WRITTEN QUESTION E-2286/00

by Karl von Wogau (PPE-DE) to the Commission

(11 July 2000)

Subject: Fiscal representative in France

A medium-sized German firm that carried out part of the work on the new European Parliament building in Strasbourg has a representative with powers of attorney in Guebwiller (Upper Rhine department). For the purposes of processing value-added tax relating to the construction work performed at the European Parliament the representative based in Guebwiller has not been recognised by the financial administration. It is claimed in justification that the fiscal agent is required to have his or her seat in the same locality as the building site, viz. Lower Rhine department.

Is the attitude taken by the financial administration consistent with the directives governing the processing of value-added tax?

Answer given by Mr Bolkestein on behalf of the Commission

(14 September 2000)

Article 21 of the Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes Common system of value added tax: uniform basis of assessment(1), in the version amended by Council Directive 91/680/EEC of 16 December 1991 supplementing the common system of value added tax

and amending Directive 77/388/EEC(2) with a view to the abolition of fiscal frontiers, lays down that where the taxable supply of goods or of services is effected by a trader established abroad, Member States may adopt arrangements whereby tax is payable by another person, including a tax representative.

The Directive does not lay down the conditions or procedures required for designating the representative. As tax harmonisation stands at present, a Member State is therefore free to determine the conditions and procedure which will enable it to obtain guarantees that the tax obligations of a trader not established in its territory will be fulfilled.

Consequently, in certain Member States, the tax representative must receive authorisation from the administration or lodge security, whereas in others the formalities for appointing the tax representative are simpler. In any event, while the case raised by the Honourable Member does not raise problems of conformity with the VAT Directives, there is a question of conformity with the principle of the freedom to provide services set out in Article 49 (ex Article 59) of the EC Treaty.

Under this principle, a tax representative established in a Member State and conducting his or her activity there must be able occasionally to provide services in another Member State without being obliged to become established there. An obligation of this kind would in fact negate this very principle and constitute discrimination which could not be justified on grounds of public policy, public health or public security as provided for in Article 46 (former Article 56) of the EC Treaty, to which Article 55 (former Article 66) of the EC Treaty refers. In the light of the information provided, the Commission is not able to take a definitive position on the case set out by the Honourable Member and requests him to pass on the relevant documents so that they can be examined.

More generally, and in order to encourage the development of trade within the single market, the Commission put a proposal for a new VAT directive(3) to the Council in 1998 with the aim of ending the possibility of imposing on traders in other Member States the designation of a representative liable for the tax.

(1) OJ L 145, 13.6.1977.

(2) OJ L 376, 31.12.1991.

(3) OJ C 409, 30.12.1998.