ARCHIVESHISTORIQUES
DELACOMMISSION
COLLECTION RELIEEDES
DOCUMENTS "COM"
COM(79)694
Vol.1979/0237

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COMMISSION OFTHEEUROPEAN COMMUNITIES
COM(79)694 final.
Brussels,28November1979
Proposalfora
FIFTHCOUNCILDIRECTIVE
ontheharmonization ofprovisionslaiddownbylaw,regulationor
administrative actionrelatingtotherulesgoverningturnovertax
andexcisedutyapplicableininternational travel
(submittedtotheCouncilbytheCommission )
QL
C0MC79)694final

EXPLANATORY MEMORANDUM
Inaccordance withthecommitmententeredintoatthetimeof
adoptionoftheThirdCouncilDirective78/1032/EECof19December1978on
theharmonization ofprovisionslaiddownbylaw,regulationoradministra­
tiveactionrelatingtotherulesgoverningturnovertaxandexciseduty
applicableininternational travel(1),theCommissionhasexaminedthe
problemsarisingfromimplementation oftheDirectiveand,inparticular,the
changeswhichhaveoccurredinthelevelofthetax-freeallowanceforintra-
Communitytravellersexpressedinnationalcurrencies andtherealvalueof
suchallowances .
I.Leveloftheintra-Community tax-freeallowance '
TheCommission wouldpointoutthat,onthebasisofnational
currencyequivalents fortheEuropeanunitofaccountasat1October1979,
iftheautomaticadjustmentprocedureprovidedforinArticle7ofDirec­
tive69/169/EEC(asinsertedbyArticle4ofDirective78/1032/EEC)isfol­
lowed,someMemberStatescouldreducetheirallowances byamountsofupto
2.8However,inviewofthenon-adjustment optionprovidedforunder
paragraph4oftheaforementioned Article,suchadjustments arenotcompul­
sory.
TheCommissionhasfound,however,thattherehasbeenafallin
the'realvalueoftheallowances.Recentinformation showsthatthefallfor
theCommunityas.awholehasbeenabout10.4%overtheLasttwelvemonths.
TheCommissionregardsitasunacceptable thatthepeopleofthe
Communityshouldhavetoseetherealvalueofthetax-freeallowancesre­
duced;theyshouldratherbegrantedagradualincreaseinsuchallowances
soastoachievetheobjectiveslaiddownintheDirectives.
Inthisconnection,theCommissionwouldunderlinetherolewhich
tax-freeallowancescanplayintheinterpenetration ofMemberStates*eco­
nomies. ' ~
(1)0Jn°L366of28.12.1978,p.28

%
Itwasalsowiththisinmindthattheprincipleofaprogressive
extensionoftax-freeconcessions wasenvisagedintheCouncilResolutionof
22March1971ontheattainment bystagesofeconomicandmonetaryunion(1).
Similarly,thefourthmedium-term economypolicyprogramme,adopted
byCouncilDecisionon14March1977(2),statesthat,aspartofthemeasures
tobetakentofightinflationintheCommunity,consumersshouldbegiven
increasedopportunities ofpurchasing wheretheywantto,inotherCommunity
countriesinparticular,inviewofthepricedifferences whichexistfromone
countrytoanotherforindentical orsimilarproducts,goingconsiderably
beyondvariations intaxationorthestructureoftrade.
Inthelightofallthefactorssetoutabove,theCommissionthere­
foreproposesthatintra-Communitytax-freeallowances shouldbe.increased as
followsin1980:
-anincreasefrom180EUAto210EUAintheallowancegrantedtotravellers
offifteenyearsofageorolder;
-anincreasefrom50EUAto60EUAintheminimumallowancegrantedtotra­
vellersunderfifteenyearsofage.
II.Derogations
Derogations grantedtoDenmarkandIrelandunderArticle5of
Directive 78/1032/EEC'allowthem,withingiventimelimits,toexcludefrom
taxexemptiongoodswhoseunitvalueisinexcessof135EUAand77EUArespec­
tively.
Unlessappropriate adjustments aremadetotheunitvaluelimitsin
thesederogations grantedtoDenmarkandIreland,theirrealvaluewillbe
altered,andtheyshouldtherefore beincreasedinthesameproportion as
intra-Community tax-freeallowances . ,
Moreover,inthecaseofIreland,therecentincreaseinthestan­
dardrateofVATintheUnitedKingdomandthereduction,from1March1979,
oftheIrishrateofVATapplicabletocertainelectrical goodsmustbetaken
intoaccount.Theeffectofthesemeasureshasbeentoconsiderably reduce
(1)0Jn°C28of27.3.1971,pointIII,paragraph 2,lastindent.
(2)0Jn°L101of25.4.1977,PartThree,B,<d),paragraph 104,p.23

-3-
thegapbetweenretailpricesofcertainsensitivegoodsliabletothe
standardratesoftaxinbothcountriesand,inconsequence,theincentive
whichmayhaveexistedhithertofortravellerstobuygoodsintheUnited
KingdomratherthaninIreland.
Muchthesamehashappenedwithregardtothederogationgranted
toDenmark,asaresultoftheincreaseintheVATratesapplicableinthe
FederalRepublicofGermany,thoughthereductionintheratedifferential
betweenthesetwocountriesislessappreciable thaninthecaseofIreland
andtheUnitedKingdom.
Inaddition,accountmustbetakenofthemonetaryrealignment
whichtookplaceattheendofSeptember,whentheGermanmarkwasrevaluedab.out
by2%andtheDanishkronedevaluedby3%,makingGermangood^5%more
expensiveforDanishpurchasers .
For^hesereasons,theCommissionconsidersthattheeconomic
situationwarrantingthesederogations hasdevelopedalongfavourablelines
andproposesthat,asfrom1January1980,thelevelsforapplication ofthe
derogations forthesetwoMemberStatesshouldberaisedandthat,,within
thetimelimitsstipulatedinArticle5ofDirective78/1032/EE£Denmarkand
Irelandshouldbeauthorizedtoexcludefromtaxexemptiongoodswhoseunit.
valueisinexcessof160EUAand100EUArespectively .
III.Expressionofalcoholicstrength
InordertocomplywiththeprovisionsofDirective76/766/EECon
alcoholometry,whichmustbebroughtintoforcebyMemberStatesby1January
1980atthelatest,theCommissionproposesthat,asfromthatdate,alco­
holicstrengthsintheDirectiveunderdiscussionbeexpressedintermsof
"%vol"(percentagebyvolume).
Thisamendmentwillentailonlyatechnicalchange.

H
ProposalforaFifthCouncilDirectiveontheharmonization of
provisionslaiddownbylaw,regulationoradministrative action
relatingtotherulesgoverningturnovertaxandexciseduty
applicableininternational travel
THECOUNCILOFTHEEUROPEAN COMMUNITIES,
HavingregardtotheTreatyestablishing theEuropeanEconomicCommunity,
andinparticularArticle99thereof.
HavingregardtotheproposalfromtheCommission,
HavingregardtotheOpinionoftheEuropeanParliament,
HavingregardtotheOpinionoftheEconomicandSocialCommittee,
Whereasintra-Community tax-freeallowances contributetotheinterpenetra­
tionofMemberStates'economies;
Whereas,initsDecisionadoptingthefourthmedium-terra economicpolicy*
programme (1),theCouncilconsideredthat,inthecontextofmeasuresto
fightinflation,consumersshouldbegivenincreasedopportunities ofpur­
chasingwheretheywanttointheCommunity;
Whereas,inordertoachievetheseobjectives andintheinterestsofthe
peopleoftheMemberStates,thevalueoftheexemptionslaiddownby
Article2ofDirective69/169/EEC(2),asamendedbyDirective78/1032/EEC(3),
shouldbeincreased;
Whereasthetemporaryderogations grantedtotheKingdomofDenmarkandto
IrelandunderArticle5(1)oftheabovementioned Directive 78/1032/EECshould
alsobeamendedinviewofthechangesintheeconomicsituationwarranting
thesederogations ;
Whereasforexpressions ofalcoholicstrengthitisnecessarytotakeaccount
oftheprovisionsofDirective 76/766/EEC(4)ontheapproximation ofthe
lawsoftheMemberStatesrelatingtoalcoholtables,
HASADOPTEDTHISDIRECTIVE :
./.
(1)OJn°L101,25.4.1977
(2)OJn°L133,4.6.1969,p.6
(3)OJn°L366,28.12.1978,p.28
(4)OJn°L262,27.9.1976,p.149

-2-
P:^ - 1
Article 1
Article2ofDirective69/169/EECisherebyamendedasfollows:
a)inparagraphs 1and3,"180Europeanunitsofaccount"shallbereplaced
by"twohundredandtenEuropeanunitsofaccount".
b)inparagraph2,"50Europeanunitsofaccount"shall'bereplacedby
"sixtyEuropeanunitsofaccount".
Article2
Article5ofDirective78/1032/EECisherebyamendedasfollows:
Inparagraph 1,"135EUA"and"77EUA"shallbereplacedby"onehundred
andsixtyEuropeanunitsofaccount"and"onehundredEuropeanunits
ofaccount"respectively . -
Article3
Articles4and5ofDirective 69/169/EECandArticle 1ofDirec­
tive77/800/EEC(1)areherebyamendedasfollows:.
"22°"shallbereplacedby"22%vol".
Article4 -
1.MemberStatesshallbringintoforcethemeasuresnecessary
withthisDirectivewitheffectfrom1January1980.
2.MemberStatesshallinform'the Commissionoftheprovisions
adopttoimplementthisDirective.
Article5
ThisDirectiveisaddressedtotheMemberStates.
,FortheCounciI
ThePresidenttocomply
whichthey
(1)0Jn°L336,27.12.1977,p.21