No C 128/4 Official Journal of the European Communities 17. 5. 88 
II 
(Preparatory Acts) 
COMMISSION 
Proposal for a Council Regulation (ECSC, EEC, Euratom) on the definitive uniform 
arrangements for the collection of VAT own resources 
COM(88) 99 final 
(Submitted by the Commission to the Council on 11 March 1988) 
(88/C 128/06) 
THE COUNCIL OF THE EUROPEAN COMMUNITIES, 
Having regard to the Treaty establishing the European 
Coal and Steel Community, and in particular Article 
78h thereof, 
Having regard to the Treaty establishing the European 
Economic Community, and in particular Article 209 
thereof, Whereas the revenue method should be chosen as the 
sole definitive method for determining the VAT 
resources base, since this method is reliable and already 
applied by most Member States; 
Whereas the provisions of Regulation (EEC, Euratom, 
ECSC) No 2892/77 may be retained unless they are no 
longer necessary or need to be amended in the light of 
experience acquired; 
Having regard to the Treaty establishing the European 
Atomic Energy Community, and in particular Article 183 
thereof, 
Having regard to Decision ... on own resources, and in 
particular Article ... thereof, Whereas amounts of VAT first established as due but 
subsequently time-barred, written off or waived for 
whatever reason by the Member States should be re­
instated in the VAT revenue from which the VAT own 
resources base is determined; 
Having regard to the proposal from the Commission, 
Having regard to the opinion of the European 
Parliament, 
Having regard to the opinion of the Court of Auditors, 
Whereas pursuant to Article 14 of Council Regulation 
(EEC, Euratom, ECSC) No 2892/77 ('), as last amended 
by Regulation (ECSC, EEC, Euratom) No 3735/85 (2), 
that Regulation applies for a transitional period ending 
on 31 December 1988; Whereas provision should be made for the Commission 
to examine, in cooperation with the national tax auth­
orities, the national procedures for assessing and 
recovering VAT and the effectiveness of the VAT 
control systems applied by the Member States; whereas 
after this examination the Commission will periodically 
produce a report on the actual collection of VAT in each 
Member State, 
HAS ADOPTED THIS REGULATION: 
Whereas the provisions relating to the definitive uniform 
arrangements for collecting VAT resources and the 
detailed rules for giving effect to these arrangements are 
to apply from 1 January 1989; 
(') OJ No L 336, 17. 12. 1977, p. 8. 
O OJ No L 356, 31. 12. 1985, p. 1. TITLE I 
General provisions 
Article 1 
VAT resources shall be calculated by applying the 
Community rate, set in accordance with Decision ... on 
own resources, to the base determined in accordance 
with this Regulation. 
17. 5. 88 Official Journal of the European Communities No C 128/5 
TITLE II 
Scope 
Article 2 
1. The VAT resources base shall be determined from 
the taxable transactions referred to in Article 2 of 
Council Directive 77/388/EEC ('), with the exception of 
transactions exempted pursuant to Articles 13 to 16 of 
that Directive. 
2. For the purposes of applying paragraph 1, the 
following shall be taken into account for determining 
VAT resources: 
— transactions which, in accordance with Article 28 (2) 
of Directive 77/388/EEC, are subject to exemption 
with refund of the tax paid at the preceding stage, 
— transactions which Member States continue to subject 
to tax pursuant to Article 28 (3) (a) of Directive 
77/388/EEC, 
— transactions which Member States continue to 
exempt pursuant to Article 28 (83) (b) of Directive 
77/388/EEC, 
— transactions which are taxed under the right of 
option granted to taxable persons by Member States 
pursuant to Article 28 (3) (c) of Directive 
77/388/EEC. 
3. By way of derogation from paragraph 1, Member 
States shall have the option of leaving out of account, 
for the purpose of determining VAT resources, the 
transactions of taxable persons whose annual turnover, 
determined in accordance with the rules laid down in 
Article 24 (4) of Directive 77/388/EEC, and annual 
purchases subject to deductible VAT do not exceed 
10 000 ECU converted into national currency at the 
average rate for the financial year concerned. Member 
States may round upwards or downwards, by up to 
10 %, the amounts which result from the conversion. 
TITLE III 
Method of calculation 
Article 3 
For a given calendar year, and without prejudice to 
Articles 5 and 6, the VAT resources base shall be 
calculated by dividing the total net VAT revenue 
collected by a Member State during that year by the rate 
at which VAT is levied during that same year. 
(•) OJ No L 145, 13. 6. 1977, p. 1. If more than one VAT rate is applied in a Member State, 
the VAT resources base shall be calculated by dividing 
the total net VAT revenue collected by the weighted 
average rate of VAT. In this case the Member State shall 
calculate the weighted average rate, to four decimal 
places, by the common method defined in Article 4. This 
weighted average rate shall be expressed as a percentage. 
Article 4 
1. In order to calculate the weighting of the various 
rates as referred to in Article 3, the Member State shall 
break down, by VAT rate applied, all transactions which 
are taxable under its national legislation and which do 
not entitle the customer to deduction of VAT, account 
being taken of Article 17 of Directive 77/388/EEC, and 
consumption on the farm by flat-rate farmers and their 
direct sales to final consumers. 
The VAT rates used for the purposes of such calculation 
shall be those which, in accordance with paragraph 7, 
affect the VAT revenue collected during the year in 
question. 
Transactions which are subject, pursuant to Article 28 
(2) of Directive 77/388/EEC, to exemption with refund 
of the tax paid at the preceding stage shall be regarded 
as taxable transactions subject to a zero rate. 
2. The breakdown by rate of VAT shall be applied to 
the following categories: 
(a) the following categories of transaction, if subject to 
non-deductible VAT: 
— final consumption of households on the territory 
referred to in Article 3 of Directive 77/388/EEC 
for the Member State in question, except for the 
part covered by (b), and intermediate 
consumption of private non-profit institutions 
and general government, 
— intermediate consumption of other sectors, 
— gross-fixed capital formation of general 
government, 
— gross-fixed capital formation of other sectors, 
— improved and unimproved building land, as 
defined in Article 4 (3) (b) of Directive 
77/388/EEC, 
— transactions involving gold other than gold for 
industrial use; 
(b) consumption on the farm by flat-rate farmers and 
their direct sales to final consumers. 
3. For the purposes of the breakdown referred to in 
paragraph 2, transactions by the flat-rate farmers 
referred to in (b) thereof shall be subject to a rate equi­
valent to the charge on inputs. 
No C 128/6 Official Journal of the European Communities 17. 5. 88 
4. The breakdown of transactions by statistical 
category shall be effected by means of data taken from 
national accounts prepared in accordance with the 
European System of Integrated Economic Accounts 
(ESA). In order to calculate the VAT own resources base 
for any given financial year, reference shall be made to 
the national accounts relating to the last year but one 
before that financial year. 
A Member State may be authorized, in accordance with 
the procedure provided for in Article 13, to use data 
relating to another year, which may not be earlier than 
the fifth year before the financial year in question. 
5. For the purpose of identifying transactions subject 
to non-deductible VAT and effecting the breakdown by 
rate of VAT, Member States may refer to data taken 
from sources complementary to the ESA and capable of 
being adapted thereto, that is, in the first instance, from 
internal national accounts if they provide the necessary 
breakdown, or, if not, from any other appropriate 
source. 
6. In order to determine the weighting of each rate, 
Member States shall calculate the relationship between 
the value of the transactions to which that rate applies 
and the aggregate value of all transactions. 
7. Should a Member State amend the VAT rate 
applicable to all or some transactions or the tax 
treatment for certain transactions in such a way as to 
affect the VAT revenue collected, it shall calculate a new 
weighted average rate. The new weighted average rate 
shall be applied to the revenue derived from application 
of the amended rate or tax treatment. 
By way of derogation from the first subparagraph, the 
Member State may calculate a single weighted average 
rate. To this end, transactions in respect of which the 
rate or treatment has been changed shall be allocated to 
the old and new rates or to the old and new treatment 
pro rata temporis, with account being taken of the 
average period of time elapsing between entry into force 
of the new rate or treatment and the collection of 
revenue resulting therefrom, calculated over the entire 
year in question. This average period may be rounded to 
the full month. 
Article 5 
1. For the purposes of applying Article 3, each 
Member State shall, if appropriate, add to the revenue 
collected an amount corresponding to the total VAT 
which would have been collected but for the application 
of a scheme of graduated tax relief under Article 24 (2) 
of Directive 77/388/EEC. 2. Each Member State shall deduct from revenue 
collected an amount corresponding to total input VAT, 
with the exception of that relating to consumption on the 
farm and direct sales to final consumers, which flat-rate 
farmers have not recouped because that Member State 
has reduced the flat-rate compensation percentages 
applicable to transactions carried out by flat-rate farmers 
as permitted by Article 25 (3) of Directive 77/388/EEC. 
The amount of input VAT and the compensated 
amounts shall be those for the year in question. 
This provision may be applied only if the flat-rate 
compensation percentage determined in accordance with 
Article 25 (3) of Directive 77/388/EEC leaves under­
compensation of not less than half a point. 
3. For any given year amounts of VAT which become 
time-barred, are written off or waived during the year, 
pursuant to national provisions, shall be added to the 
revenue collected by a Member State, with the exception 
of amounts which: 
— could not be recovered despite enforcement action, 
— were not paid by reason of application of the final 
indent of Article 22 (9) of Directive 77/388/EEC. 
Article 6 
1. For the purposes of applying Article 2 (1) to trans­
actions carried out by taxable persons whose annual 
turnover exceeds 10 000 ECU but who are exempted 
under Article 24 (2) of Directive 77/388/EEC and to the 
cases referred to in paragraph 2, Member States shall 
determine the VAT resources base from the returns to be 
made by taxable persons in accordance with Article 22 of 
that Directive or, where there is no return or the return 
does not contain the necessary information, from appro­
priate data such as other tax returns, professional 
accounts or complete statistical series. 
2. For the purposes of applying the second, third and 
fourth indents of Article 2 (2): 
— with regard to the transactions listed in Annex E to 
Directive 77/388/EEC which Member States 
continue to tax pursuant to Article 28 (3) (a) of that 
Directive, Member States shall calculate the VAT 
resources base as if these transactions were exempted, 
— with regard to the transactions listed in Annex F to 
Directive 77/388/EEC which Member States 
continue to exempt pursuant to Article 28 (3) (b) of 
that Directive, Member States shall calculate the 
VAT resources base as if these transactions were 
taxed, 
17. 5. 88 Official Journal of the European Communities No C 128/7 
— with regard to the transactions referred to in 
paragraph 1 (a) of Annex G to Directive 
77/38 8/EEC which are taxed under the option given 
to taxable persons by Member States pursuant to 
Article 28 (3) (c) of that Directive, Member States 
shall calculate the VAT resources base as if these 
transactions were exempted. 
3. Under the procedure provided for in Article 13, a 
Member State may be authorized: 
— either not to take into account in calculating the 
VAT resources base: 
(a) one or more of the categories of transactions 
listed in Annexes E, F and G to Directive 
77/388/EEC to which paragraph 2 of this Article 
applies; 
(b) the amount corresponding to the tax which 
would have been collected but for the application 
of a scheme of graduated tax relief under Article 
24 (2) of Directive 77/388/EEC, 
— or to calculate the VAT resources base in the cases 
referred to in (a) and (b) by using approximate 
estimates, 
where precise calculation of the VAT resources base in 
these cases would be likely to involve administrative 
burdens which would be unjustified in relation to the 
effect of the transactions in question on the total VAT 
recources base of that Member State. 
4. Where a Member State makes use of the second 
subparagraph of Article 17 (6) and of Article 17 (7) of 
Directive 77/388/EEC to restrict the exercise of the 
right to deduct, the VAT own resources base may be 
determined as if the exercise of the right to deduct had 
not been restricted. 
The preceding subparagraph shall apply, in relation to 
the second subparagraph of Article 17 (6) of Directive 
77/388/EEC, only in respect of the purchase of 
petroleum products and passenger cars used for business 
purposes. 
5. Where tax refunds are granted by a Member State 
pursuant to Article 6 of Council Directive 69/169/EEC 
of 28 May 1969 on the harmonization of provisions laid 
down by law, regulation or administrative action relating 
to exemption from turnover tax and excise duty on 
imports in international travel ('), the taxable amount of 
(') OJ No L 133, 4. 6. 1969, p. 6. the transactions which gave rise to these refunds shall, if 
necessary, be subtracted from the VAT resources base. 
TITLE IV 
Provisions relating to accounting and making available of 
own resources 
Article 7 
1. Before 1 July the Member States shall send the 
Commission a statement of the total amount of the VAT 
resources base for the previous calendar year, calculated 
in accordance with Article 3, to which the rate referred 
to in Article 1 is to be applied. 
2. The statement shall contain all the data used to 
determine the base which are required for the control 
referred to in Article 11. It shall indicate separately the 
base resulting from the transactions referred to in 
Articles 5 and 6 (1) to (4). 
3. The data to be used to establish the base shall be 
the most recent data which exist when the statement is 
produced. 
Article 8 
Member States shall send the Commission by 31 March 
each year an estimate of the VAT resources base for the 
following financial year. 
Article 9 
1. The corrections to the statements referred to in 
Article 7 (1) for previous financial years shall be made by 
the Commission in agreement with the Member State. 
All the corrections to the statements shall be incor­
porated in an aggregate statement at 30 June. 
If the Member State does not give its agreement, the 
Commission, after re-examining the matter, shall take 
whatever measures it considers necessary for correct 
application of this Regulation. 
2. No further corrections may be made to the annual 
statement referred to in Article 7(1) after 30 June of the 
fourth year following the financial year concerned, 
unless they concern points previously notified either by 
the Commission or by the Member State concerned. 
No C 128/8 Official Journal of the European Communities 17. 5. 88 
TITLE V 
Provisions relating to control 
Article 10 
1. Member States shall inform the Commission by 30 
April of each financial year of the solutions and modifi­
cations thereto that they propose to adopt in order to 
determine the VAT resources base for each of the 
categories of transaction referred to in Articles 5 and 
6(1) to (4), indicating, where applicable, the nature of 
the data which they consider appropriate and an estimate 
of the value of the base for each of these categories of 
transactions. 
Within 30 days the Commission shall send the other 
Member States the information referred to above which 
it has received from each Member State. 
2. The Commission shall examine, following the 
procedure laid down in Article 13, the proposed 
solutions and modifications. 
Article 11 
1. As regards VAT resources, the Commission's 
controls shall be carried out with the competent auth­
orities in the Member States. During these controls, the 
Commission shall ensure, in particular, that the oper­
ations to centralize the assessment base and to determine 
the weighted average rate referred to in Articles 3 and 4 
and the total net VAT collected have been performed 
correctly; it shall also ascertain that the data used were 
appropriate and that the calculations made to determine 
the amount of VAT resources resulting from the trans­
actions referred to in Articles 5 and 6 (1) to (4) comply 
with this Regulation. 
2. Council Regulation (EEC, Euratom, ECSC) No 
165/74 of 21 January 1974 determining the powers and 
obligations of officials appointed by the Commission 
pursuant to Article 14 (5) of Regulation (EEC, Euratom, 
ECSC) No 2/71 O shall apply to VAT resources 
controls. For the purposes of applying Article 5 of that 
Regulation, is shall be understood that the information 
referred to therein may be communicated only to those 
persons who, by virtue of their duties in making available 
and controlling VAT resources, must have knowledge of 
such information. 
3. Following the controls referred to in paragraph 1, 
the annual statement for a given financial year shall be 
corrected as specified in Article 9. Article 12 
1. The Commission shall examine, with the 
cooperation of the competent authorities in the Member 
States, the procedures applied by the Member States for 
registering taxable persons and determining and 
collection VAT, and the effectiveness of their VAT 
control systems. 
2. Following this examination the Commission shall 
procedure a report every three years on the actual 
collection of VAT in each Member State. 
3. The Commission shall present this report to 
Parliament and the Coucil for the first time by 31 
December 1991. 
Article 13 
1. The committee referred to in Article 20 of Council 
Regulation (EEC, Euratom, ECSC) No 2891/77 (2), 
hereinafter called 'the committee', shall regularly 
examine, on the initiative of the Commission or at the 
request of a Member State, problems arising out of 
application of this Regulation. 
2. Member States applying for the authorization 
provided for in Article 4 (4) or 6 (3) shall refer their 
application to the Commission as soon as possible and 
not later than 30 April of the financial year from which 
the authorization is to apply. 
The Commission representative shall submit to the 
committee as soon as possible and not later than 
31 December of the financial year a draft Decision. 
3. On the initiative of the Commission or at the 
request of a Member State, the committee shall examine 
the solutions referred to in Article 10. 
If the committee's examination reveals differences of 
opinion as to the solutions envisaged, the Commission 
representative shall submit a draft Decision to the 
committee as soon as possible and not later than 
31 December of the financial year from which the 
solution is to apply. 
4. The committee shall deliver its opinion on the draft 
Decisions referred to in paragraphs 2 and 3 within a 
O OJ No L 20, 24. 1. 1974, p. 1. O OJ No L 336, 27. 12. 1977, p. 1. 
17. 5. 88 Official Journal of the European Communities No C 128/9 
period which the chairman may lay down according to 
the urgency of the matter involved, if necessary, by 
taking a vote. 
This opinion shall be recorded in the minutes; each 
Member State shall also be entitled to request that its 
position be recorded in these minutes. 
The Commission shall take the utmost account of the 
opinion delivered by the committee. 
5. No later than 60 days after the committee has 
delivered its opinion, the Commission shall adopt a 
Decision which it shall communicate to the Member 
States. TITLE VI 
Final provisions 
Article 14 
This Regulation shall enter into force on the third day 
following its publication in the Official Journal of the 
European Communities. 
It shall apply with effect from 1 January 1989. 
It shall not apply, however, to the production or the 
correction of statements of the VAT resources base for 
years before 1989 which have been produced in 
accordance with Regulation (EEC, Euratom, ECSC) No 
2892/77 which remains in force in respect of the 
statements concerned. 
This Regulation shall be binding in its entirety and 
directly applicable in all Member States.