,manufacturing processes,trademarksand
likerightsandthegrantingoflicences;
(e)Servicesofconsultants,engineersandplanningofficesandt
similrxservicesandthesupplyofcomputerdata;"
-Thetextofpoint11ofthisArticleisamendedasfolio.:s:
"Servicessuppliedbybrokersandotherintermediaries ,actinginthe
nameorforaccountofanotherperson,wherethej''formpartoftrans­
actionsspecifiedinthisArticle,oroftransactions whicharecarried
outoxitsidetheirnationalterritoryandotherusualservicesdirectly
relatingtoexportationasdefinedinpoints1,2and3;"

-10-
-Thetextofpoint1.3(b)ofthisArticleisamendedasfollows:
,;(b)Thetransportofgoodswhich-re"beingcarriedto-doatin?vtion
ojrtsidenationalterritoryortoabondedwarehouseundercustomsand/or
fiscalcontrolorintransit;"
-ThefollowingJection3isaddedtothisArticle:
'•'B.IlemberStatesmo.y,subjecttotheconsultations providedforin
Article30,exemptsuppliesofgoodstoataxablepersonifsuch
goodscvrotobeexported,processedorunprocessed ,providedth\t
duringthepreviousyearthetaxablepersonhsexportedatleast
50.,jofhisturnover."
TitleXI:Deductions
Article17
Jxitvtqnceandscopeofjtnerignttodj3duct
-Thetextofparagraph2(a)ofthisArticleisamendedasfollows:
;!(a)ValueaddedtaxinvoicedtohiminaccordancewithArticle23(3)in
respectofgoodsorofservicessuppliedortobesuppliedtohim­
-Thetextofpara-graph3(b)ofthisArticleisamendedasfoliois:
"(b)ofoccupationswhichaxeexemptunderArticles15(2),(?):JitL(11)
andArticle16."
-Thetextofthesecondsubparagraph ofparagraph4ofthisArticleis
amendedasfollows :
wTherefundsha.llbemadeuponapplication fromthetaxableperson.IIo
applicationshallbeu.-jdeinrespectofanomountoftaxlo'.orthan
50unitsofaccount,butseveralinvoices,providedtheyarcissued
duringthesraecalendsyear,maytogetherformthesubjectofasingle
application .::

-11-
Articie1o
Rulesforexercisingtherighttodeduct
-Thetextofthethirdsubparagraph ofparagraph 2ofthisArticleis
emendedasfollows:
"Wherebyerrororomissionthetaxablepersondoesnotmakethededuction
attherighttime,hemayexercisehisrighttodeductatanytimeupto
andincluding 31Decemberoftheyearfollowingthatinwhichthede­
ductioncouldhavebeenmadeinaccordancewiththefirstsubparagraph .
Thedeductionshallinsuchcasebemad.einaccordancewiththeprovisions
inforceatthetimewhenthedeductionshouldhavebeenmade.Itmay
beexercisedwhenthereturnprovidedforinArticle23(7)ismade."
-Thefollowingfourthsubparagraph isaddedtoparagraph 2ofthisArticle:
"Notwithstanding theprovisionsoftheprecedingsubparagraph ,the
taxablepersonisentitledtohavetakenintoaccountdeductionswhich
hewasnotabletom-Jcevalidly,wherethetaxableamountissubsequently
increased ."
-Thetextofthefirstsubparagraph ofparagraph 3ofthisArticleis
amendedasfolio.-s:
"Whereforagiventaxperiod,theaxiountofauthoriseddeductions
exceedstheamountoftaxduetheexcessshallberefundedassoonas
possible,butnotlaterthanonemonthaftertheperiodicreturnis
made.Wheretheamountconcernedislessthan10unitsofaccount
MemberStatesmay,insteadofmakingarefund,carrytheexcessforward
tothefollowingperiod."
-Thetextofthesecond,subparagraph ofparagraph 3ofthisArticleis
deleted.
Article19
Calculation ofthedeductibleproportion
–Thetextofparagraph 2ofthisArticleisamendedasfollows:
"2.Bywayofderogation fromparagraph 1,thereshallbeexcludedfrom
thecalculation ofthedeductibleproportion ,amountsofturnover
attributable to-exempttransactionsspecifiedinArticle14B(f)and

-12-
Article19(cont.)
(h),tothesaleofcapitalgoodsusedbythetaxablepersonforthe
purposesofhisbusiness,andtoincident.1realestateorfinancial
transactions ,exceptwheretheseincidentaloperations formpartofj.
-regularhusinoBPaotdvitybythetaxableperson.
Article20
Ad.-justnert 01deduction,J
(unchanged)
TitleXII:Personsliableforpaymentoftax
Article21
Personsliabletopaytaxtothetaxauthority
-Thetextofparagraph1(a)ofthisArticleisariendedasfollows:
,:(a)taxablepersonswhocarryouttaxabletransactions ,andagentsof
taxablepersonsestablishedinanothercountrywhocarryouttax-able
transactions ,providedthatthetaxabletransactions arccarriedout
throughorwiththecollaboration ofsuchagents.11
TitleXIII:Assessmentoftheamountoftaxtobepaidandliabilityfor
paymentofthetax
Article22
(unchanged)
TitleXIV:Obligations ofpersonsliableforpayraent
Article2■>
Obligations undertheinternalsystem
-Thetextofparagraph3(b)ofthisArticleisamendedasfollows:
"(b)Theinvoiceshallstateclearlythepriceexclusiveoftaxandthe
corresponding taxateachrateaswellasanyexemptions .
However,inrespectofinvoicesforatotalamount,includingtax,
nogreaterthan20units:'of'.account,thet&xablepersonniaysimply
statethetotalawount,includingthetax,theapplicablerateor
anyexemptions .11

-13-
Article23(cont)
--Thetextofparagraph4ofthisArticleisamendedaslollows:
"Everytaxablepersonshallsubmitareturnwithinonemonthaftertheend
ofeachtaxperiod.ThisperiodshallbefixedbyMemberStatesasamonth,twom-a?
oraquarteror,inexceptional case",ahalf-yearorayear.Thisreturn
mustsetoutalltheinformation requiredtocalculatethet?.xtobepaid
andthedeductionstobemade,includingthetotalamountofthesupplies
relevanttosuchtaxandthetotalamountofexemptedsupplies."
-Thetextofparagraph 5ofthisArticleisdeleted,andaccordingly :
paragraph5beconesparagraph5;
paragraph7beconesparagraph6:
paragraph3becomesparagraph7:
paragraph9becomesparagraph8andthetextthereofisamendedasfollows:
"3.Subjecttotheconsultations providedforinArticle30,HenbcrStates
maywherenecessaryimposeotherobligations shouldthisprovenecessary
forthecollectionofthetaxorthepreventionoffraud"
paragraph 10becomesparagraph9andthetextthereofisamendedasfollows:
"9.MemberStatesmayreleasetaxablepersonsfromcertainobligations
arisingoutofexemptsupplies."
Article24
Obligations inrespectofimoorts
-Thefollowingthird,subparagraphisaddedtothisArticle:
"TheprovisionsofthisArticlemayalsoapplytothesupplyofservices
referredtoinArticle2(3)«"
TitleXV:Specialschemes
Article2^
Specialschemesforsmallundertakings
-Thetextofthesecondsubparagraph ofparagraph 2ofthisArticleis
amendedasfollows:

-4-
Article25(cont.)
"However,uisposalsoftangibleorintangibleinvestmentpropertywhich
formedpartofthefixedassetsoftheundcrt..king,suppliesofbuildings
andofbuildingland,theexempttransactionsspecifiedinArticle14B(d)
and(f)andthelettingofbuildingsshallbedisregrardedincalculating
theturnover."
-Thetextofparagraph 3ofthisArticleisamendedasfollows:
"Paragraph1(a)shallnotapplytothetransactionsspecifiedinArticle
4(3)(b)and(c),nortothetransactionsspecifiedinthesecondsub­
paragraphofparo.graph 2ofthisArticle.
However,ataxablepersonwhomokestheappropriateapplication mayenjoy
theexemptionprovidedforinparagraph1(a),providedthathoisliable
forvalueaddedtaxonlyinrespectofthelettingofbuildings."
Article26
Specialschemeforsecond-hand goods
-Thetextofparagraph 1ofthisArticleisamendedasfollows:
"1.''Second-hand goods"meansusedmoveablepropertywhichcanbere-used
asitisorafterrepair.However,thearrangements providedforin
thisArticleshallapplyalsotooriginalworksofartcreatedbythe
handoftheartist,antiques,collectors 1items,andstampsandcoins
beingcollectors 'items."
Article27
Commonflat-rate schemeforfarmers
-Thetextofthethirdsubparagraph ofparagraph 3ofthisArticleisamended
asfollows :
"Thelevelsofinputchargesocalculated ,roundeddowntothenearest
tenthofonepercent,shallbesofixedinaccordancewiththeprocedure
laiddowninArticle31thattheymaybeadopted:

-15-
Article27(cont)
(i)forthefirsttime,notlaterthan30Septemberofthesecondyear
followingthatoftheadoptionofthinDirective ;
(ii)foreachthree-yearlyupdating:notlaterthan30Septemberofthe
thirdyear;
(iii)inthecaseofchangeslikelytoaffectthelevelofthecharge,as
soonaspossible.
-Thetextofthefourthsubparagraph ofparagraph 3ofthisArticleis
amendedasfollows :
"Member-Statesshi,llsupplytheCommissioniviththemacro-economic statistics
andotherdatarequiredforthecommonmethodofcalculation :
(i)forthefirsttime,notlaterthan30Mayofthesecondyearfollowing
thatoftheadoptionofthisDirective ;
(ii)foreachthree-yearlyupdating,notlaterthan30Juneofthethird
year;
(iii)inthecaseofchangeslikelytoaffectthelevelofthecharge,as
soonaspossible.
TitleXVI:Trcjisitional provisions
Article26
-J.hacooctofparagraph 1ofthisArticleisamendedasfollows:
Theexemptionunderarticle1bApoint13(c-)^-rapplicableuntiltheexpirationoftheperiodofthreeyearsfollowing da-te
ofadoptionofthepresentDirective.TheCommiesionshallindue
couraepresenttotheCouncilproposalsconcerningthetaxscheme
tobeappliedattheexpirationoftheaboveperiodtointernational
passengertransportbyseaorair."
-Thetextofthefirstsubparagraph ofparagraph2ofthisArticleisamended
asfollows:
"AnyprovisionsbroughtintoforcebytheMemberStatesinexerciseofthe
rightsconferredonthembyArticle17oftheSecondCouncilDirective

-16-
Article28(cont)
No.67/228/3ECof11April1967shallceasetoapply,ineachMemberState,
witheffectfromthedateonwhichtheprovisionsreferredtointhe
secondsubparagraph ofArticle 1ofthisDirectivecomeintoforce."
-Thetextofparagraph 3ofthisArticleisamendedasfolio/s:
"3.MemberStateswhichavailthemselvesoftheprovisionsofthesecond
subparagraph ofparagraph 2shallsupplytotheCommissioninevery
twoyecars,andforthefirsttimewithinsixmonthsafterthedateof
adoptionofthisDirective,withsuchinformation ,-a6willenableit
todoteruinewhetherthegroundsonwhichtheexemptionsreferredto
inthatsubparagraph havebeenmaintainedinforcestillobtain.
TheCommission sh?„lltakesuchinformation intoaccountinthereports
providedforinArticle32andwillmakeproposalsinsuchreports
fortheadaptation bystagesoftheabovenentioned exemptionstothe
obligationsresultingfromtheachievement ofjlconomicandMonetary
Union."
TitleXVII:ValueAddedTaxCommittee
Article29
(unchanged)
Article30
-ThetextoithisArticleisamendedasfollows :
"Inadditiontotheconsultations madecompulsory byArticles4»7,13,16,
23,25and27,theCommittee mo,yexamineanyquestionrelatingtothe
applicationofanyCommunityactconcerningthevalueaddedtax,raised
b,ytheChairmaneitheronhisowninitiativeorattherequestofthe
representative ofaMemberState."
Article31
(unchanged)

-17-
TitleXVIII:Miscellaneous provisions
Article32
-ThetextofthisArticleisamendedasfollows :
"Forthefirsttimeon1January0fthefourthyearfollowingthatinwhich
thisDirectiveisadoptetaidthereaftoreverytwoyears,theCommission
shall,afterconsultingtheMemberStates,sendtheCouncilareportonthe
applicationofthecommonValueAddedTaxsystemintheMemberStates.
Thisreportshallbetransmitted fcytheCounciltotheEuropeanParliament."
Article33
-ThetextofthisArticleisamendedasfollows:
"Attheappropriate timetheCouncilactingonaproposalfromtheCommission ,
afterreceivingtheOpinionoftheEuropeanParliament ,andinaccordance
withtheinterestsofthecommonmarket,shalladoptfurtherDirectives on
thecommonvalueaddedtaxsystem,inparticulartorestrictprogressively
ortorepealmeasurestokenbytheMemberStatesbywayofderogation from
thesystem,inordertoachievecompleteparallelism ofthenationalvalue
addedtaxsystemsandthuspermittheattainmentoftheobjectivestated
inArticle4oftheFirstDirective."
Article _i4
(unchanged)
Article35
-TnetextofthuArticleisamendedasfollows:
"TheSecondCouncilDirective,Wo.67/223/SSCof11April1967shallceaseto
haveeffect^ineachMemberState, fromthedateofentryinto
forceoftheprovisionsreferredtointhesecondsubparagraph ofArticle 1
ofthisDirective."
Article36
(unchanged)

ANNEXA
(unchanged)
ANNEXB
(unchanged)
ANNEXC
(unchanged)