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DOCUMENTS "COM"
COM(82)885
Vol.1982/0269

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COMMISSION OFTHEEUROPEAN COMMUNITIES
COM(82)885 final
Brussels,17January1983
REPORTFROMTHECOMMISSION TOTHECOUNCIL
onthetransitional provisions applicable underthecommon
systemofVAT,submittedinaccordance withArticle28ofthe
SixthCouncilDirectiveof17May1977
a
C0M(82)885final

C®Mm5
SoastofacilitatethemovetowardsUnefinalformofthecommonsystem
ofVAT,Article28oftheSixthDirectivelaysdownanumberoftransitional
provisionsrelatingto:
I.Article28(2)
1.maintenanceofreducedratesandexemptionswithrefundofinput
tax(zercr-rating);
II.Article28(3)
1.thefreedomtocontinuetotaxtransactions whichwillhavetobe
exemptunderthefinalarrangements ;
2.thefreedomtocontinuetoexempttransactions whichwillhaveto
betaxedunderthefinalarrangements ;
3.thefreedomtomaintainorgranttherighttooptfortaxation;
4*thefreedomtoderogatefromtheprincipleofimmediatededuotion;
5.thefreedomtoderogatefromthearrangements whereby
suppliesaretreatedastaxabletransactions andcertainamounts
reoeivedarenotincludedinthetaxableamount;
6.thefreedomtotakethedifferencebetweenthesellingpriceand
thepurohasepriceasthetaxableamountforcertainrealproperty
transactions ;
7.thefreedomtocontinuetoexemptwithoutrepaymentofinputtax
theservicesoftravelagents.
Thesevariousprovisionswilleachbeexaminedinturn.
I-MAINTENANCE OFREDUCEDRATESANDEXEMPTIONS WITHREFUNDOFINPUTTAX
(Article28(2))
Article28(2)allowstheMemberStatestomaintainatthelatestuntil
fiscalfrontiersbetweenMemberStatesareabolished"reducedratesand
exemptionswithrefundofthetaxpaidattheprecedingstagewhichare
inforceon31December1975»andwhichsatisfytheconditionsstatedin
thelastindentofArticle17oftheSecondCouncilDirectiveof
11April1967".
Thisreferenceto"theSecondDirectivemeansthatsuchratesmaybe

-χ.-
maintained "forclearly defined social reasons andforthebenefit ofthe
final consumer "and "where the total incidence ofsuch measures does not
exceed that ofthereliefs applied under thepresent system ".
With regard toreduced rates ,ifonesupposes (anecessarily arbitrary
assumption )that only rates ofless than 5$mayentail refund ofinput
tax ,itisevident that ,on31December 1975 »only Luxembourg andthe
Netherlands hadmade use ofthis derogation .
Reduced rates ofless than 5i°were subsequently introduced inItaly ;the
Commission hastoverify whether they comply with thebasic rules laid
down intheSixth Directive ,under which each reduced rate must beso
fixed that theamount ofvalue added taxresulting from theapplication
thereof issuch asinthenormal waytopermit thededuction therefrom of
thewhole ofthevalue added taxdeductible under theDirective
("compensation rate"rule ).
However ,themain problem isthat ofzercr-rating .
Annex Itothis report lists thecases ofzero-rating inforce on
1October 1982 byMember State .Alook atthis list shows that thescope
ofzero–rating iscompletely different ineach ofthefive Member States
inwhich itisapplied .InBelgium ,Denmark andItaly ,zero-rating involves
only arelatively small part oftheVATbase ,while inIreland andthe
United Kingdom itinvolves more than onethird (some 33$ofconsumption
byhouseholds inIreland andsome 35?^intheUnited Kingdom isrelieved
ofVATthrough aero-rating ).InBelgium ,Denmark andItaly zercr-rating
isgenerally simply anadhocmeasure introduced inspecific instances
with limited objectives inmind (forexample ,inorder toreduce costs
forthepress );inIreland andtheUnited Kingdom ,thelarge-scale useof
zero-rat ingreflects ataxpolicy which isbeing pursued forhistorical ,
political andsocial reasons that arenoteasy todismiss ,especially
psychologically ,despite theeconomic andtechnical considerations setout
below .
•h„hadtocheck whether certain cases ofzero-rating conformTheCommission hashadtoc &T.+.Sr>.le28oftheSixth VAT
against three Member
atthepreceding staga ,zer systemoftaxation ,andwith
in or z™
regard toComisunity harmonization in

–atnationallevel,thecompleteremissionoftaxforaneconomicsector
"bymeansofzero-ratinginevitablyincreasestheburdenofVATonsectors
whicharesubjecttoitandthusaggravatesthedistortionscreatedby
differentialratesintheallocationofresources;
–atCommunitylevel,ifacategoryofactivitiesiszero–ratesinone
MemberState,tradersinthesamesector,orconsumers,willclaimthe
samebenefitinotherMemberStates;
–intermsofmanagement,therefundswhichhavetobemadetotaxable
personsasaresultofzero-ratingentailhighadministrative costs,
whicharenotinanywayoffsetbyrevenue;
–asregardsthecollectionofVATownresources,zeror-ratingatnational
levelnotonlytendstoweakentheverynotionofownresourcesbymaking
itneoessarytoprovideforfinancialcompensation ,butalsodisruptsthe
taxlinkwhichownresourcesaresupposedtoestablishbetweentaxpayers
andtheCommunity *
Asregardsthesocialjustification ofzero-rating ,whichisthatthe
remissionoftaxforlargecategoriesofgoodsandservicesregardedas
beingbasicnecessities(food,clothing,medicines,publictransport,etc.,)
allowsasignificantreductioninthetaxburdenontheleastwell-off
sectionsofsooiety,itshouldbenotedthatseveralstudiesonthissubject
haveconcludedthatevenverywideapplicationofthismeasureprovides
onlyaslightbenefittolow–incomegroups,agrowingproportionofwhose
expenditureisongoodsorservicesthataresubjecttothestandardrate
orindeedtoanincreasedrate*
Therearethereforegroundsforwonderingwhetheranactivesocialpolicy
ofgrantingaidsorsocialbenefitstopersonsreallyinneedofthem
wouldnotbemoreeffectivethanthisratherindiscriminate instrumentwhose
effectiveness isopentodoubt.
/•

InadoptingtheSixthDirective,theCouncilimplicitlyacceptedthe
Commission *sargumentsagainstmaintaining and,afortiori,extendingthe
useofzero-rating ,sinceArticle28providesthat:
–untiladatewhichshallbefixedbytheCouncil,actingunanimouslyonaproposal
bytheCommissionbutwhichshallnotbelatterthantheabolitionoffiscal
frontiers,MemberStatesmaycontinuetoapplyzerorateswhichsatisfythe
conditionsstatedinthesecondDirectiveandwhichwereinforceon31December1975}
–onthebasisofareportfrontthe*Commission,theCouncilmusteveryfiveyears
reviewthezerorafc«sappliedbyMemberStates./and,actingunanimouslyona
proposalfromtheCommission,mustwhereappropriateadoptthemeasuresrequired
to-ensuretheirprogressiveabolition. •
TheCommissionindicatesthefollowingpossiblewaysofprogressively
narrowingthescopeofzerorates.
InBelgium,DenmarkandItaly,theexistingzeroratescanprobablybe
abolishedwithoutunduedifficulty ,especiallyifdirectfinancial
assistancecouldbegranted,atleastonaprovisionalbasis,intheir
place.
InthecaseofIrelandandtheUnitedKingdom,theproblemisobviously
muchmoredifficult,sinceatpresentthewholeofthepopulationbenefits,
toadegreethatvarieswiththesocio-economic groupfromtheremission
oftaxonalargeproportionofconsumption .
Lookingattheproblemsimplyintechnicalterms,asolutionforIreland
andtheUnitedKingdomandonewhichwouldnecessarily havetobespread
overalongperiodmightbealongthefollowinglines:

-D-11
-gradual narrowing ofthescope ofzero-bating ,forexample byrestricting
itduring aninitial stage tofoodstuffs alone ,excluding clothing ,
footwear ,etc.,andthen ,during asecond stage ,tobasic foodstuffs
alone (bread ,milk ,meat ,etc.)}
-gradual increase inthetaxation ofthegoods andservices which would
thusbeexcluded fromthescope ofzercrrrating ;during aninitial period ,
therate oftaxcould besetatafairly lowlevel ,though onewhich
would besufficient toallow deduction ofinput tax("compensation rate");
subsequently ,this special ratewould beincreased tothelevel ofthe
reduoed rateorthestandard rateinoneormoreintermediate stages ;
-gradual reduction inthelevel oftherateorrates ofVAT,parallel to
theprocess ofnarrowing thesoope ofzercrrrating ,where aMember State
wished tomaintain thetotal yield ofVATatthesame level .Another
possibility would betokeepVATrates unchanged soastoprovide some
latitude forreducing theburden ofother direct orindirect taxes .
TheCommission envisages putting forward appropriate proposals on
theabove lines inlight ofthediscussion wich will beheld
onthis report intheCouncil .
II-OTHER TRANSITIONAL PROVISIONS
1-FREEDOM TOCONTINUE TOTAX TRANSACTIONS WHICH WILL HAVE TOBE
EXEMPT UNDER THEFINAL ARRANGEMENTS (Article 28(3)(a )and Annex E
totheSixth Directive )
2-FREEDOM TOCONTINUE TOEXEMPT TRANSACTIONS WHICH WILL HAVE TOBE
TAXED UNDER THEFINAL ARRANGEMENTS (Article 28(3)(b )andAnnex F
totheSixth Directive )
These twosorts ofderogation ,though producing opposite results ,will be
looked attogether ,since theway inwhich "they must betreated isdetermined
bythe same setofproblems .
Pursuant toArticle 28(3 )oftheSixth Directive ,Member States may ,during
thetransitional period initially setatfive years from 1January 1978 *
(a)oontinue tosubject totaxthetransactions exempt under Article 13or
15setout inAnnex EtotheDirective ;
(b)continue toexempt theactivities setoutinAnnex Funder conditions
existing intheMember State concerned .
Thetotal number ofderogations is15in "thecase ofAnnex Eand27inthe
case ofAnnex F.
./•

Thetwo-tablesgiveninAnnexIItothisreportindioatewhichMember
Stateshavemadeuseofeachoftheseoptions.
Abrieflookatthetablesshowsthatsomeoftheoptionsprovidedforin
AnnexEhavenotbeenusedbytheMemberStatesandarethusnolonger
available.Theseareasfollows:
E–8:theservicesofintermediaries relatingtothenegotiationof
creditguaranteesoranyotherseourityformoneyandthe
managementofcreditguarantees ;
E–13:thesupplyofgoodsandservicesrelatingtoaircraftusedfor
rewardoninternational routes:
UnderArtiole28(4)»thefreedomtocontinuetotaxornottotaxcertain
transactions isgrantedforatransitional periodoffiveyears.Before
theendofthisperiod,theCouncil,aotingonaproposalfromthe
Commission,mustdecideonthemaintenance orabolitionofthederogations .
Thederogations inquestionmaybedividedintothefollowingthree
categories,chieflyapplyingcriteriabasedonfinancialimpact:
a)–slightfinancialimpactofthederogation;
b)–relativelysignificantfinancialimpactofthederogation;

c)–very significant financial impact .
Thevarious derogations listed inAnnex E(exempt transactions under the
final soheme )mayhehorken down asfollows into these three categories :
A–slight impact B–moderate impact
E1
E3
E4E9(theservices of
intermediaries
relating to
transactions in
transfaable
securities )
E15(services of
travel agents for
journeys outside
theCommunity )
E5
E6C–serious impact
E2(services
supplied by
dental
technicians )
E7(services
supplied "by
public ratio
and television
bodies )
E11(supply of
buildings that
arenotnewly
constructed )(supply ofparcel
post services )
(services supplied
"byindependent groups
ofpersons )
(services linked to
sport orphysioal
education supplied
"bynon-profit -
making organizations )
(oultural services
supplied bybodies
governed bypublio
law)
(supply oftransport
servioes for sick
orinjured persons
byambulance )
E10(management of
investment funds )
E12(supply ofgoods
dispatched or
transported bya
purchaser notestablished
within theterritory of
thecountry ).
Thevarious derogations listed inAnnex P(taxed transactions under the
final scheme )maybebroken down asfollows !
A–slight impaot
P1(admission tosporting
events )
F3(supply ofservices by
means ofagricultural
machinery )
P4(supply ofgreyhounds
andthoroughbred horses )
P7(transactions carried out
byblind persons orwork­
shops fortheblind )B–moderate impact
P6(services supplied
byundertakers and
cremation services )
p12(supply ofwater by
public authorities )
p15(safekeeping and
management ofshares ,
etc. )C~serious impact
P2(services supplied by
authors ,artists and
members ofthe liberal
professions )
F3(telecommunications
services supplied by
public postal services )
P9(treatment ofanimals
byveterinary surgeons )

-8-
A-slightimpact
F8(supplyofgoodsand.
servicesforcemeteries
commemorating wardead)B-moderateimpact
P26(transactions concer­
ninggoldotherthan
goldforindustrialuse
P11(servicesofexpertsin
connection withinsurance
claims)
P13(managementofcreditand
creditguarantees)
F14(debtcollection)
F18(suppliesofgoodsand
servicesrelatingto
oommercialinlandwaterway
vessels)
F19(suppliesofsomeused
capitalgoods)
F20(suppliesofrecuperable
materialandfresh
industrialwaste)
F21(goodsforthefuellingand
provisioning ofprivateboats)
F22(goodsforthefuellingand
provisioning ofaircraftfor
privateuse)
F24(transportofgoodsonthe
RhineandMoselle)C-seriousimpact
F10(transactions of
hospitals)
F16(suppliesofbuildings
andland)
F17(passengertransport)
F23(suppliesofgoodsand
servicesrelatingto
aircraftusedbyState
institutions )
F25(suppliesofgoodsand
servicesrelatingto
warships)
P27(servicesoftravel
agentsrelatingto
journeyswithinthe
Community)
Itmaybeseenthatthenumberofderogationsfallingintoeachofthethree
categoriesisasfollows:
slightimpact
7ANNEXE
moderateimpact
2seriousimpact
3
slightimpact
14ANNEXF
moderateimpact
4seriousimpact
9

-9-
Thisbreakdownshowsthatthegreatmajorityofthederogations comeunder
theheading"slightimpact".Nevertheless,inAnnexF,thereisa
relativelylargenumberofderogationsinvolving"seriousimpact".
ThereissometendencyinMemberStatestoendthederogationsprovided
forinAnnexF,mainlyasaresultofthegrowingbudgetarydifficulties
whichmostofthemarefacing.Thesedifficulties shouldhaveafavourable
influenceonthestandardization ofthebasisofassessmentforVAT.
Indiscussingtheabolitionofthevariousderogations,anotherfactortobe
takenintoconsideration istheextenttowhichcompetitionisdistorted,
sinceanumberofthederogations doinfactgeneratedistortionsofcompe­
titionwithintheCommunity(forexample,thederogationrelatingtotrans­
actionsconcerninggold,thederogationrelatingtopassengertransportand
thoserelatingtotravelagents).
Irrespective ofthefinancialandcompetitivecriteriamentionedabove,
itshouldnevertheless beobservedthatcertainclassesofservicein
AnnexesEandFhaveanessentially socialcharacter.Thisisespecially
thecasewithsomeoftheclassesofservicesbelongtoAnnexF(principle
oftaxationatthedefinitive stage).,inparticular F6,7,8and10.
3-FREEDOMTOMAINTAIN ORGRANTTHERIGHTTOOPTFORTAXATION
(Article28(3)(c)andAnnexGtotheSixthDirective )
Soastoobviateormitigatetheeconomicdisadvantages causedbyexemptions,
severalMemberStatesmadelegislative provisionfortherighttooptfor
taxationincertainspecificcases.Therightsofoptioninrespectoftrans­
actionswhichwillinanycasehavetobetaxedattheendofthetransitional
periodarebeingmaintained onthebasisofparagraph1(b)ofAnnexGtothe
Directive;forthepurposesofthecommonsystemofVAT,suchoptionsshould .
notcauseanyparticulardifficulties .
Amuchmoredifferentiated viewmustbetakenoftheotherrightsof
optionallowedundertheDirectivebutrelatingtotransactions whichareor
willhavetobenormallyexempted:thiscategorycoverstherightsofoption
referredtoinparagraph 2ofAnnexG-whichwereallowedtobemaintained
"untilatthelatesttheendofthreeyearsfromthedatetheDirective comes
intoforce".
Bycontrast,paragraph1(a)ofAnnexGallowsMemberStatesfreedomto
maintainrightsofoptionrelatingtothetransactions specifiedinAnnexE,

-10-
i.e.transactions whichwiltinanycasehavetobeexemptedattheend
ofthetransitional period.Thisfreedom,whichisitselftransitional,
isdifficulttojustifyfromthepointofviewofthecommonsystemof
VAT.However,itshouldbenotedthatthecasesinwhichthisfreedomis
actuallyusedareexceptional andofminorimportance;itshouldtherefore
bepossibletoabolishthistransitional provisionfairlyrapidly.
4-FREEDOMTODEROGATE FROMTHEPRINCIPLE OFIMMEDIATE DEDUCTION (Article28(3)(d))
OnlyFrancehasmadeuseofthefreedomtoderogatefromtheprincipleof
immediatededuction.InFrance,theinputtaxongoodsnotconstituting
fixedassetsandonservicesisdeductedfromthetaxpayablebythe
taxablepersoninrespectofthemonthfollowingthatduringwhichthe
righttodeductionarose.
UnderFrenchlegislation,"fixedassets"includesgoodsofanynature
acquiredorproducedbyanundertakingforpermanentuseasworking
equipmentormeansofoperation (land,buildings,plant,transport
equipment,patents,licences,etc.).
Thistimelagofonemonthobviouslyaffectsthecashpositionoffirms,
whohavetofinancethetaxforalongerperiodthaninthenormalcase
whereimmediatedeductionisapplied.
Aroughcalculation basedonfiguresfor1974showedthattheadditional
economicburdenonFrenchfirmsamountedtoFF650million.
Thisfigurewouldhavetobemultipliedbyatleasttwotobringitupto
date,takingaccountoftheeffectsofinflationand,aboveall,therise
ininterestrates.Thefigureisofcourseapproximate,butgivesa
fairideaofthecomparativedisadvantage whichthisruleimposesonFrench
firmscomparedwithfirmsinotherMemberStatesinwhichimmediatededuc­
tibilityisthegeneralrule.
Theabolitionofthisderogationcouldbeaccompanied bytechnical
arrangements designedtospreaditseffectsovertime.

-11-
~FREEDOMTODhRQuATEFROMi"Ht_ARRANGEMENTSWf-ibRtBYCERTAINSUPPLIESARE
TREATEDASTAXABLETRANSACTIONS ANDCERTAINAMOUNTSRECEIVEDARENOT
INCLUDEDINTHETAXABLEAMOUNT(Article28(3)(e))
Thisinvolvesthreesortsofderogationwhichmaybeappliedduringthe
transitional period:
(a)derogationfromArticle5(A)(c),i.e.therightnottoconsider
assupplies"thetransferofgoodspursuanttoacontractunderwhich
commissionispayableonpurchaseorsale";
(b)derogationfromArticle6(4),i.e.therightnottoconsidercertain
personstakingpartinasupplyofservicesashavingreceivedand
suppliedsuchservicesthemselves;
(c)derogation fromArticle11A(3)(c),i.e.therighttoincludeinthe
taxableamountoftaxabletransactions repaymentsforexpensespaid
outbythesellerfortheaccountofthepurchaser.
Thesederogations aremadeuseofinnationallegislations inthefollowing
manner :
-allthreecasesinFrenchlegislation;
-(b)and(c)inDanishlegislation;
-(a)and(b)inUnitedKingdomlegislation .
Giventheverylimitedextenttowhichuseismadeofthesederogations
withintheCommunityabolishing themisunlikelytocreateanymajordiffi­
culties.
6-FREEDOMTOTAKETHEDIFFERENCE BETWEENTHESELLINGPRICEANDTHEPURCHASE
PRICEASTHETAXABLE AMOUNTFORCERTAINREALPROPERTY TRANSACTIONS
(Article28(3)(f))
Thisprovision,whichcovers"suppliesofbuildings andbuildinglandpur­
chasedforthepurposeofresalebyataxablepersonforwhomtaxonthe
purchasewasnotdeductible",mainlyappliestotaxablepersonsdealingin
buildingsthatarsnotnewly'constructed orinlandwhoseacquisition
layoutsidethescopsofvalueaddedtax.

-12-
ThisfreedomtotaxonlythemarginisusedsolelyinFrance.However,
variousfactorsmustbetakenintoaccountinassessingthecaseforit:
-underthefinalsystem,thesupplyofbuildingsthatare
notnewlyconstructedwillbeexempt(Article13B(g));
-taxpayers maybeallowedtooptforthetaxationoftheabovementioned
supplyofbuildings (Article13C(b));
-manycountriescurrentlyexemptthesupplyofbuildinglandunder
thetransitional provisions (Article28(3)(b)andAnnexFtothe
SixthDirective);
-thisfreedommeetsthesameconcernsasthoseunderlyingtheproposalfor
aSeventhDirectiveonthecommonsystemofvalueaddedtaxtobeapplied
tousedgoods.
Consequently,theCommissionconsidersthatthisfreedomshouldbemaintained
aslongastheapplication ofVATtoimmovablepropertyisgovernedbytrans­
itionalprovisions.
7-FREEDOMTOCONTINUE TOEXEMPTWITHOUTREPAYMENT OFINPUTTAXTHESERVICES
OFTRAVELAGENTS(Article28(3>(g))
Thefreedomtoderogateduringthetransitional periodfromtheprovisions
ofArticles17(3)and26(3)concerningtravelagentsisusedinLuxembourg
(thoughnotinthecaseoftravelagentsactinginthenameandfortheaccount
ofthetraveller),IrelandandDenmark.
IntheNetherlands,thespecialschemefortravelagentsprovidesfor
exemptionofforeigntravelorganizedbysuchagents.Incertaincases,
however,theexemptiondoesnotexcluderepaymentofinputtax.
Thissortoffreedommerelyaddsafurtherderogationtothosealready
includedinAnnexE(point15)andAnnexF(point27)totheSixthDirective
andmentionedpreviouslyunderpoints2and3ofthisreport.
TheCommissionwouldunderlinetheparadoxicalnatureofthissituationduring
thetransitional period,theCouncilhavingseenfittoprovidefor
aspecialschemefortravelagents,setoutinArticle26oftheSixth
Directive.

-13-
Theonlyprogresswhichhas"beenachievedinthismatteristhata
uniformplaoefortaxationandtaxableamounthavebeendetermined,but
progressisslimifonebearsinmindthatsomemembercountriescontinue
totaxtheremuneration whichtravelagentsreceiveforjourneysmade
outsidetheCommunity(thisisthecaseinGermanyandBelgium),whereas
othermembercountriescontinuetoexempttheremuneration whichtravel
agentsreceiveforjourneysmadewithintheCommunity(thisisthecase
inDenmark,France,IrelandandtheNetherlands).
Sinoetheestablishment ofagenuinecommonsystemofVATinrespect
oftheactivitiesoftravelagentsisamatterofconsiderable importance,
notonlyinthecontextoftaxharmonization ,butalsoandes-peoiallyfrom
thepointofviewofotherCommunitymeasuressuchasthedriveto
developtourism ,itisdesirablethatthesederogations shouldbeabolished
assoonaspossible,despitethedifficulties whichmightbeinvolved.

-y-f-
ANNEX I
ZCRO-RATING OFGOODSANDSERVICESINMEMBERSTATES'VAT
LEGISLATION
(Situationat1July1982)

-/S -
ANNEX I
Some Member States apply zero-rating within thecountry tothe
following transactions :
ITALY
-The supply ofdaily nei^apers ;
-the supply ofland not liable tobeused asbuilding land ;
-thesupply ofpasta products ,bread andmilk ofakinfJ used forhuman con­
sumption (1);
-certain transactions carried out inconnection with assistance tovictims
ofearthquakes inthe south ofItaly (temporary measure fortheperiod from
1.1.1981 to31.12.1981 ,extended until 31.12.1982 andauthorized bythe
Council (2).
BELGIUM
-The supply ofdaily andweekly newspapers .
IRELAND (3)
-Thecarriage ofgoods intheState inexscution ofacontract totransfer
thegoods toaplace outside theState ;
-animal feeding stuff (excluding feeding stuff fordomestic pets );
-fertilizer which issupplied inunits ofnot less than 10kilograms ;
-services provided bytheCommissioners ofIrish Lights ;
(1)Zero-rating introduced after 31.12.1975 .Infringement proceedings ini­
tiated bytheCommission .
(2)Decision 81/890/EECof3.11.1981 (0JNoL322,11.11.1981 ,p.40),
Decision 82/424/EECof21.6.1982 (0JNoL184,29.6.1982 ,p.26).
(3)Some oftheitems listed arebeing examined toseewhether they comply
with theprovisions ofArticle 28(2 ).

-Sé­
-foodanddrinkofakindusedforhumanconsumption (excludingcertain
productssuchasalcoholicbeverages,manufactured beverages,icecream
andconfectionery );
-medicineofakindusedforhumanoralconsumption ;
-medicineofakindusedforanimaloralconsumption (excludingmedicine
fordomesticpets);
-seeds,plants,trees,etc.,ofakindusedinordertoproducefood;
-books(excludingnewspapers,periodicals,catalogues,etc.)(1);
-articlesofpersonalclothingandfootwear(excludingarticlesofclothing
madeoffurskin);
-fabricsandotherarticlesofakindusedinthemanufacture ofclothing;
-invalidcarriage,crutches,orthopaedic appliances andotherartificial
partsofthebody(excludingartificial teeth)(1);
-soleandupperleatherofakindsuppliedforthemanufacture andrepair
offootwear,heels,etc.;
-coal,gas,electricity,candlesBndhydrocarbon oiIofakindusedfor
heatingorlighting.
UNITEDKINGDOM (2)
-Foodofakindusedforhumanconsumption andanimalfeedingstuffs,with
theexceptionofcertainpreparedproductssuchasicecream,chocolates,
manufactured beveragesorbeverageschargeable withanyexciseduty,and
petfoods;
-seedsorothermeansofpropogation ofplantscomprisedintheabovepara­
graph;
(1)Zero-rating introducedafter31.12.1975 .Infringement proceedings ini­
tiatedbytheCommission .
(2)Someoftheitemslistedbelowarebeingexaminedtoseewhetherthey
complywiththeprovisions ofArticle28(2).

Liveanimalsofakindgenerallyusedas,oryieldingorproducing,food
forhumanconsumption ;
sewageservices;
waterotherthandistilledwater;
books,newspapers,journals,periodicals,music,maps,etc.;
thesupplyofmagnetictapeandtaperecorderstotheRoyalNational
InstitutefortheBlind;
thesupplytoacharityofwirelessreceivingsetssolelyforgratuitous
loantotheblind;
thepublication inanynewspaper,journalorperiodicalofanyadvertise­
ment,andthesupplyofservicesforthepurposeofsecuringsuchapubli­
cation;
thesupplyofinformation tonewspapers ;
coal,gas,electricity ,hydrocarbonoil(exceptthatonwhichacustoms
orexcisedutyhasbeenoristobecharged);
construction ofbuildings (i.e.thegranting,byapersonconstructing
abuilding,ofamajorinterestinthebuilding,andthesupply,inthe
courseoftheconstruction ,alteration ordemolition ofanybuilding,of
anyservicesotherthantheservicesofanarchitect,etc.);
thesupply,byapersonsupplyingtheservicesmentioned above,ofcertain
materials,excludinganyworkofrepairormaintenance ;
thetransportofpassengersinanyvehicle,shiporaircraftcarryingnot
lessthan12passengers,orbythePostOffice,oronanyscheduledflight
thetransportofpassengersorfreighttoorfromaplaceoutsidethe
UnitedKingdom;
thesupplyofcertaincaravans;
drugs,medicines,medicalandsurgicalappliances,etc.(excludinghearing
aids,dentures,spectacles,etc.);
thesupplybyacharityofanygoodswhichhavebeendonatedforsale;
articlesdesignedasclothingorfootwearforyoungchildren;
protectivebootsandhelmetsforindustrial use.

-ir-
DENMARK
-Thesupplyofnewpaperspublishedatleastonceamonth;
-thetransportation withinthecountryofgoodscomingfromaforeign
country;
-subscriptions forforeignperiodicals fromaforeignpublisher onbehalf
ofasubscriber .

ANNEX II
Temporaryderogations fromtherulesonexemptionor
taxationLaiddownintheSixthVATDirective
TableNo.1:Temporaryderogations fromtherulesonexemption
(AnnexEtotheSixthDirective )
TableNo.2:Temporaryderogations fromtherulesontaxation
(AnnexFtotheSixthDirective )

–<o-
ANNEXII
TableNo1
TRANSACTIONS REFERRED TOINANNEX .E.
(EXEMPTTRANSACTIONS UNDERTHEFINALSCHEME)COUNTRIES THATHAVE
MAINTAINED TAXATION
1.Parcelpostservices Denmark
2.Servicessuppliedbydentaltechnicians ;thesupply
ofdentalprosthesesGermany
Belgium
Ireland
3.Servicessuppliedbyindependent groupsofpersons
exemptfromornotsubjecttoVATBelgium
France
Luxembourg
Ireland
4.Serviceslinkedtosportorphysicaleducation
suppliedbynon-profit-makingorganizationsGermany
UnitedKingdom
5.Culturalservicessuppliedbybodiesgovernedby
publiclawDenmark
Ireland
UnitedKingdom
6.Thesupplyoftransportservicesforsickor
injuredpersonsinambulancesFrance
UnitedKingdom
7.Thesupplyofservicesbypublicradioandtele­
visionbodiesDenmark
Italy
8.Thesupplyofservicesbyintermediaries relating
tothenegotiation ofcreditguarantees orany
othersecurityformoneyandthemanagementof
creditguarantees–
9.Thesupplyofservicesbyintermediaries relating
totransactions intransferable securitiesUnitedKingdom
10.Managementofinvestment funds Ireland
UnitedKingdom
11.Thesupplyofbuildingsthatarenotnewlycons-
tructedDenmark
France(estateagents)
Ireland
Italy
Netherlands (onoption
accordingtocriteria
priortotheSixthDirec­
tive)
12.Thesupplyofgoodsdispatched ortransported by
apurchasernotestablished withintheterritory
ofthecountryDenmark
Ireland

-Χ/-
TableNo1
(continued )
TRANSACTIONS REFERRED TOINANNEXE.
(EXEMPTTRANSACTIONS UNDERTHEFINALSCHEME)COUNTRIES THATHAVE
MAINTAINED TAXATION
13.Thesupplyofgoodsandservicesinrespectof
aircraft usedforrewardoninternational routes-
14.Goodssuppliedtoapprovedbodieswhichexport
themaspartoftheirhumanitarian activitiesDenmark
Ireland
15.Theservicesoftravelagentsforjourneysout­
sidetheCommunityGermany
Belgium
Luxembourg

Table2
TAXEDTRANSACTIONS UNDERTHEFINALSCHEME
(TRANSACTIONS REFERREDTOINANNEXF)COUNTRIES THATHAVE
MAINTAINED EXEMPTION
1.Admissiontosportingevents Denmark
France
Ireland
Luxembourg
2.Servicessuppliedbyauthors,artistsandmembers
oftheliberalprofessionsBelgium
Denmark
France
Netherlands
3.Supplyofservicesbymeansofagricultural machi-
neryFrance
4.Supplyofgreyhounds andthoroughbred horses Ireland
5.Telecommunications servicessuppliedbypublic
postalservicesGermany
France
Ireland
Italy(onlytelegraph )
Luxembourg
Netherlands
6.Servicessuppliedbyundertakers andcremation
servicesDenmark
Ireland
Italy
Netherlands
UnitedKingdom
7.Transactions carriedoutbyblindpersonsor
workshopsfortheblindGermany
Denmark
France
Netherlands
8.Thesupplyofgoodsandservicesforcemetries,
etc.commemorating wardeadBelgium
France
Luxembourg
9.Treatmentofanimalsbyveterinary surgeons Belgium
Netherlands
Ireland
10.Transactions ofhospitals Belgium,Irelandandthe
UnitedKingdomexempt
thewholeofthissector,
butconsiderthatthe
exemptionfallsunder
Article13
11.Servicesofexpertsinconnectionwithinsurance
claimsFrance
Netherlands

-<Z<2-
Tableno.2
(continued )
TRANSACTIONS REFERRED TOINANNEXF
(TAXEDTRANSACTIONS UNDERTHEFINALSCHEME)COUNTRIES THATHAVE
MAINTAINED EXEMPTION
12.Thesupplyofwaterbypublicauthorities France
Ireland
Luxembourg
13.Management ofcreditandcreditguarantees Denmark
Germany
Luxembourg
14.Debtcollection -
15.Thesafekeeping andmanagement ofshares,etc. Denmark
Germany
Luxembourg
16.Suppliesofnewbuildings andbuildingLand Belgium
Denmark
Germany
Luxembourg
17.Passengertransport VirtuallyallMember
States,butinparti­
cular:Denmarkand
Ireland
18.Thesupplyofgoodsandservicesrelatingto
commercial inlandwaterwayvesselsBelgium
19.Suppliesofsomeusedcapitalgoods franee
20.Suppliesofrecuperable materialandfreshindus­
trialwasteBelgium
France
t
21.Goodsforthefuellingandprovisioning ofprivate
boatsproceeding outsidethenationalterritoryUnitedKingdom
22.Goodsforthefuellingandprovisioning ofair­
craftforprivateuseUnitedKingdom
23.Thesupplyofgoodsandservicesrelatingtoair­
craftusedbyStateinstitutionsBelgium
Denmark
Italy
24.ThetransportofgoodsontheRhineandthe
canalized MoselleFrance
25.Thesupplyofgoodsandservicesrelatingto
warshipsBelgium
Denmark
Italy
Netherlands

TableNo.2
(continued )
TAXEDTRANSACTIONS UNDERTHEFINALSCHEME
(TRANSACTIONS REFERRED TOINANNEXF)COUNTRIES THATHAVE
MAINTAINED EXEMPTION
26.Transactions concerning goldotherthangold
forindustrial useFrance
Luxembourg
27.Theservicesoftravelagentsforjourneyswithin
theCommunityDenmark
France
Ireland
Netherlands