NoC 151/6 Official Journal of the European Communities 9.6.83 
II 
(Preparatory Acts) 
COURT OF AUDITORS 
OPINION 3/82 
of the Court of Auditors of the European Communities on a proposal for a Council 
Regulation amending and extending the terms of validity of Regulation (EEC, Euratom, 
ECSC) No 2892/77 implementing in respect of own resources accruing from value added 
tax the Decision of 21 April 1970 on the replacement of financial contributions from 
Member States by the Communities' own resources 
THE COURT OF AUDITORS OF THE 
EUROPEAN COMMUNITIES, 
Having regard to the Treaty establishing the 
European Coal and Steel Community, and in 
particular Article 78f thereof, 
Having regard to the Treaty establishing the 
European Economic Community, and in particular 
Article 206a thereof, 
Having regard to the Treaty establishing the 
European Atomic Energy Community, and in 
particular Article 180a thereof, 
Having regard to Council Decision 70/243/ECSC, 
EEC, Euratom of 21 April 1970 on the replacement 
of financial contributions from Member States by the 
Communities' own resources ('), hereinafter referred 
to as 'the Decision' of 21 April 1970, and in 
particular Article 6 (2) thereof, 
Having regard to the proposal from the Commis­
sion (2), 
Whereas the Council decided, on 26 July 1982, to 
consult the Court of Auditors on this proposal; 
Whereas Article 14 of Regulation (EEC, Euratom, 
ECSC) No 2892/77 (3) — hereinafter referred to as 
'the Regulation' — states that the Regulation shall 
apply from 1 January 1978, for a transitional period 
expiring on 31 December 1982; 
Whereas, because of the delay in the entry into force 
in the Member States 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 the value added tax: 
O OJ No L 94, 28. 4. 1970, p. 19. 
O OJ No C 200, 4. 8. 1982, p. 12. 
O OJ No L 336, 27. 12. 1977, p. 8. uniform basis of assessment (4),- the Commission has 
not had the benefit of the five-year transitional period 
laid down by the Council for establishing provisions 
relating to the definite uniform system for levying 
VAT own resources and the detailed rules for its 
implementation, 
HAS ADOPTED THE FOLLOWING OPINION: 
PART 1 
General observations 
1.1. The Court observes that the Regulation was 
intended to apply for a transitional period of five 
years expiring on 31 December 1982 when a 
definitive uniform system for levying VAT own 
resources would be brought into effect. 
1.2. The delay in entry into force of the Sixth 
Council Directive led to delayed implementation 
arrangements, and accordingly the Commission has 
not yet had the benefit of the expected five-year 
experience in these arrangements and it is on these 
grounds that the Commission has proposed to extend 
the transitional arrangements until 31 December 
1985. The Court regrets the continuation of 
arrangements that are of a transitional nature, and 
trusts that the Commission will use this longer period 
to ensure that a definitive system will be introduced 
from 1 January 1986, without further delays. 
1.3. During the transitional period, Member States 
are allowed to choose between two methods of 
assessment — the returns method or the revenue 
method, as described in Sections A and B respectively 
of the Regulation. The Court recommends an early 
evaluation of the advantages of the alternative 
methods so that the Commission will be able to 
produce reasoned arguments for the adoption by 1 
January 1986 of a uniform system for levying VAT 
own resources. 
(4) OJNoL 145, 13.6. 1977, p. 1. 
9.6.83 Official Journal of the European Communities NoC 151/7 
1.4. In this respect, the Court refers to its opinion 
on a proposal for a Council Regulation amending the 
Financial Regulation of 21 December 1977 applicable 
to the general budget of the European Communi­
ties (1). Amendment of the Regulation (particular to 
VAT own resources) and development of the eventual 
definitive Regulation have a relevance to the Financial 
Regulation, and the Court must repeat its view that 
ideally these should be reviewed concurrently. 
1.5. The practical application of the Regulation has 
already revealed weaknesses in the transitional 
arrangements and the Commission has proposed 
amendments to certain of the Regulation's present 
provisions. The Court has considered these proposals 
with a view to seeking such improvements as can 
reasonably be introduced at this stage. Its opinion 
with regard to the detailed Articles is given in Part 2 
hereof. 
(') OJ NoC 232, 11.9. 1981, p. 1. PART 2 
Introductory note 
2.1. The left-hand column contains only those 
Articles for which the Court has suggested 
amendments. The text given is either that of the 
present Regulation, as amended by the Commission's 
proposals, or the present text if no proposals applies. 
2.2. The middle column states the Court's 
proposed amendment, justified by the reasons in the 
third column. 
2.3. Where the amendment of the Court relates to 
a single paragraph, only that paragraph has been 
included, unless others are needed to understand the 
amendment. The proposed amendments of the 
Commission and of the Court are printed in italic and 
bold type respectively. 
2.4. The opinion concludes with a general remark 
(2.6) that the Regulation should be consistent in its 
references to the period concerned. 
NoC 151/8 Official Journal of the European Communities 9. 6. 83 
2.5. Proposed amendments to Regulation (EEC, Euratom, ECSC) No 2892/77 
Commission proposal Amendments proposed by the Court of Auditors Reasons 
Article 4 (part): 
3. Without prejudice to Article 9, the 
data relating to the above taxable am­
ounts shall be established from the re­
turns made by the taxable persons, 
drawn up in accordance with Article 22 
(4) of Directive 77/388/EEC or by the 
persons liable for payment of the tax on 
importation, drawn up in accordance 
with Article 23 of the said Directive, or 
derived from the estimated assessment 
made by the competent authority of the 
Member State. 
Article 7: 
1. In order to calculate the weighting 
of the various rates as referred to in 
Article 6, the Member State shall break, 
down, by rate of VAT applied, all 
transactions which are taxable under its 
national legislation and which do not 
give rise to deduction of VAT in the 
hands of a purchaser or customer taking 
into account Article 17 of Directive 
77/388/EEC. 
The VA T rates used for the purposes of 
such calculation shall be those in force in 
the Member State for the year in question. 
Transactions which are subject, pursuant 
to Article 28 (2) of Directive 77/388/ 
EEC, to an exemption with reim­
bursement of the taxes paid at the 
previous stage shall be regarded as 
zero-rated transactions. 
2. The breakdown by rate of VAT shall 
be applied to the following statistical cate­
gories: 
(a) the following categories of transaction 
subject to non-deductible VA T: 
— final consumption of households, 
including consumption on the farm 
and direct sales by flat-rate farm­
ers, on the territory referred to in 
Article 3 of Directive 
77/388/EEC for the Member 
State in question, 
— intermediate consumption of 
general government, private non­
profit institutions, insurance 
enterprises and credit institutions, 
— gross fixed-capital formation of 
general government, private non­
profit institutions, insurance 
enterprises and credit institutions, Amend paragraph 3 to read: 
3. Without prejudice to Article 9, 
the data relating to the above taxable 
amounts shall be established from the 
returns made by the taxable persons, 
drawn up in accordance with Article 
22 (4) of Directive 77/388/EEC or by 
the persons liable for payment of the 
tax on importation, drawn up in ac­
cordance with Article 23 of the said 
Directive. If such returns arc not avail­
able or are incomplete in respect of any 
taxable person or category of persons, 
the data may be derived from the 
estimated assessment made by the 
competent authority of the Member 
States. 
Amend referenced paragraphs to read: 
— intermediate consumption of 
general government, private non­
profit institutions and insurance 
enterprises, 
— gross fixed-capital formation of 
general government, private non­
profit institutions and insurance-
enterprises, Normally taxable persons are required to 
make returns of their taxable income, 
and Method A is based on the use of 
these returns. The Court considers that 
the substitution of estimated assessments 
in such cases should be allowable only 
exceptionally, whereas the proposal of 
the Commission would have allowed 
Member States to use estimated 
assessments even if returns were avail­
able. 
Not all of the transactions undertaken 
within all of the categories listed under 
the Commission's proposed paragraph 
2 (a) are necessarily subject to non­
deductible VAT. 
9. 6. 83 Official Journal of the European Communities NoC 151/9 
Commission proposal Amendments proposed by the Court of Auditors Reasons 
(b) the following categories of transaction 
where they are subject to non­
deductible VAT: 
— intermediate consumption of 
non-financial corporate and quasi-
corporate enterprises, 
— gross fixed-capital formation of 
non-financial corporate and quasi-
corporate enterprises; 
(c) transactions corresponding to the sale 
of building land. 
Article 10 (part): 
3. Any corrections to the basis shall 
be allocated to the financial year during 
which they are made. 
Article 10 (a): 
Member States shall forward to the 
Commission by 30 April each year an 
estimate of the VAT own resources basis 
for the following financial year. They shall 
inter alia give an estimate of the basis of 
assessment for each of the categories of 
transaction referred to in Article 5 (2) and 
(3) and Articles 8 and 9 (1) to (4). 
Article 10(b): 
1. Corrections to the summary account 
referred to in Article 10 (1) shall be made 
by the Commission and shall be incor­
porated in a summary estimate adopted on 
30 June. 
The Commission may, however, by 
reasoned decision, call on Member States 
to make such corrections within three 
months. 
2. No further corrections may be made 
to the annual summary account referred to 
in Article 10 (1) after three years have 
elapsed from the end of a given financial 
year, unless they concern points previously 
notified either by the Commission or by 
the Member State concerned. (b) the following categories of 
transaction where they are subject 
to non-deductible VAT: 
— intermediate consumption of 
non-financial corporate, quasi-
corporate enterprises and credit 
institutions, 
— gross fixed-capital formation of 
non-financial corporate, quasi-
corporate enterprises and credit 
institutions. 
Amend paragraph 3 to read: 
3. Amounts collected which derive 
from any corrections to the basis shall 
be allocated to the financial year 
during which they are received by the 
Community. 
Amend paragraphs 1 and 2 of the new 
Article 10 (b) to read: 
1. Corrections to the summary ac­
count referred to in Article 10 (1) may 
only be made within three years from 
the end of the calendar year in question 
unless they concern points previously 
notified either by the Commission or 
by the Member State concerned. They 
shall be made by the Commission in 
accordance with the procedures 
presented by the Commission to the 
Advisory Committee on the 
Communities' Own Resources, and the 
relevant Member State's summary ac­
count shall be revised by 30 June in 
each year during which corrections are 
made. 
The Commission may, however, by 
reasoned decision, call on Member 
States to implement such corrections 
within three months of the Member 
State being notified of this re­
quirement. Article 5 of the Financial Regulation of 
21 December 1977 states that 'the rev­
enue of a financial year shall be entered 
in the accounts for the financial year on 
the basis of the amounts collected during 
the financial year . . .'. The Court's 
proposed amendment brings corrections 
into line with this general principle. 
For the sake of clarity, it should be 
indicated that corrections are only al­
lowable within a prescribed time scale 
and within procedures already agreed 
unanimously between the Commission 
and Member States; and that they are to 
be summarized by 30 June annually 
during the period when they may be 
accepted. 
NoC 151/10 Official Journal of the European Communities 9. 6. 83 
Commission proposal Amendments proposed by the Court of Auditors Reasons 
Article 13 (part): 
2. Member States applying for the 
authorization provided for in Article 5 
(3) or 9 (3) shall refer their application 
to the Commission as soon as possible 
and not later than 30 April of the finan­
cial year from which the authorization is 
to apply. 
The Commission representative shall 
submit to the Committee as soon as 
possible a draft of the decision to be 
taken. The Committee shall discuss the 
matter within a period to be fixed by the 
chairman depending on the urgency of 
the matter. The opinions of the 
Committee members shall be recorded in 
a report which shall be approved by the 
Committee within a period of 60 days, 
which period shall start to run from the 
notification to the Committee of the 
draft decision. Amend subparagraph 2 to read: 
The Commission representative shall 
submit to the Committee as soon as 
possible, and not later than 31 
December after receipt of the ap­
plication, a draft of the decision to be 
taken. The Committee shall discuss the 
matter within a period to be fixed by 
the chairman depending on the 
urgency of the matter. The opinions of 
the Committee members shall be re­
corded in a report which shall be ap­
proved by the Committee within a 
period of 60 days, which period shall 
start to run from the notification to the 
Committee of the draft decision. The Commission's proposal to remove 
the 60-day time limit within which the 
Commission has at present to submit its 
draft, arises from the need to draw 
conclusions from the checks mentioned 
in Article 12. The Court, however, 
proposes that such conclusions should be 
finalized within the calendar year. 
2.6. General remark 
The Regulation as at present and in the proposals of the Commission refers variously to 
the reference year for the calculation of the VAT basis. Thus: 
Article 1, subparagraph 2 
Article 2 (3), subparagraph 1 
Article 3, subparagraph 1 
Article 6, subparagraph 1 
Article 7 (1), subparagraph 1 
Article 7 (4) 
Article 7 (7) 
Article 8 (2), subparagraph 2 
Article 10 (1), subparagraph 1 
Article 10 (2) 
Article 10 (3) 
Article 10 (a) 
Article 10 (b) (2) 
Article 11 (1) 
Article 12 (3) 
Article 13 (2) financial year 
financial year 
financial year 
given year 
year in question 
financial year 
financial year 
calendar year 
year in question 
calendar year 
calendar year 
financial year 
financial year 
financial year 
financial year 
given financial year 
financial year 
9. 6. 83 Official Journal of the European Communities NoC 151/11 
While the financial year applicable to Community accounting is the calendar year, this is 
not always the case with the national tax or financial years. The Court is of the opinion 
that the term 'calendar year' should be used consistently in all references. 
This opinion was adopted by the Court of Auditors in its meeting of 16 November 1982. 
Done at Luxembourg, 19 November 1982. 
For the Court of Auditors 
Pierre LELONG 
President