18. 8. 86 Official Journal of the European Communities No C 207/1 
II 
(Preparatory Acts) 
ECONOMIC AND SOCIAL COMMITTEE 
Opinion on the proposal for a Council Directive imposing a standstill on VAT and excise 
duties 
(86/C 207/01) 
On 6 January 1986 the Council decided to consult the Economic and Social Committee, under 
Article 98 of the Treaty establishing the European Economic Community, on the abovementioned 
proposal. 
The Section for Economic and Financial Questions, which was responsible for preparing the 
Committee's work on the subject, adopted its opinion on 15 April 1986, in the light of the report by 
Mr Delia Croce. 
At its 237th plenary session (meeting of 22 May 1986) the Economic and Social Committee adopted 
the following opinion by a majority in favour, with four votes against and four abstentions. 
1. General comments 
1.1. The Committee in principle approves the proposal. 
However, it feels that the proposal is too modest for the 
goal being pursued, which is to harmonize Member States' 
VAT and excise duty systems. As the Commission White 
Paper on completing the internal market states, harmoniz­
ation of indirect taxes is a necessary step on the road to a 
real common market. The Committee has expressed this 
view in previous opinions on the subject. 
1.2. Although the Commission proposal appears re­
alistic in present circumstances, given the major difficulties 
which radical change in the systems used in the Member 
States could cause, its adoption must not serve as an excuse 
for curbing or slowing down harmonization in this area, 
which is vital for the building of the internal market. 
1.3. The Committee feels that the title of the proposal is 
inappropriate. The provisions on VAT do not constitute a 
'standstill', but an optional procedure for bringing rates 
closer together. 
1.4. The Committee regrets that the proposal to regulate 
the number and level of VAT rates does not include 
provision for the drawing-up of lists of goods and services 
subject to the various rates in the Member States' systems. 
The Member States will still be free to alter the lists of 
goods and services subject to the various VAT rates. The 
Committee therefore asks the Commission to present a 
proposal for supplementary measures in keeping with the 
goal of harmonization. 1.5. Lastly, the proposal goes some way towards 
allowing those Member States who so wish to approximate 
their rates; yet it does not consider (and thus does not solve) 
the problem of goods and services which are zero-rated in 
some Member States. This amounts to an exemption from 
indirect taxation, even though the right to recoup VAT 
charged at an earlier stage is granted. A solution must be 
found to this problem if it is not to hinder the completion of 
the internal market. 
2. Specific comments 
2.1. On page 1 of the proposal after the phrase 'Having 
regard to the opinion of the European Parliament', the 
phrase 'Having regard to the opinion of the Economic and 
Social Committee' should be added. 
2.2. The last recital on page 2 states that 'the only excise 
duties which have to be maintained at Community level are 
those on manufactured tobacco, alcoholic beverages and 
mineral oils'. 
The Committee feels that maintenance of these duties 
should be optional, and that the words 'have to be 
maintained' should therefore be altered to 'could be 
maintained'. 
2.3. On pages 3 and 5 of the proposal, Articles 1 and 2 
state that Member States shall 'refrain' (from making any 
changes, introducing new duties, etc.). 
The Committee feels that the word 'refrain' does not 
provide a formal ban. It should be amended to provide an 
effective ban. 
No C 207/2 Official Journal of the European Communities 18. 8. 86 
2.4. On page 3 of the proposal, Article 1(2) states that 
'(a) Member States which apply more than three rates may 
reduce that number to three; (b) Member States which 
apply a single rate may increase that number to two'. 
The Committee feels that this provision will have no 
practical effect, given that Member States' present right to 
reduce the number of their VAT rates to three is 
incontrovertible. The number of rates should be reduced. 
2.5. Article 1(3)(a) permits Member States to amend 
their standard rates to bring them nearer the average of the 
highest and lowest standard rates in force in the 
Community. 
In the Committee's view, approximation should be based 
on the average standard rate in the Community. The 
average should be weighted to take account of trade levels. 
2.6. Article l(3)(d) permits Member States to increase 
the rates which are below their standard rate, provided that they do not exceed the average of such lowest rates in force 
in the Community. 
Here too, a weighted average would be preferable. 
The Committee feels that account should also be taken here 
of the 'zero' rate. 
2.7. The Committee feels that implementation of Article 
1(3) should take account of other taxes which are 
analogous to VAT but which have a different name. 
2.8. Article 1(4) defines the standard rate — the 
Committee considers the term 'standard rate' inap­
propriate. It would prefer the term 'basic rate'. 
2.9. On page 5, Article 2(3) states that 'the provisions of 
paragraphs 1 and 2 do not apply to the excise duties on 
manufactured tobacco, alcoholic beverages and mineral 
oils'. 
The Committee feels that unless the Commission presents a 
specific proposal on this, Article 2(3) should be deleted. 
Done at Brussels, 22 May 1986. 
The Chairman 
of the Economic and Social Committee 
Gerd MUHR 
Opinion on the proposal for a Council Directive on the harmonization of the laws of the 
Member States relating to turnover taxes — VAT rules applicable to the operation of a future 
cross-Channel fixed link (') 
(86/C 207/02) 
On 20 January 1986 the Council of the European Communities decided to consult the Economic 
and Social Committee, under Articles 99 and 100 of the Treaty establishing the European Economic 
Community, on the abovementioned proposal. 
The Section for Economic and Financial Questions, which was responsible for preparing the 
Committee's work on the matter, adopted its opinion on 15 April 1986 in the light of the report by 
Mr Hemmer. 
At its 237th plenary session (meeting of 21 May 1986) the Economic and Social Committee adopted 
the following opinion unanimously. 
(>) OJ No C 358, 31. 12. 1985, p. 18.