WRITTEN QUESTION E-0853/99

by Reimer Böge (PPE) to the Commission

(7 April 1999)

Subject: Abolition of duty-free sales for intra-Community travel

The abolition of duty-free sales for intra-Community travel will have serious implications for employment in Schleswig-Holstein. In the structurally weak districts in this Land which are affected about 3 000 jobs depend directly on duty-free sales.

- Can the Commission make practical proposals on how the instruments of the Structural Funds could be targetted to counteract the negative effects of the abolition of duty-free sales, bearing in mind also the forthcoming structural fund reform and the associated changes in the support framework?

- How does the Commission view the possibilities for an initiative, similar to the system created in 1992 after removal of the checks at internal frontiers for the adaptation of customs agencies, to assist, using special measures, in the restructuring of the undertakings that are worst affected and to maintain jobs?

- Is there now a clear transitional tax provision for intra-community travel on ships after abolition of duty-free sales, so that, in view of the considerable differences in taxation in the Member States, there will not be tax chaos in the travel sector after 30 June?

- If not, will the Commission propose as quickly as possible a transitional tax provision, under simplified procedure, taking into account the lowest tax rates in each case?

Answer given by Mr Monti on behalf of the Commission

(7 May 1999)

On 17 February 1999, in response to the Vienna European Council, the Commission adopted a communication to the Council on the employment aspects of the decision to abolish tax- and duty-free sales for intra-Community travellers(1).

The communication analyses the situation on the basis of information gathered from Member State administrations and shows that the Council decision will not have a macroeconomic impact but will have limited effects on specific sectors. It recommends that Member States should make optimal use of existing Community arrangements, in particular the Structural Funds.

It is up to the Member States to take the necessary measures under programmes currently being implemented, in particular by means of re-programming. Funds are still available.

In the Commission's view, if the Council considers it necessary a specific Community initiative could be introduced, in addition to existing arrangements and the Structural Funds, for the reemployment of people who lose their jobs in sectors affected by the change. Until the Council has reached a decision on this it would be premature to comment on the specific content of such a measure.

The Commission has already stated in its notice of 9 April 1999(2) that the VAT and excise rules that will apply to sales in the air and water transport sectors from 1 July 1999 are normal taxation rules which have been implemented in other sectors (rail and road transport) since 1 January 1993.

The Commission has been holding discussions with the Member States in technical committees and with operators for many months. National administrations have been in contact with each other and with operators regarding taxation procedures (collection and controls) falling within the sphere of Member State competence.

(1) OJ C 66, 9.3.1999.

(2) OJ C 99, 10.4.1999.