COMMISSION OF THE EUROPEAN COMMUNITIES 
COM(94) 506 final 
Brussels, 18.11.1994 
Proposal for a 
COUNCIL DECISION 
Authorising the Federal Republic of Germany and the Grand Duchy of Luxembourg to 
apply a measure derogating from Article 3 of the Sixth Council Directive 77/388/EEC of 
17 May 1977 on the harmonisation of the laws of the Member States relating to turnover 
taxes. 
(presented by the Commission) 
EXPLANATORY MEMORANDUM 
By letters received by the General Secretariat of the Commission on 4 July 1994 and 17 
August 1994 respectively, the German and Luxembourg Governments submitted requests 
for an authorisation based on Article 27(1) of the Sixth Council Directive of 17 May 1977 
on the harmonization of the laws of the Member States relating to turnover taxes1. The 
special measure which is the object of the present Decision derogates from Article 3 of the 
Sixth VAT Directive, which determines the territorial application of the common VAT 
system. The justification for this authorisation is in order to simplify the procedures for 
charging value added tax. 
In accordance with Article 27(3) of the Sixth VAT Directive, thé Commission informed 
the other Member States, by letter dated 16 September 1994, of the requests submitted by 
the German and Luxembourg Governments. 
The special measure requested by the Federal Republic of Germany and the Grand Duchy 
of Luxembourg concerns the building of a motorway bridge over the river Moselle to the 
north of Perl and Schengen linking the German A8 motorway from Saarbriicken to the 
west with the Luxembourg A13 motorway from the Dudelange motorway junction to the 
east. 
The bridge is located partly on the sovereign territory of the Federal Republic of Germany 
and the Grand Duchy of Luxembourg, but also partly over the river Moselle, which, as the 
frontier between the two countries, is the joint territory of both. 
Under the principle of territoriality laid down by Articled of the Sixth VAT Directive, 
German value added tax would be applied to the construction work carried out on 
German territory, and work carried out on Luxembourg territory would be subject to 
Luxembourg taxation. However, it would not be clear how the work carried out between 
the two Member States would be taxed. Without a simplification of the taxation 
arrangements the firms involved in constructing the bridge would be faced with a 
considerable problem. For every single supply of goods and services involved in building 
the bridge it would have to be established whether it occurred on German or Luxembourg 
territory or on the joint territory. Single transactions covering both sovereign territories 
and the joint territory would have to be apportioned. 
In order to simplify the practical arrangements for the carrying out of the construction 
project and to ensure that goods and services supplied on the joint territory are taxed, it 
has been agreed between the German and Luxembourg authorities that, subject to 
authorisation of the present measure by the Council, taxation of the construction work 
will be subject to value added tax in the Grand Duchy of Luxembourg alone. The same 
problem also arises in respect of the maintenance of the bridge once delivery of it has 
taken place. Consequently, maintenance - unlike construction - will be subject to value 
added tax in the Federal Republic of Germany. 
1 OJ N° L 145, 13.6.1977, p. 1. Directive as last amended by Directive 94/5/EC (OJ N° L 
60, 3.3.94, p. 16). 
A 
Article 27(1) of the Sixth VAT Directive provides for the introduction of special measures 
derogating from the provisions of the Directive in order to simplify the procedure for 
charging the tax. As explained, the proposed arrangements serve the purpose of 
simplification. 
Since, under the proposed arrangements, the entire construction of the bridge would be 
subject to value added tax in the Grand Duchy of Luxembourg and its maintenance 
subject to value added tax in the Federal Republic of Germany, the amount of tax due at 
the final consumption stage is not affected. Consequently, there is no adverse impact on 
the Community's VAT own resources. 
It should be noted that by Decision 83/333/EEC of 18 March 19832, the Council 
authorised a similar derogation to Article 3, on the basis of Article 27(1), for the purpose 
of constructing a bridge over the river Sûre between the same two Member States. 
The Commission is convinced that the derogation in question, provided that it is restricted 
to the construction and maintenance of the frontier bridge over the river Moselle specified 
above, is intended to be a simplification measure within the meaning of Article 27(1) of 
the Sixth VAT Directive. 
The Commission therefore considers it appropriate for the Federal Republic of Germany 
and the Grand Duchy of Luxembourg to be authorised to apply the planned special 
measure. 
2 Decision deemed to have been adopted, in accordance with Article 27(4) of the Sixth 
Council Directive 77/388/EEC on turnover taxes (OJ L 181 of 6.7.83, p. 25) 
Proposal for a 
COUNCIL DECISION 
Authorising the Federal Republic of Germany and the Grand Duchy of Luxembourg to 
apply a measure derogating from Article 3 of the Sixth Council Directive 77/388/EEC of 
17 May 1977 on the harmonisation of the laws of the Member States relating to turnover 
taxes. 
(presented by the Commission) 
THE COUNCIL OF THE EUROPEAN UNION, 
Having regard to the Treaty establishing the European Community, 
Having regard to the Sixth Council Directive 77/388/EEC of 17 May 1977 on the 
harmonization of the laws of the Member States relating to turnover taxes - Common 
system of value added tax: uniform basis of assessment1 , and in particular Article 27 
thereof, 
Having regard to the proposal from the Commission, 
Whereas, under Article 27(1) of the Sixth VAT Directive, the Council, acting 
unanimously on a proposal from the Commission, may authorise any Member State to 
introduce special measures for derogation from that Directive in order to simplify the 
procedure for charging the tax or to prevent certain types of tax evasion and avoidance; 
Whereas, by letters officially received by the Commission on 4 July 1994 and 17 August 
1994 respectively, the Governments of the Federal Republic of Germany and the Grand 
Duchy of Luxembourg have requested authorisation to introduce a special measure 
concerning the construction and maintenance of a motorway bridge crossing over the river 
Moselle to the north of Perl and Schengen linking the German A8 motorway from 
Saarbriicken to the west with the Luxembourg A13 motorway from the Dudelange 
motorway junction to the east; 
Whereas, in accordance with Article 27(3) of the Sixth VAT Directive, the other Member 
States were informed on 16 September 1994 of the requests for authorisation received 
from the Federal Republic of Germany and the Grand Duchy of Luxembourg; 
Whereas in the absence of a special measure, for each supply of goods and services used 
for the construction and maintenance of the bridge in question it would have to be 
established whether the place of taxation was within the territory of the Federal Republic 
of Germany or the Grand Duchy of Luxembourg; whereas such taxation arrangements 
would give rise to considerable practical difficulties; 
Whereas the purpose of this derogation is to simplify the procedure for charging the tax 
on the construction and maintenance of the bridge in question; 
1 OJ N° L 145, 13.6.1977, p. 1. Directive as last amended by Directive 94/5/EC (OJ N° L 
60, 3.3.94, p. 16). 
^> 
Whereas the derogation will not affect the amount of tax due at the final consumption 
stage and will not therefore have an adverse affect on the European Communities' own 
resources arising from value added tax, 
HAS ADOPTED THIS DECISION: 
Article 1 
By way of derogation from Article 3 of Directive 77/388/EEC, the Federal Republic of 
Germany and the Grand Duchy of Luxembourg are hereby authorised, in respect of the 
motorway bridge over the river Moselle to the north of Perl and Schengen linking the 
German A8 motorway from Saarbrucken to the west with the Luxembourg A13 
motorway from the Dudelange motorway junction to the east, to consider, for the 
duration of the construction of the bridge, the whole of the construction site as being 
within the territory of the Grand Duchy of Luxembourg, and, with effect from the 
completion of the bridge, the whole of the bridge to be within the territory of the Federal 
Republic of Germany. 
Article 2 
This Decision is addressed to the Federal Republic of Germany and the Grand Duchy of 
Luxembourg. 
Done at Brussels, 1994. 
For the Council 
The President 
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ISSN 0254-1475 
COM(94) 506 final 
DOCUMENTS 
EN 09 06 
Catalogue number : CB-CO-94-533-EN-C 
ISBN 92-77-82283-X 
Office for Official Publications of the European Communities 
L-2985 Luxembourg 
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