23.8.93 OfficialJournaloftheEuropeanCommunities NoC227/1
II
(PreparatoryActs)
COURTOFAUDITORS
OPINIONNo6/93OFTHECOURTOFAUDITORSOFTHEEUROPEANCOMMUNITIES
ontheproposalforaCouncil(EEC)RegulationamendingCouncilRegulation (EEC,
Euratom)No1553/89of29May1989concerningthedefinitiveuniformarrangementsforthe
collectionofownresourcesaccruingfromValueAddedTax
(93/C227/01)
WhereastherevenuemethodintroducedbyCouncil
Regulation (EEC,Euratom)No1553/89,astheuniform
methodfordeterminingtheharmonizedVATown
resourcesbase,isbasedontheprincipleofatheoretical
reconstruction oftheMemberStates'VATbasesusingthe
amountsofVATrecovered;andwhereas,byreasonofthis
fact,itbringsdisparatefactorsintoplay,namely:
thenetrevenuereceived,ontheonehand,whichis
accountedforusingatraditionalpublicaccounting
system,andTHECOURTOFAUDITORS OFTHEEUROPEAN COM­
MUNITIES ,
HavingregardtotheTreatyestablishingtheEuropean
EconomicCommunity ,andinparticularArticle209
thereof,
HavingregardtotheTreatyestablishingtheEuropean
AtomicEnergyCommunity ,andinparticularArticle183
thereof,
HavingregardtoCouncilDecisionNo88/376/EEC,
Euratom,of24June1988(!)concerningthesystemofown
resourcesoftheCommunity ,
HavingregardtoCouncilRegulation (EEC,Euratom)No
1553/89of29May1989(2)concerningthedefinitive
uniformarrangementsforthecollectionofownresources
accruingfromValueAddedTax(VAT),
HavingregardtotheproposalsubmittedbytheCommis­
sionon21December1992(3),
HavingregardtotheCouncil'srequestfortheCourt's
opiniononthisproposal,receivedbytheCourton18
February1993,
HavingregardtoCouncilDirectiveNo91/680/EECof
19December1991(4)completingthejointarrangements
forvalueaddedtaxandamending,withaviewtothe
abolitionoftaxfrontiers,DirectiveNo77/388/EEC,b)theweightedaverageVATrate,thecorrectionstonet
revenuereceivedandcompensations appliedtothe
intermediatebase,ontheotherhand,establishedusing
multifarioustypesofdata,suchasthenational
accounts,taxorotherstatisticsandestimates,
WhereasthecheckscarriedoutbytheCourthaveshown
thatthedatathususedareoftenbasedonhypotheses,
whichvaryfromoneMemberStatetoanother;and
whereasincertaincasesthelackofrecentofficialstatistics
resultsintheuseofstatisticalsourcesofdoubtful
reliability;and,finally,whereasthecalculationmethods
varyfromMemberStatetoMemberStateandare
sometimesopentoquestion;
(1)OJNoL185,15.7.1988,p.24.
(2)OJNoL155,7.6.1989,p.9.
(3)DocumentCOM(92)580Final.
(4)OJNoL376,31.12.1991,p.2.Whereas,therefore,therevenuemethodinitselfcallsfora
revisiondesignedtoeliminateasfaraspossiblethe
elementsofuncertaintythatatpresenttypifythere­
constructionoftheMemberStates'VATbases,

NoC227/2 OfficialJournaloftheEuropeanCommunities 23.8.93
HASADOPTEDTHEFOLLOWING OPINION :
PARTONE
Generalobservations
1)TheCommission'sproposalaimstoachievetwo
objectives :
—ontheonehand,theupdatingoftheRegulationsoasto
takeaccountofthetransitionalarrangements for
taxingintra-Community tradeapplicablewitheffect
from1January1993,andClarificationoftheprovisionsofthe
regulations:
5)CouncilRegulation (EEC,Euratom)No1553/89itself
authorizescertainapproximations andallowsforthe
possibilityofusingdataofdoubtfulreliability.Thisoption
isincontradictionwiththedegreeofdisciplinerequiredin
thefinancialsphere,andinparticularwiththerequirement
foraccuracytothefourthdecimalpointinthefigureforthe
weightedaveragerate.
6)Theseelementsofuncertaintyoughttobeeliminated
inthelightofexperienceandasfaraspossible.Themain
examplesarelistedbelow:
—roundingupto10%innationalcurrencyofthe
turnoverceiling(10000ECU)ofexempttaxable
persons(Article2,paragraph3);
—authorizationtomakeuseofnationalaccountspriorto
theyearn—2,uptoamaximumoffiveyearsbeforethe
referencefinancialyear(Article4,paragraph4);
—theoptionofusinganyothersource,apartfromthe
EuropeanSystemofIntegratedEconomicAccounts,
(Article4,paragraph5)ortaxdata(Article6,
paragraph1);
—roundinguptoafullmonthoftheaverageperiodof
applicationofagivenrateofVAT(Article4,
paragraph7);
—authorizationtoleavecertainimportantoperationsout
ofaccountortocalculatethemusing'approximate
estimates'(Article6,paragraph3);—ontheotherhand,thelayingdownofcommon
methodsforcalculatingcertaincomponentsofthe
VATownresourcesbase.
2)UpdatingtheRegulationsoastotakeaccountofthe
abolitionoffiscalfrontiers,whichiscontemplated in
Article1oftheCommissionproposal,isatechnical
measure.Whilstrecognisingtheusefulnessofthecorrec­
tionsproposedbytheCommission ,theCourtwishesto
drawattentiontothefactthatDirective92/111/EECof14
December1992(l)amendingDirective77/388/EEC(2)has
notbeentakenintoconsideration .Itwouldconsequently
bepreferable,inordertoavoidthedangerofrepeated
updatings,toreferonlytothemaindirectiveinthetextof
theRegulation .Aboveall,though,theamendment
proposedforArticle4,paragraph2,accordingtowhich
goodstaxedinoneMemberStatebuttransferredto
anothermustbepartoftheVATbaseofthefirstState,
risksraisingproblemsofpracticalapplication .Itshould
havebeencompletedbyincludingauniformcalculation
methodintheAnnextotheproposalforaregulation.Stricterdefinitionoftheconceptof'net
revenuereceived':
7)Asthenetrevenuereceivedisthebasicreferenceforthe
purposeofcalculatingtheVATbase,itisimportanttogive
aspreciseadefinitionofitaspossiblesoastoensurethat
thesumsinquestionareaccuratelydetermined .For
example,thepossibilitycouldbeenvisagedoftakingasa
referencethedateonwhichtherelevanttaxauthorities
enteragivenitemofVATrevenueintheirVATrecovery
accounts.Theaccountingstatementsinquestionshould
alsobeexpresslydesignatedbytheMemberStates,inorder
tohelptheCommissiontoidentifythem.3)Thecommoncalculationmethodforcertaincom­
ponentsoftheVATownresourcesbasewhichisprovided
forintheAnnexamountstoanattemptatrationalization
inthisareaofakindwhichtheCourthasinfactcalledfor
inthepast.Theproposedproceduresarecommentedonin
detailinthesecondpartofthisOpinion.Theycould
usefullybecompletedbyothers,concerning,forexample,
flat-ratefarmersandsliding-scaleVATreductions .ApplicationtotheVATbaseofthe
provisionsconcerningthecheckingofthe
calculationoftheGrossNationalProduct
(GNP):
8)Forthepurposeofscrutinizingandcheckingfigures
fortheGNPaggregatecommunicated bytheMember
States,proceduresarelaiddowninTitleIIIoftheCouncil
Directiveof13February1989(89/130/EEC,Euratom)(3)
concerningtheharmonization ofthecalculationofthe4)Layingdownacommoncalculationmethodis,
however,nothingmorethanapartialmeasure.Amore
thorough-going attemptatrationalization shouldbemade,
inrespectoftheareasmentionedbelow.
(1)OJNoL384,30.12.1992,p.47.
(2)OJNoL145,13.6.1977,p.1. (3)OJNoL49,21.2.1989,p.26.

23.8.93 OfficialJournaloftheEuropeanCommunities NoC227/3
GrossNationalProductatmarketprices.TheCommission
implementstheseproceduresthroughtheStatisticalOffice
oftheEuropeanCommunities ,whichisitselfassistedbya
committeeofspecialiststatisticians .
9)Itwouldbelogicaliftheprecautionsthataretaken
whenevaluatingtheGNPwerealsoapplicabletothe
evaluationofthestatisticalandmacroeconomic com­
ponentsoftheVATbase.Theweightedaveragerate,
particularlynowthattheinternalfrontiershavebeen
eliminated,alongwithcorrectionsandcompensations and
theitemsthatgotomakethemup,shouldthereforebe
notifiedtotheCommission inaccordancewiththesame
proceduresasthefiguresfortheGNPaggregateandshould
besubjectedtothesameformsofscrutiny.Tothisend,it
wouldbesensibletoestablishacommondateforthe
forwardingoftheVATstatementsandtheGNPfigures.11)TheCourthasalreadypointedout,inparticularinits
annualreportonthefinancialyear1991(*),thatthese
reservesarenotatpresentsubjecttoanythingmorethana
formofadministrative recording,whichgivestheman
unofficial,discretionary aspect.Whatismore,the
resolutionofthesereservesissubordinated totheneedto
arriveatanagreementbetweentheCommissionandthe
MemberStateandtheprincipleofspecifictimelimitsisnot
providedforintheRegulation .
12)Theseweaknessesshouldberemediedbyintroducing
aformofofficialrecordingofthereservesandestablishing
rulesgoverningthetimelimitswithinwhichsuch
differencesmustbesettled.Inthisconnection,theadoption
ofacommoncalculationmethodoughttofacilitatethe
detectionofcasesthataresubjecttoreserves.
PARTTWO
Examination ofthecommoncalculationmethod
Inthefollowingtabularpresentation ,theCourtsetsoutthe
amendments toandcommentsontheannextothe
Commission'sproposalwhichwereadumbratedinPart
One.Recordingandmonitoringofadjustmentsto
VATstatements :
10)Inimplementation oftheprovisionsofArticle9of
Regulation (EEC,Euratom)No1553/89,so-called're­
serves'areenteredintheeventofdisagreements astothe
adjustmentsthataretobemadetotheVATstatementsby
theCommission ortheMemberStates.Thesereservesare
enteredforamaximumperiodoffouryearsafterthe
forwardingofthestatements . (!)OJNoC330,15.12.1992,paragraphs1.99—1.102.

THECOMMISSION 'SPROPOSAL THECOURT'SPROPOSAL COMMENTSNoC227/4Commoncalculationmethod
1.Article2(3)
a)Fortaxedtransactionsbytaxablepersonswhose
annualturnoverdoesnotexceedECU10000,the
VATresourcesbaseisdetermined :Thismethodisappreciablydifferentfromthemethods
useduntilnow;inparticular,theproposedwording
specifiesthatMemberStatesmustinfuturemakea
compensation tothebaseandnotacorrectiontothe
revenue,whichincreasesthetheoreticalconsistencyof
thecalculations .Moredetailsshouldbegivenasregards
thereferencefinancialyearwhichistobetakeninto
consideration andthosebusinessestheturnoverof
whichisnotspreadoverawholefinancialyear,or
whichhavemadepurchasestotallingmorethanECU
10000,eventhoughtheirturnoverislessthanECU
10000.
byaddingtothisbasethenetpricesofgoods
andservices—purchasedbythesetaxable
persons—bearingVATwhichisdeductible
underArticle17ofDirective77/388/EEC,
bysubtractingfromthisbasethevalueofgoods
andservicessuppliedbythesetaxablepersons
tonon-taxablepersons.OfficialJournaloftheEuropeanCommunitiesSinceArticle2(3)ofRegulation (EEC,Euratom)
No1553/89referstoArticle24(4)ofDirectiveNo77/
388/EEC,itwouldmakesensetobringthetwotexts
intolineandthustotreattaxablepersonswhoseannual
turnoverdoesnotexceedECU10000asiftheywere
exempted.ItisforthisreasonthattheCourt,bymeans
ofthisaddendum,wishestoproposeanalternative
calculationmethodwhichinvolvestreatingthetaxed
operationsofthosetaxablepersonswhoseturnover
doesnotexceedECU10000asiftheywereoperations
coveredbyAnnexEtoDirectiveNo77/388/EEC.It
shouldalsobenotedthattheCommission isalso
proposingasinglemethodfortheoperationsofthose
taxablepersonswhoseturnoverexceedsECU10000
butwhoareexemptedandforthoseoperationscovered
byAnnexF.Addattheend:
'Inaddition:
theVATonthenetpricesofgoodsandservicesbearing
VATwhichisdeductibleunderArticle17ofDirective
No77/388/EEC,correspondingtosuppliestotaxable
personswhothemselveswillsupplydirect—orvia
othersuppliestotaxablepersons—tonon-taxable
persons,issubtractedfromtheVATresourcesbase'.
Deleteindentb) b)Forexempttransactionsbybusinesseswhose
annualturnoverdoesnotexceedECU10000,the
VATownresourcesbaseisdetermined :
—bysubtractingfromthisbasethenetpricesof
goodsandservices—purchasedbythese
businesses—bearingVATwhichisdeductible
underArticle17ofDirective77/388/EEC.Indentb)becomesredundantif,astheCourtsuggests,
themethodrelatingtotheoperationscoveredbyAnnex
EtoDirectiveNo77/388/EECisappliedtothetaxed
operationsofthosetaxablepersonswhoseturnover
doesnotexceedECU10000.Sincethecalculationis
madeasiftheoperationsofthosetaxablepersonswere
exempt,itisnolongernecessarytomakeaspecific
compensation foroperationswhichwereactually
exempted.23.8.93

THECOMMISSION 'SPROPOSAL THECOURT'SPROPOSAL COMMENTS
2.Article4(7)Themostimportantquestion,whichisnotdealtwithin
thisAnnex,concernsthemethodforcalculatingand
roundingofftheaverageintervalbetweenthecoming
intoforceofanewrateandthecorrespondingcollection
ofrevenue.
Theproposedmethodisnomorespecificthanthetext
ofArticle4(7).ThefirstsubparagraphofArticle4(7)providesforthe
calculationoftwopartialweightedaverageratesand
hencethecalculationoftwopartialintermediateVAT
bases.
Inordertocalculatetheweightingstobeappliedtothe
oldrates(and/oroldlegislation)andthenewrates(and/
orthenewlegislation),thepurchasesandsupplies
referredtoinArticle4(2)arebrokendownonthebasis
oftheperiodsofthecalendaryearduringwhichthe
VATrevenuewasyieldedattheoldrates(and/orunder
theoldlegislation)andatthenewrates(and/orunder
thenewlegislation).23-8.93 OfficialJournaloftheEuropeanCommunities NoC227/5ThesecondsubparagraphofArticle4(7)providesforaReplaceby:
singleweightedaverageratetobecalculatedandtobe
appliedtothetotalnetreceiptsfortheyear.
Atanintermediatestage,twoweightedaveragerates
arecalculated,onanannualbasis,using,inthefirst
case,theoldrates(and/ortheoldlegislation)and,inthe
secondcase,thenewrates(and/orthenewlegislation).Theaveragesinglerateisobtainedbycalculatingthe
ratioofVATrevenuechargedatthevariousratestothe
totalsumofthebases.Beingobligedtocalculateaverageweightedinter­
mediateratesandworkouttheweightedsumofthemin
ordertoobtainthesingleweightedaveragerateisan
unnecessarycomplication .
Thesingleweightedaveragerateiscalculatedasthe
weightedsumofeachoftheaverageratescalculatedas
above,takingintoaccountthelengthoftheperiod
duringwhichtheVATwasyieldedattheoldrates(and/
orundertheoldlegislation)andatthenewrates(and/or
underthenewlegislation).

THECOMMISSION 'SPROPOSAL THECOURT'SPROPOSAL COMMENTS
TheCourtpointsoutthatthemethodproposedfor
dealingwiththeoperationsofthosetaxablepersons
whoseturnoverexceedsECU10000butwhoare
exemptedimpliesthattheoperationsinquestionare
therebyexcludedfromthestatisticaldatausedto
calculatetheaverageweightedrate.3.Article6(1)and(2)
a)Methodtobeappliedinrespectof:
—operationsbytaxablepersonswhoseannual
turnoverexceedsECU10000butwhoare
exempted,
—thetransactionslistedinAnnexFtoDirective
77/388/EEC,whichMemberStatescontinueto
exempt,orwhichtheyexempt.
TheVATresourcesbaseisdetermined :
—bysubtractingfromthisbasethenetpricesof
goodsandservicespurchasedbythesetaxable
personsbearingVATwhichisdeductibleunder
Article17ofDirective77/388/EEC,
—byaddingtothisbasethevalueofgoodsand
servicessuppliedbythesetaxablepersonsto
non-taxablepersons.
Inaddition:
theVATonthenetpricesofgoodsandservices
bearingVATwhichisdeductibleunderArticle17
ofDirective77/388/EEC,correspondingtosupplies
tonon-taxablepersons,issubtractedfromtheVAT
resourcesbase,andtheVATonthenetpricesof
goodsandservicesbearingVATwhichisdeductible
underArticle17ofDirective77/388/EEC,cor­
respondingtosuppliestotaxablepersonswho
themselveswillsupplydirect,orviaothersupplies
totaxablepersons,tonon-taxablepersons,is
subtractedfromtheVATresourcesbase(1).
Deletethefootnote.
(J)Theseprovisionsapplyonlyifthedatarequiredfor
determiningthedeductibleVATonthenetpricesof
goodsandservicesinquestionarederivedfromprecise
statisticaldata.NoC227/6 OfficialJournaloftheEuropeanCommunities 23.8.93Theconditionconcerningtherequirementforprecise
statisticaldataislikelytobeinterpretedindifferent
waysandputsMemberStatesonanunequalfooting,
dependingonwhetherornottheyproducethestatistics
inquestion.

THECOMMISSION 'SPROPOSAL THECOURT'SPROPOSAL COMMENTS
b)ForthetransactionslistedinAnnexEtoDirective
77/388/EEC,whichMemberStatescontinuetotax,
theVATresourcesbaseisdetermined :
—byaddingtothisbasethenetpricesofgoods
andservicespurchasedbythesetaxablepersons
bearingVATwhichisdeductibleunderArticle
17ofDirective77/388/EEC,
—bysubtractingfromthisbasethevalueofgoods
andservicessuppliedbythesetaxablepersons
tonon-taxablepersons.23.8.93 OfficialJournaloftheEuropeanCommunities NoC227/7Inaddition:
theVATonthenetpricesofgoodsandservices
bearingVATwhichisdeductibleunderArticle17
ofDirective77/388/EEC,correspondingtosupplies
totaxablepersonswhothemselveswillsupply
direct,orviaothersuppliestotaxablepersons,to
non-taxablepersons,isaddedtotheVATresources
baseO).
Thesameremarkasabove,namelythattheabsenceof
precisestatisticsistotheadvantageoftheMemberState
concerned .Deletethefootnote.
(!)Thisprovisionappliesonlyifthedatarequiredfor
determiningthedeductibleVATonthenetpricesof
goodsandservicesinquestionaretakenfromprecise
statisticaldata
c)FortheoperationsreferredtoinAnnexG(l)(a)to
Directive77/388/EECwhicharetaxedbyvirtueof
anoptiongiventotaxablepersonsbytheMember
States,theVATresourcesbaseisdeterminedin
accordancewiththecalculationrulessetoutat(b)
above.

THECOMMISSION 'SPROPOSAL THECOURT'SPROPOSAL COMMENTS
DeletethetextrelatingtoArticle6(4). ThecurrentdifferenceswhichexistbetweenMember
Statesintheseareasmakeithighlyunlikelythata
methodwhichisbothgenuinelysingleandsufficiently
detailedcanbeapplied.Thequestionwillhavetobe
reconsideredwhentheseventh(schemeforthetaxation
ofusedgoods)andtwelfth(schemefortherestrictionof
therighttodeduct)Directivescomeintoforce.4.Article6(4)
a)WhereaMemberStaterestrictstheexerciseofthe
righttodeductinrespectofthepurchaseof
passengercarsusedforbusinesspurposes,andof
expenditurerelatingtotheleasing,hiring,mainten­
anceandrepairofsuchcars,theVATresources
baseisdetermined :
—bysubtractingfromthisbasethenetpricesof
suchpurchasesandexpenditurebytaxable
personswhohavenorightoronlyalimited
righttodeducttheVATconcerned,provided
thesecarsareusedforbusinesspurposes,
—byaddingtothisbasethenetpricesofusedcars
suppliedbythesetaxablepersonstonon­
taxablepersons.
b)WhereaMemberStaterestrictstheexerciseofthe
righttodeductinrespectofpurchasesofpetroleum
productsusedforbusinesspurposes,theVAT
resourcesbaseisdeterminedbysubtractingfrom
thisbasethenetpricesofsuchproductsbytaxable
personshavingnorightoronlyalimitedrightto
deducttheVATconcerned,providedthesepro­
ductsareusedforbusinesspurposes.NoC227/8 OfficialJournaloftheEuropeanCommunities 23.8.93ThisopinionwasadoptedbytheCourtofAuditorsinLuxembourgatitsmeetingof8July1993.
FortheCourtofAuditors
AndreJ.MIDDELHOEK
President
inhisabsence
RichieRYAN
MemberoftheCourt