No C 26/2 Official  Journal  of the European  Communities 1.2. 78 
II 
(Preparatory  Acts) 
COMMISSION 
Proposal  for  a seventh  Council  Directive  on the  harmonization  of the  laws  of the 
Member  States  relating  to turnover  taxes  — common  system  of value  added  tax to be 
applied  to works  of art, collectors'  items,  antiques  and  used  goods 
(Submitted  by the Commission  to the Council  on 11 January  1978) 
THE  COUNCIL  OF  THE  EUROPEAN  COMMUNITIES, 
Having  regard  to  the  Treaty  establishing  the 
European  Economic  Community,  and  in particular 
Articles  99 and  100  thereof, 
Having  regard  to the proposal  from  the Commission, 
Having  regard  to the  opinion  of the  European 
Parliament, 
Having  regard  to the opinion  of the  Economic  and 
Social  Committee, 
Whereas,  under  Article  32 of 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 assessment  (*), the 
Council  must  adopt  a Community  taxation  system  to 
be applied  to works  of art,  antiques,  collectors'  items 
and used  goods;  whereas  this  system  should  avoid 
deflection  of trade  within  the Community,  and  ensure 
that the application  of the  Community  rate  to such 
transactions  produces  equitable  results  in all Member 
States,  for  the  purposes  of the  Community's  own 
resources; 
(!) OJ  No L 145,  13. 6. 1977,  p. 1. Whereas  application  of the  normal  tax  scheme  to 
works  of art,  antiques,  collectors'  items  and  used 
goods  would  give  rise  to difficulties;  whereas,  in the 
absence  of special  rules,  a finished  item  reintroduced 
into the economic  circuit  would  once  again  be fully 
subject  to value  added  tax  and  the  taxable  person 
wishing  to resell  the item  be unable  to deduct  the tax 
included  in the item's  purchase  price; 
Whereas,  for  practical  reasons,  if the  items  in 
question  were  supplied  by a private  person,  value 
added  tax  could  not  be chargeable;  whereas  the 
resulting  difference  in the  tax  burden  would  be an 
inducement  to bypass  ordinary  commercial  channels; 
Whereas,  in order  to remedy  these  drawbacks,  special 
Community  schemes  are  needed  for  works  of art, 
antiques,  collectors'  items  and  used  goods, 
HAS  ADOPTED  THIS  DIRECTIVE: 
Article  1 
Introductory  provisions 
By way  of derogation  from  Articles  11 (A),  17, 18 
and 28 of Directive  77/388/EEC,  Member  States  shall 
apply  value  added  tax  in accordance  with  the 
1. 2. 78 Official  Journal  of the European  Communities No C 26/3 
following  Articles  to  supplies  of  works  of  art, 
antiques,  collectors'  items  and  used  goods,  where 
they  are effected  by taxable  persons,  who  acquire  such 
items  with  a view  to their  resale  and  to transfers  of 
such  items  where  they  are  carried  out  by  persons 
exercising  an intermediate  function  of whatever  kind. 
For the  purposes  of this  Directive,  'a taxable  person 
wishing  to resell'  shall  mean  any  person  who  in the 
course  of business  carries  out  one  of the  activities 
referred  to in the preceding  paragraph. 
Taxable  persons  covered  by  the  special  scheme 
provided  for in his Directive  may,  in accordance  with 
the procedures  laid  down  by each  Member  State,  opt 
for application  of the  normal  scheme  for value  added 
tax. 
This  Directive  shall  not  preclude  the  application  of 
the other  provisions  of Directive  77/388/EEC,  and  in 
particular  those  of  Article  15  (1)  and  (2)  and 
Article  24. 
Article  2 
Scheme  for  works  of  art,  collectors'  items  and 
antiques 
1. For  the purposes  of this  Directive: 
— 'works  of art'  shall  mean  works  as defined  in 
headings  No 99.01,  No 99.02  and  No  99.03  of the 
Common  Customs  Tariff, 
— 'collectors'  items'  shall  mean  items  of 
archaeological,  historical,  ethnographic,  palaeon-
tological,  zoological,  botanical,  mineralogical, 
numismatic  and  philatelic  interest,  intended  for  a 
collection, 
— 'antiques'  shall  mean  all items  other  than  works 
of art  and  collectors'  items  of an age  exceeding 
100 years. 
2. Member  States  shall  exempt  supplies  and 
imports  of works  of art  effected  by the  artist 
himself. 
3. The  taxable  amount  in respect  of supplies  of 
works  of  art,  collectors'  items  and  antiques 
effected  by a taxable  person  wishing  to resell  shall 
be 30 % of the selling  price. 
4. This  scheme  shall  also  apply  to supplies  of the 
items  referred  to in paragraph  1 and  made  of gold 
or any  other  precious  metal  or  containing precious  stones,  where  the value  of such  materials 
incorporated  therein  does  not  exceed  50 % of the 
selling  price  of those  items. 
5. The  following  shall  not  be deductible: 
— tax  paid  at the time  of the  acquisition  of the  items 
referred  to in paragraph  1, 
— tax  paid  by a taxable  person  wishing  to resell  at 
the time  of acquisition  of goods  and  services  used 
for the purposes  of this  activity. 
6. Where  the  items  referred  to in paragraph  1 are 
imported  by a taxable  person  wishing  to resell,  70 % 
of the amount  of the  value  added  tax  paid  at the time 
of importation  shall  be  deductible.  The  right  to 
deduct  shall  be exercised  only  when  the  tax in respect 
of the  supply  of the  item  effected  by the  taxable 
person  wishing  to resell  becomes  chargeable. 
7. Where  the  items  purchased  or imported  with  a 
view  to resale  are  dispatched  or transported  outside 
the territory  referred  to in Article  3 of Directive 
77/388/EEC,  the  taxable  person  wishing  to resell 
shall  be entitled  to deduct  the value  added  tax  due  or 
paid  at the  time  of acquisition  or importation.  The 
right  to deduct  shall  be exercised  only  when  the 
export  formalities  have  been  completed. 
Article  3 
Scheme  for used  goods 
1. For  the  purposes  of this  Directive,  'used  goods' 
shall  mean  movable  property  other  than  that  referred 
to in Article  2 that  has  been  used  and  is suitable  for 
re-use  as it is or after  repair. 
2. The  taxable  amount  in respect  of supplies  of 
used  goods  other  than  those  referred  to in Article  4 
shall  be 30 % of the  selling  price  where  the  supply  is 
effected  by a taxable  person  wishing  to resell  who 
acquired  the  item  in question  from  a non-taxable 
person  or from  a taxable  person  not  entitled  to 
deduct  value  added  tax  at the  time  of acquisition  of 
that item. 
3. The  scheme  provided  for in paragraph  2 may,  at 
the option  of the  taxable  person  wishing  to resell, 
apply,  in accordance  with  the  procedures  laid  down 
by each  Member  State,  to supplies  of used  goods 
acquired  from  other  taxable  persons.  The  option 
shall  cover  all such  transactions. 
No C 26/4 Official  Journal  of the European  Communities 1. 2. 78 
4. This  scheme  shall  not apply  to supplies  of used 
goods  made  of gold  or any  other  precious  metal  or 
containing  precious  stones. 
5. Value  added  tax  invoiced  to the taxable  person 
wishing  to resell  at the  time  of acquisition  of the 
goods  and  services  used  for  the  purposes  of his 
transactions  taxed  under  this  scheme  shall  not  be 
deductible. 
Where,  however,  goods  acquired  with  a view  to 
resale  are  dispatched  or transported  outside  the 
territory  referred  to  in Article  3 of  Directive 
77/388/EEC,  the  taxable  person  shall  be entitled  to 
deduct  the value  added  tax due  or paid  at the time  of 
acquisition  of those  goods.  The  right  to deduct  shall 
be exercised  only  when  the  export  formalities  have 
been  completed. 
Article  4 
Scheme  for certain  used  goods 
1. For  the purposes  of this  Directive: 
— 'private  cars'  shall  mean  motor  road  vehicles  used 
for the  transport  of persons,  with  a seating 
capacity  of not  more  than  eight  in addition  to the 
driver, 
— 'trailers'  shall  mean  any  trailer  hauled  by  a 
private  car,  including  caravans  but  excluding 
mobile  homes, 
— 'motor-cycles'  shall  mean  motor-cycles,  with  or 
without  side-cars  and  cycles  fitted  with  an 
auxiliary  motor;  side-cars  for motor-cycles, 
— 'private  aircraft'  shall  mean  aircraft,  whether  or 
not fitted  with  an engine,  not  used  for  a taxable 
activity, 
— 'pleasure  vessels'  shall  mean  pleasure  boats  and 
other  pleasure  craft,  whether  or not  fitted  with  a 
motor,  not used  for a taxable  activity. 
2. Supply  of an item  referred  to in paragraph  1 by 
a taxable  person  wishing  to resell  entitles  him  to 
deduct  an amount  of value  added  tax  calculated  on 
the basis  of the  acquisition  price  of that  item  at the 
rate in force  at the time  of acquisition,  where: — the  item  was  acquired  from  a non-taxable 
person, 
— the  item,  acquired  from  a taxable  person,  is 
excluded  from  the right  to deduct  provided  for in 
Article  17 of Directive  77/388/EEC. 
3. The  right  to deduct  provided  for in paragraph  2 
shall  arise  when  the  tax  in respect  of the  supply  of 
the item  by the  taxable  person  wishing  to resell 
becomes  chargeable.  The  amount  deductible  may  not 
exceed  four-fifths  of the amount  of tax due  on resale. 
4. Where  the goods  referred  to in paragraph  1 are 
dispatched  or  transported  outside  the  territory 
referred  to in Article  3 of Directive  77/388/EEC,  the 
amount  of tax  deductible  may  not  exceed  four-fifths 
of the  amount  of tax  calculated  on the  basis  of the 
value  declared  for the  purposes  of exportation.  The 
right  to deduct  shall  be exercised  only  when  the 
export  formalities  have  been  completed. 
5. Upon  importation  of the  goods  referred  to in 
paragraph  1, the  tax  paid  in respect  of that  event 
shall  entitle  the  taxable  person  wishing  to resell  to 
carry  out  the deduction  provided  for in Article  17 of 
Directive  77/388/EEC  when  the tax in respect  of the 
supply  of the  item  by that  taxable  person  becomes 
chargeable  or when  the  export  formalities  have  been 
completed. 
Article  5 
Final  provisions 
1. Member  States  shall  bring  into  force  the 
provisions  necessary  in order  to comply  with  this 
Directive  within  three  months  of its notification  and 
shall  forthwith  inform  the Commission  thereof. 
2. Member  States  shall  transmit  to  the 
Commission  the texts  of any  fundamental  provisions 
of national  law  which  they  subsequently  adopt  in the 
field  covered  by this  Directive. 
Article  6 
This  Directive  is addressed  to the Member  States.