ARCHIVES HISTORIQUES 
DE LA COMMISSION 
 
 
 
COLLECTION RELIEE DES 
DOCUMENTS "COM" 
 
 
 
 
COM (84) 144 
 
 
 
Vol. 1984/0 054 
  
 
Disclaimer  
Conformém ent au règlement (CEE, Euratom) n° 354/83 du Conseil du 1er février 1983 
concernant l'ouverture au public des archives historiques de la Communauté économique 
européenne et de la Communauté européenne de l'énergie atomique (JO L 43 du 15.2.1983, 
p. 1), tel que modifié par le règlement (CE, Euratom) n° 1700/2003 du 22 septembre 2003 
(JO L 243 du 27.9.2003, p. 1), ce dossier est ouvert au public. Le cas échéant, les documents 
classifiés présents dans ce dossier ont été déclassifiés conformément à l'article 5 dudit 
règlem ent. 
In accordance with Council Regulation (EEC, Euratom) No 354/83 of 1 February 1983 
concerning the opening to the public of the historical archives of the European Econom ic 
Communit y and the European Atom ic Energy Communit y (OJ L 43, 15.2.1983, p. 1), as 
amended by Regulation (EC, Euratom) No 1700/2003 of 22 September 2003 (OJ L 243, 
27.9.2003, p. 1), t his file is open to the public. Where necessary, classified documents in this 
file have been declassified in conformity with Article 5 of the aforementioned regulation.  
In Übereinstimmung mit der Verordnung (EWG, Euratom) Nr. 354/83 des Rates vom  1. 
Februa r 1983 über die Freigabe der historischen Archive der Europäischen  
Wirtschaftsgemeinschaft und der Europäischen Atomgem einschaft (ABI. L 43 vom  15.2.1983,  
S. 1), geändert durch die Verordnung (EG, Euratom) Nr. 1700/2003 vom 22. Septem ber 2003  
(ABI. L 243 v om 27.9.2003, S. 1), ist diese Datei der Öffentlichkeit zugänglich. Soweit  
erforderlich, wurden die Verschlusssachen in dieser Datei in Übereinstimmung mit Artikel 5  
der genannten Verordnung freigegeben.  
COMMISSION O F THE EUROPEAN COMMUNITIES
COM(84) 144 final.
Brussels, 20 March 1984.
COMMISSION COMMUNICATION TO THE COUNCIL
concerning the application of Article 27 of the Sixth Council  
Directive of 17 May 1977 on value added tax to a request for derogation  
submitted by the United Kingdom Government
COM(84) 144 final.

COM *Akk
Commission Communication to the Council concerning the ap p lic a tio n  of  
A r tic le  27 of the Sixth Council D irectiv e of 17 May 1977 on value added  
tax (1) to a request fo r derogation submitted by the United Kingdom
Government
1. O n 17 January 1984, the United Kingdom Government informed the  
Commission, pursuant to the above provisions, of it s  in te n tio n  to  
introduce a measure derogating from ths Sixth D ire c tiv e .
2. The purpose of the derogation is to avoid c e rta in  fraud or tax  
evasion on supplies of gold, gold coin and gold scrap between taxable  
persons by the in tro d u ctio n  of a special tax accounting scheme.
3 . The Commission informed the other Member S tates, by le tt e r  dated  
44- February 1984, of the request submitted by the United Kingdom Government.
4. In accordance with A rtic le  27(4) of the Sixth D ire c tiv e , the  
Council's decision w ill be deemed to have been adopted i f ,  w ith in  two  
months of the other Member States being inform ed, as described at
3 above, n e ith e r the Commission nor any Member S tate has requested th at  
the m atter be raised by the Council.
5. Provided th at the derogation proposed by the United Kingdom  
Government is  re s tric te d  to the measures mentioned in  paragraph 2 of  
th is  Communication, the Commission does not intend to ask fo r the  
m atter to be raised by the Council.
6 . The Commission requests the Council to publish the te x t of  
paragraphs 1  to 3 of th is  Communication in the O ffic ia l Journal together  
with its  d ecision.
ANNEX: 1

SIXTH VAT DIRECTIVE: NOTIFICATION BY THE UNITED'KINGDOM OF A SPECIAL  
MEASURE UNDER ARTICLE 27 OF THE SIXTH VAT DIRECTIVE(77/388/EEC)
1. Article 27 provides for Member States to introduce special measures  
to prevent certain types of tax evasion or abuse. Such measures must be  
authorised by the Council, after notification to the Commission under  
Article 27.2. The United Kingdom hereby notifies the Commission that it  
needed to introduce, as a matter of urgency, such a special measure as  
detailed below.
2. The United Kingdom has in the lash 18 months detected a large number  
of VAT frauds concerning the supplies, between taxable persons, of gold,  
gold coins and gold scrap. To date the estimated tax loss is in excess  
of £100m.
3. The fraud depends for its success on the application of Article 21.1(a  
and Article 22.3. Gold is smuggled into the United Kingdom, by a taxable
I
person, from a country which charges either no tax or very little tax on  
the supply of gold. Once in the United Kingdom this gold is sold by the  
taxable person to a taxable dealer in gold usually via one or more  
intermediaries. A tax invoice is issued to the buyer who pays the  
seller the contracted price plus VAT at 15%. This VAT is deducted as  
input tax in the normal way, but the seller, once having received payment  
including VAT, disappears never having accounted to the Customs and Excise  
for the VAT on his supplies.
r * \
4. To deny fraudulent persons the opportunity of perpetrating this type  
of fraud in the future the United Kingdom considered it necessary to  
introduce a special scheme under which the seller of gold will not  
necessarily be paid the VAT on his supply, but instead the buyer.will  
have the option to pay it direct, on the seller's behalf, to Custom; and  
Excise.
5. The scheme, whose use is optional at the discretion of the buy· . · ,  
requires the seller to issue a tax invoice - Article 22.3. However, l  ■  
buyer will not pay this tax to the seller but direct to Customs and lx ise

certifying both his copy of the tax invoice and that of the seller to  
this affect.
6. Customs and Excise will require buyers wishing to have the option to  
use the special scheme to have prior authorisation. It will be available  
only to established gold dealers of good.repute. The number of such  
authorised buyers will, it is anticipated, be limited as will the length  
of duration of the scheme. It is intended as an alteration to the normal  
VAT procedure for use only in particular cases of doubt, and the number 
of such cases is expected to be small. The very existence of the scheme  
is expected to act as a deterrent to fraud, because of the uncertainty it  
creates as to the prospects of disposing of smuggled gold for a VAT-  
inclusive price.. The use of the scheme will be reviewed after six months  
to establish whether it can be withdrawn.
*
7. The United Kingdom submits that this special measure is fully in  
accordance with the provisions of Article 27.1. Its use is to prevent  
fraud and it will only apply to a limited number of transactions in gold  
between taxable persons. The London Gold Market has agreed to the  
introduction of the scheme, as one of a number of joint measures designed  
to prevent and deter fraud.