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Vol.1979/0250

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COMMISSION OFTHEEUROPEAN COMMUNITIES
.*
*COM(79)746 final
Brussels.12December1979
REQUEST
THATTHECOUNCILRAISETHEMATTEROFAREQUEST BYTHE
BELGIAN GOVERNMENT FORAUTHORIZATION TOINTRODUCE IN
THESECOND-HAND CARTRADEAMEASURE FORDEROGATION FROM
THEPROVISIONS OFTHESIXTHVATDIRECTIVE INACCORDANCE
WITHARTICLE27(1)TO(4)THEREOF ,
(Communication fromtheCommission totheCouncil)
C0M(79)746final
ι

•REQUESTTHATTHECOUNCILRAISETHEMATTEROFA
REQUEST BYTHEBELGIAN GOVERNMENT FORAUTHORIZATION
TO.INTRODUCEINTHESECOND-HAND CARTRADEAMEASURE .
FORDEROGATION FROMTHEPROVISIONS OFTHESIXTHVATDIRECTIVE
INACCORDANCE WITHARTICLE27(1)TO(4)THEREOF
.(Communication fromtheCommission totheCouncil)
1.Introduction -
1.1.UndertheSixthCouncilDirective (77/388/EEC),theMemberStatesare
.requiredtoapplythecommonsystemofvalueaddedtax,Article27(1)
oftheDirective-states thattheCouncilmayauthorizeanyMember
Statetointroducespecialmeasuresforderogation fromtheprovisions
oftheDirective,inordertosimplifytheprocedureforchargingthe
taxortopreventcertaintypesoftaxevasionoravoidance.
< -
V
1.2.Byletterdated9October1979andreceivedon11October1979,the
PermanentRepresentation ofBelgiuminformed .theCommission ofa
measureplannedtobeintroducedintoBelgianlawanddescribed as
designedtopreventcertainfraudulentpracticesinthesecond-hand
cartrade(the.lettertogetherwiththedescription ofthemeasureare
giveninAnnex1)'. *
1.3.On26October1979,theSecretariat-General oftheCommission wroteto
theotherMemberStatesinforming them,inaccordance withArticle
27(3)oftheDirective,ofthemeasureproposedbyBelgiunuUnder
paragraph 4ofthesaid.Article,theCommission ortheMemberStates
mayrequestthatthematterberaisedbytheCouncil.
2.Description ofthemeasure " _,
2.1.TheaimofthemeasureproposedbyBelgiumistorequirethattaxdue
whenasecond-hand "carispurchasedshouldbepaidtotheTreasuryby'
.thebuyer,whereas,underthecommonsystemofVAT,thisobligationis
normallyincumbentuponthetaxablepersonsellingthecar>evenif/he
passesthetaxontothebuyer.
3.OpinionoftheCommission " >
TheCommission considersthataspecialmeasurecannotbeauthorized
•underArticle27oftheSixthDirectiveunlessthemeasure,while
derogating fromthearrangements forimplementing thecommonsystemof
VAT,isconsistentwiththebasicprinciples andmainprovisionsofthe
system.However,themeasureproposedbytheBelgianGovernment .doesnot
"meetthiscondition,sinceitconflictswiththreeofthemainprovisions
-oftheSixthDirective s
/

-2-
a)Article 2(1),which defines theconcept oftaxable transactions ,namely
the'supply ofgoods orservices effected forconsideration within the
territory ofthecountry byataxable person acting assuch .
However ,themeasure proposed isintended to .taxnotthesale within the
meaning ofthis provision ,butthepurchase ofthegood supplied ;
b)Article 4(1),which defines ataxable person asbeing anyperson who
carries out aneconomic activity .
However ,theeffect ofthemeasure proposed would betorelieve from
thetax (forreasons oftaxevasion )the real taxable person whomust
bethe seller ;
c)Article 21(1)(a ),which defines persons liable topaytaxasbeing
taxable persons whocarry outtaxable transactions .
However ,themeasure proposed would result inthebuyer rather than the
seller ofthegood supplied being made liable forpayment erfthetax.
4»Conclusion
Since themeasure inquestion gives rise tofundamental objections ,
theCommission requests that thematter beraised bytheCouncil ,in
accordance with theprovisions ofArticle 27(4 )oftheabovementioned
Directive .
Annex 1

■.■ annex 1
JhrfU.AM,
•' :Τ
KINGDOM OFBELGIUM
Notice pursuant toArticle27(2)ofthe sixth Council Directive ;
of17May .197?concerning "-ameasure tocombat tsxevas ion ,
Thenumerous checks made bythe.'administration enthesecondhand
carmarket revealed that taxevasion wasbeing pract sedoaalarge 'scale , ....
Foronething ,dealers ofdoubtful morality artselling 'secondhand
cars toother dealers butnotpaying totheTreasury theValue added taxthat
•they invoice totheir customers ,whothen deduct thetax . • . '
"Foranother ,ithasbeen found that consumers have been able to
have cars registered byusing false declarations ordeclarations issued by
t.ixoble persons whodonotpay totheTreasury the taxthat thedeclaration
;..iys .they wil Ibepaying . \
l •*7" L, . V
Inboth situations thechances ofrecovering theunpaid tax .have
turned out tobeillusory ,,particularly asmany ofthedealers ,areinsolvent .
Λ
TheBelgian Government hasaccordingly decided that thetaxpayable
upon thepurchase ofsecondhand cars will have tobepaid bythebuyer .
.' •' - * '
Theobligation ofthebuyer topaythetax inplace ofthetaxable
person selling thecarrelates topurchases ofsecondhand cars ,mixed-used v '
vehicles andminibuses .,Itapplies regardless ofthestatus of .theperson
whobuys thevehicle from thetaxable person . '
Where thebuyer ishimself requifed tofileamonthly orquarterly
return anddoes notapply forregistration ofthevehicle attheRoad Traffic'
Office ,thetaxwflt bepayable bythebuyer andassessed from hisperiodic
returns . . " •. •:' ■. ■
Inother cases value added taxlwilt bepaid bymeans ofrevenues
stamps affixed-and cancelled orta*declaration that thebuyer must submit to .
anInspection Office ;ifthedeclaration is-notsubmitted ,hetaondt register
thevehicle . v v-.'V;-"•:.- '.;■,",;

ANNEX
While thetaxable person whosells asecondhand ,vehlcte is
1 « • .
released' from theooligation topay tft®' ..taa'falling du«byreason of
thesale >heregains subject toailhisother obligations ,notably the
oblicsation .tdissue aninvoice ,.
i '
ι
Itgoes without saying that abuyer who .isataxable person ,
and .pays value added taxeither foilowing anassessment onthebasis
of :hisreturn orintheform ofrevenue' steeps may .deduct that tax in
accordance with theordinary .rules . . ' .
Asaresult oftheprecautions that 'will betaken ,,transferring
theobligation topayvalue added -taxtothebuyer will involve noextra *
difficulties asregards calculation ofVATown resources *The turnover
\ •
oftaxable person ^that deal Insecondhand vehicles will beknown ass
« t
result oftheir periodic returns *.The amount ofthe tax dueonsales
9
ofsecondhand vehicles totaxable persons who donot have thevehicles
registered will also appear from their monthly or -quarterly returns just
like theother taxes that t^ey have topay totheTreasury .The amount
«
ofthe tax dud forsecondhand vehicles forwhich registration hasbeen
applied forWill beknown 'exactly asaresult oftheinformation obtained
byInspection Offices when they receive thedeclaration required for
registration dfthevehicle * ."