COMMISSION OF THE EUROPEAN COMVIUNITIES 
C0M(92) 233 final 
Brussels,10 June 1992 
Proposal for a 
COUNCIL PECISIQN 
authorizing the French Republic to apply measures derogating 
from Article 17 and Article 22(3), (4) and (5) 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 
(presented by the Commission) 
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EXPLANATORY MEMORANDUM 
1. Until 1 October 1991, France exercised the option provided for in 
Article 28(3)(b) to continue to exempt services supplied by authors, 
artists and performers (Annex F, point 2). 
Since that date, services supplied by authors and performing artists 
have been subject to VAT. 
2. In a letter received by the Secretariat-General of the Commission on 
12 March 1992, the French Government applied for authorization to 
introduce a measure under Article 27 of the sixth Council Directive of 
17 May 1977 on the common system of value added tax, to simplify the 
procedure for charging the tax. 
In accordance with Article 27(3) of the sixth Directive, the other 
Member States were informed by letter dated 10 April 1992. 
3. The measures introduced by France involve the following: 
(a) VAT payable by authors is withheld at source, irrespective of the 
turnover of the author concerned; 
(b) the input tax which authors are entitled to deduct is calculated at a 
flat rate of 0.80% of royalty payments; the amount of deductible input 
tax determined in this way is exclusive of any other deduction; 
(c) authors may opt for taxation under the normal scheme. 
4. In support of its application, the French Government points out that 
the introduction of straightforward taxation of the services of authors 
and performing artists, bringing legislation into line with the 
provisions of the sixth Directive, was strongly resisted by the persons 
concerned. The new arrangements relieving them of administrative 
obligations will forestall any negative impact on public opinion as 
regards acceptance both of the tax and of the constraints associated 
with the building of the Community. 
OJ L 145, 13.6.1977, p.l. 
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The French Government stresses that the arrangements do not affect the 
amount of tax collected at the final consumption stage. 
5. The Commission agrees that the purpose of these measures derogating 
from the provisions of Article 17 and Article 22(3), (4) and (5) of the 
sixth Directive is to simplify the procedure for charging VAT in 
accordance with Article 27 of the Directive. 
Consequently, the Commission considers that France should be authorized 
to introduce the special measures described above. However, it takes 
the view that the authorization should be granted for a limited period, 
running from 1 January 1992 to 31 December 1996. 
Proposal for a Council Decision 
authorizing the French Republic to apply measures derogating 
from Article 17 and Article 22(3), (4) and (5) 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 taxec 
(presented by the Commission) 
THE COUNCIL OF THE EUROPEAN COMMUNITIES, 
Having regard to the Treaty establishing the European Economic Community, 
Having regard to 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 value added tax: uniform basis of assessment, and 
in particular Article 27 thereof, 
Having regard to the proposal from the Commission, 
Whereas, under Article 27(1) of the aforementioned Directive, the Council, 
acting unanimously on a proposal from the Commission, may authorize any 
Member State to introduce special measures for derogation from that 
Directive in order to simplify the procedure for charging the tax or to 
prevent certain types of tax evasion or avoidance; 
Whereas the French Republic, by letter received on 12 March 1992, applied 
for authorization to introduce arrangements for the tax payable by authors 
to be withheld at source, with deductible input tax calculated on a flat-
rate basis, and an option for authors to waive expressly their inclusion in 
this scheme; 
Whereas these arrangements constitute a derogation from Article 17 
concerning the origin and scope of the right to deduct and from 
Article 22(3), (4) and (5) concerning the obligations of persons liable for 
payment; 
Whereas the other Member States were informed of the French Republic's 
application on 10 April 1992; 
OJ L 145, 13.6.1977, p.l. 
*t 
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Whereas the proposed simplification of the arrangements for charging the 
tax will make it easier for authors to accept the status of taxable person; 
Whereas the application may be granted on certain conditions; 
Whereas the authorization should be temporary, so that the effects of 
application of the arrangements can be assessed; 
Whereas the Commission will submit a report to the Council by 
31 December 1996 on the application of the derogations, accompanied, where 
appropriate, by a proposal for a Decision to extend the authorization; 
Whereas this derogation should have no effect on the European Communities' 
own resources accruing from value added tax, 
HAS ADOPTED THIS DECISION: 
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Article 1 
By way of derogation from Article 17 and Article 22(3), (4) and (5) of the 
sixth Directive 77/388/EEC, the French Republic is hereby authorized from 
1 January 1992 until 31 December 1996: 
- to introduce arrangements for withholding at source the tax payable by 
authors where the royalties they receive are paid by publishers, 
royalty collection and distribution companies or producers; 
- to calculate author's deductible input tax by applying a flat rate of 
0.80% to their royalties. The amount determined in this way shall be 
exclusive of any other deduction. 
Article 2 
In the light of a report from the Commission on the application of the 
authorization referred to in Article 1, accompanied, where appropriate, by 
a proposal for a Decision extending the said authorization, the Council, 
acting on the basis of that proposal, shall decide before 31 December 1996 
whether the said authorization is to be extended. 
Article 3 
This Decision is addressed to the French Republic. 
Done at Brussels, For the Council 
The President 
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