Proposal for a Council directive supplementing the common system of value added tax and amending Articles 32 and 28 of Directive 77/388/EEC - special arrangements for second-hand goods, works of art, antiques and collectors’ items
Date: 1989-02-03
Institutions: Directorate-General for Taxation and Customs Union, European Commission
Subjects: VAT, intra-EU trade, tax harmonisation, used goods, work of art

ARCHIVES HISTORIQUES
DE LA COMMISSION

COLLECTION RELIEE DES
DOCUMENTS "COM"

COM (88) 846

Vol. 1988/0275

Disclaimer

Conformément au règlement (CEE, Euratom) n° 354/83 du Conseil du 1er février 1983 concernant
l'ouverture au public des archives historiques de la Communauté économique européenne et de
la Communauté européenne de l'énergie atomique (JO L 43 du 15.2.1983, p. 1) modifié en dernier
lieu par le règlement (UE) 2015/496 du Conseil du 17 mars 2015 (JO L79 du 25. 3.2015, p. 1), ce
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In accordance with Council Regulation (EEC, Euratom) No 354/83 of 1 February 1983 concerning
the opening to the public of the historical archives of the European Economic Community and the
European Atomic Energy Community (OJ L 43, 15.2.1983, p. 1), as last amended by Council
Regulation (EU) 2015/496 of 17 March 2015 (OJ L 79, 27.3.2015, p. 1), this file is open to the
public. Where necessary, classified documents in this file have been declassified in conformity
with Article 5 of the aforementioned regulation or are considered declassified in conformity with
Articles (26.3) and 59(2) of the Commission Decision (EU, Euratom) 2015/444 of 13 March 2015
on the security rules for protecting EU classified information.

In Übereinstimmung mit der Verordnung (EWG, Euratom) Nr. 354/83 des Rates vom 1. Februar
1983 über die Freigabe der historischen Archive der Europäischen Wirtschaftsgemeinschaft und
der Europäischen Atomgemeinschaft (ABI. L 43 vom 15.2.1983, S. 1), zuletzt geändert durch die
Verordnung (EU) Nr. 2015/496 vom 17. März 2015 (ABI. L 79 vom 25.3.2015, S. 1), ist dieser Akt
der Öffentlichkeit zugänglich. Soweit erforderlich, wurden die Verschlusssachen in diesem Akt in
Übereinstimmung mit Artikel 5 der genannten Verordnung freigegeben; beziehungsweise werden
sie auf Grundlage von Artikel 26(3) und 59(2) der Entscheidung der Kommission (EU, Euratom)
2015/444 vom 13. März 2015 über die Sicherheitsvorschriften für den Schutz von EU-
Verschlusssachen als herabgestuft angesehen.

COMMISSION OF THE EUROPEAN COMMUNITIES

COM(88 ) 846 final

Brussels , 3 February 1989

Revised Version

Proposai for a

COUNCIL DIRECTIVE

supplementing the common system of value added tax and amending
Articles 32 and 28 of Directive 77 / 388 / EEC - special arrangements for
second-hand goods , works of art , antiques and collector 's items

( presented by the Commission )

sr î>

ai

Explanatorv Mémorandum

Introduction

The attached proposal is intended to complete , for second hand goods ,
works of art , antiques and collector 's items , the common system of value
it closed a particularly important gap in
added tax .
relation to the requirements of neutrality in the common VAT system as
prescribed
and
clarified by the Court of Justice in a series of important judgements .

Directive ,

principle

In doing

confirmed

first

this

VAT

the

in

a

However the reintroduction of second hand goods , works of art , antiques

and collector 's items into commercial channels and their subjection to

VAT in that case raises a number of very sensitive questions to which any

proposal must try and give a coherent answer . Also it should be said that

the reintroduction of goods acquired from a non-taxable person , or from a

the

from

start

situating

taxable person who has no right of deduction , would be made easier by
right
the perspective of
the
creating the internal market as defined in Article 8A and by introducing
accordingly the measures necessary for the functioning of a real market -
interior and exterior - for second hand goods , works of art , antiques and
collectors items .

proposal

in

controllable as possible ;

In addition the special regime to be put in place must • also be as
it must be accepted that it
neutral , simple and
is not possible in this respect to achieve characteristics and results
equal to those of the normal VAT regime . Consequently compromises have
had to be made on a number of aspects and the overall situation must
especially when the detailed provisions are
always be kept in mind ,

examined .

The aim of this special regime must be extremely clear : it consists of
systematically taking into account the value added by the taxable-dealer
in the goods concerned in the course of his professional activities .
This leads to excluding from the scope of application all value added at

the previous stages by the private ( non-taxable ) person or the taxable
persons who does not have the right to deduct when he cedes the goods to
the dealer .

v«

-

The special

regime must also be neutral

in regard to

all kinds of

intermediaries who are liable to act as taxable dealer .

insofar as non-taxable persons are outside the scope of

Lastly ,
the
application of this special system , the obvious consequence should be the
full application to them , until the abolition of fiscal frontiers , of the
principles deduced by the Court in the " Schul " jurisprudence .

I

Subject of the proposai

The eurrent proposal is founded on the logic which is the basis of a

number of rulings of the Court of Justice concerning second-hand goods .

The first judgement concerned ,

the Schul Judgement ( 1 ),

the case of a

second-hand good bought by

a private eitizen in

a Member State and

imported by him into his Member State of residence .

In the judgement the Court referred to Article 95 and concluded that

"Value added tax which a Member State levies on the

importation of

produets from another Member State supplied by a private person , where no

such tax is levied on the supply of similar products by a private person

within the territory of the Member State of importation ,

constitutes

internal taxation in excess of that imposed on similar domestic products

to the extent to whieh the residual part of the value added tax paid to

the Member State of exportation whieh is still contained in the value of

the product on importation is not taken into account ".

In other judgements ( 2 ), the Court has covered most of the possibilities

of import of second-hand goods by private persons .

The Commission
in
judgements

gave
a

interpretation of
January

in

the
1986

scope
( 3 )

of

the

:

" the

Schul
double

Communication

its

( 1 ) Judgement of the Court of 5 May 1982
( 2 ) Judgments of the Court of 21 May 1985 ( Schul ),
( 3 ) OJ n°C 13 of 21.1.1986 , p. 2

11 December 1984

imposition of VAT on goods exported from one Member State to another is
contrary to Community law and to the achievement of a genuine common
for
market ." The Commission drew from
second-hand goods imported by private persons . This proposal takes this
it
as given . Moreover the field covered by that solution is limited :
the principle of
only concerns imports by private citizens ,
avoiding double taxation is of general application .

an operational

solution

even if

this

The application of the principle of avoiding double taxation has also
been confirmed by the Court in other cases concerning the sale of new
goods involving the part exchange of second-hand goods of the same kind

inside a Member State ( 4 ). In these judgements the Court said that the

second-hand goods whieh had already borne VAT when they were first

introduced into commerce , could not be , when resold by a taxable person ,

submitted to a VAT whieh had been calculated on a base which included the

VAT already paid .

On that occasion the Court also said that when a Member State had a

not

national system for second-hand goods , this was only limited in that it
The
system
could
fundamental principle of no double taxation and neutrality applies , and
this is essential , also to trade inside a Member State .

applicable

interfere

goods .

with

new

the

to

In spite of the principles set out , on several occasions , the economic
problems posed by the application of the VAT to goods put back into
commercial channels by professionals who sell second-hand goods , works of
art , antiques or collectors items , rest : no community law exists which
avoids double taxation at this stage .

of

( 6th

Directive )

77/388/EEC

to Article 32

According
a
Directive
Community taxation seheme for this seetor should have been adopted by the
Council before 31 December 1977 . To this effect the Commission presented
a proposal on 1 1 January 1978 ( Proposal for a 7th Directive , O.J. n°C 26
of 1 February 1978 amended on 14 May 1979 O.J. n°C 136 of 31 May 1979 )
In view of the
whieh was the subject of long discussions in Gouneil .
faet that the discussions gave rise to a formulation whieh accentuated
a
States
the

and which did

differences

between

Member

create

not

( 4 ) Court Judgements of 10 July 1985 in the cases 16/84 and 17/84

permanent taxation system nor dealt with eross-frontier operations ,
Commission deeided to withdraw the proposal .

the

its

meeting of

At
the
withdrawal and took note of the Commission 's intention to submit to it a
new proposal on this subject shortly .

acknowledged

16 November

Council

1987 ,

the

The whole of the various provisions which make up the present proposal
in a coherent
are intended to deal with this deficiency and to tackle ,
manner the problem of goods whieh come back into the economic circuit
through dealers in second-hand goods , works of art , collector 's items and
it is thus a special regime applicable only to those traders
antiques :
speeiali2ed in these markets .

II

Analysis of thp proposai

The proposal takes the form of two articles amending the current text of
the 6th Directive :

a ) a new text to be substituted for the current text of Article 32 in
order to insert the appropriate Community provisions on the taxation
of the goods in question within the framework of the 6th Directive .
the provisions of the 6th Directive are directly
In this fashion ,
except for explicitly mentioned
applicable to
derogations , and modifications which in the future will be made to the

the new Article 32 ,

6th Directive -

for example because

of

the abolition of

fiscal

frontiers - will apply in the same way directly to Article 32 .

In

addition it has been possible to draft the text in the perspective of

the abolition of fiseal frontiers ( see ad Article 1 below )

b )

" transitional
an addition to the present Article 28 of Title XVI
provisions" whose objeet is to allow the application of the taxation
ad
provisions even before the abolition of

frontier

fiseal

( see

Article 2 )

Ad . article 1

A. Scope

As this is a special system it is extremely important to carefully
define the field of application both in terms of the goods and the
persons concerned .

this respect it

is necessary to make the assumption that the
In
special regime is only an exception to the normal system , it should be
reserved for those cases where the normal system is manifestly not
is the
applicable . This means that where the conditions permit it
normal system which applies ( see A4 ).

1 . Goods covered by this proposal

The

scope

therefore

i3 very wide .

This

reflects

the

idea

of

avoiding , by use of a specific regime , the double taxation which

can arise when a person resells goods the value of which includes

non-deductible VAT .

Indeed , most used goods as well as a certain

number of works of art whieh are resold by specialist dealers are

originally purchased by those dealers from non-taxable or taxable
persons who do not themselves have the right to deduct VAT on the

acquisition of goods . However , other goods have never been subject
to VAT because of their age ( for example certain works of art or

antiques ) .

To isolate those goods which continue to contain an element of
residual tax from all those goods purchased by a taxable dealer for
resale could be a difficult if not impossible task .
The inclusion of all these goods in the scope of the application of
the proposal is thus explained by the wish to avoid an exposure ,
whieh might be sensitive , of the detail of the activities of the
taxable-dealer . However it
is clearly specified in the proposed
directive that goods acquired by the dealer under the normal system

" taxable-dealer",

Defined as
special
they
system only insofar as the goods , which are to be resold , have been
got from private persons or from a taxable person who did not have

may however use

the

the right of deduction when he acquired the goods concerned -
following the definition of the goods given under 1 above . This
means that the special regime is applicable to the resale of goods
acquired by a taxable-dealer from an " exempt taxable person " or

from another taxable dealer .

Although strictly not necessary , the reference to Article 5 para . 4

( c ) of the Sixth Directive is intended to remove all doubt about

the regime applicable to auctioneers where they do not act as
commission agents . In those eases the scheme that is appropriate is

the normal scheme for supplies of services . This regime does not

give rise to competitive distortions in relation to the commission

operations envisaged under article 5.4 ( e ) which are considered as

supplies of goods . Indeed ,

it is of little significance that the

taxable

base

is

theoretically

made

up

in

the

first

case

by

" everything which constitutes the consideration for the supply of

the service " and in the second ease by the "difference between the

sales price- and the purchase price ",

beeause

in practice

the

economic result is the same .

Also , the fact that the special scheme is not applicable when the

goods have been obtained by the taxable-dealer under the normal

system from a taxable-person who has the right of deduction or

imported and taxed may imply , for the dealer , the need to be able
to use the normal system for some goods and the special scheme for
others in the same accounting period . In this case the joint use of

both schemes must involve keeping separate accounts so that the
operations under the one or the other ean be identified with the
the
deduction .
corresponding
administrative details in this respeet has been left to the Member

definition

rights

The

of

to

States so that they ean take account of specific national needs .

In order to avoid the risk of fraud involved in the use of the

right of deduction when the normal regime is applied , the Member
States may , in a way analogue to the provisions of Article 18(2 ),
make the taxable-dealers exercise their right only at the moment of

The decision to use this addition to the control methods

sale .
available to the Member States is left to their appreciation .

Lastly ,
not

in contrast this regime does not apply to persons who are
an

dealers .

example

This

ease

for

for

the

is

taxable

entrepreneur who , having used an item in his business , subsequently
resells it .
is the normal regime of the Sixth
Directive which applies ( taxation or exemption according to Article

In this case it

13(B ) ( c ) ) .

B. General method of application

1 . Faced by

the well-known technical problems ,

which have been

widely discussed , posed by the application of value-added tax to
supplies of second-hand goods by taxable-dealers , the search for
a harmonized solution which respeets the general system of VAT

which

facilitates

and
much
cross-frontier
operations led to the proposal that the margin realized by the
taxable dealer when he sells should be retained as the taxable

possible

as

as

base for all categories of goods concerned here .

Indeed ,

Oertafnly other methods could achieve the same economic and
the method of reconstructing the tax
fiseal results .
remnant in order to be able to deduet it at resale would give an
does
equivalent
technical
is more complicated to apply
advantages and ,

However
above all ,

result .

it
it

give

not

any

( especially for the SME who are particularly concerned by the
special seheme ).

In economic terms , the amount to be taken into consideration is

made up of the difference between the seller 's tax exclusive

price and the real cost to the latter of the acquisition of the

goods .

In the ease where the goods have been subject to VAT

whieh is non-deductible at the time of their acquisition , that

tax constitutes an element of the cost which should also be

taken into account in calculating the margin .

In this context , it is relevant to recall that a taxable dealer

may not deduct the tax actually charged on a purchase of the

goods

( this

tax

is

in theory treated as deductible by

taxation of

the

margin

only ,

under

the

definition

of

the

the

latter ) .

The

general

provisions of

Article

17

( right

to

deduction )

however , remain applicable to other purchases , even though there

is no explicit mention of this fact in the text , because as has

been said above the current proposal forms part of the text of

the Sixth Directive .

In addition ,

it is proposed that taxable dealers should not be

authorized to show VAT on the invoices which they issue . In that

way the tax on the margin will not be deductible at the next

stage .

Moreover

these provisions

correspond

to

the

general

commercial practice , which is not to reveal profit margins .

2 . A variation of the principle establishing the taxable base has

however been introduced with the possibility of using a global

that

say the difference during a declaration
margin ,
period between the total amount of sales of goods and the total

to

is

amount of purchases .

variation ,

margin
per
the
This
posteriori "
to
transaction ,
purchase price at the time of sale of the goods , which is almost

system
calculate

against
having

as
avoids

of
an

the
"a

are

whieh

difficult to

impossible in the ease of goods purchased in lots , goods of low
value
identify , etc . Globalisation
provides an answer to the difficulties encountered by certain
professions
per
transaction .
a certain parallelism with the
normal value added tax regime with notably the possibility to
This
situation of
take

the
also allows

operation

margin

system

account

in
It

sales

loss .

into

the

of

of

at

a

a

possibility , and the constraints which result from it intended

to reduce as much as possible the risks of fraud and distortions

of competition , led to the introduction of a control provision

which allows the VAT Committee to evaluate the risks . In this

way the methods of application of the system of globalisation in

the national VAT systems should be subject to the consultation

procedure provided for in Article 29 of the Sixth Directive .

3 . Furthermore the question of the techniques to be used in the
context of cross-frontier operations gives rise to the need for

of

no

taxation or

specific provisions . In this context the notion of the abolition
of fiscal frontiers must be taken into consideration . Indeed , in
the context of a system of taxation of the margin of taxable
dealers , it is impossible to tax imports for obvious reasons . It
was therefore judged preferable , in order to avoid the risks of
to have a method which
taxation ,
double
ensures that the margin is taxed regardless of the Community
destination of the goods .
is therefore proposed that the
margin on goods subject to the specific regime should be taxed
at exportation to other Member States and should not be subject
to taxation at importation . In this way a certain equivalence is
established with the type of system that will result from the
proposals
( see
explanatory memorandum ad . Art 2 on the transitional measures to
be introduced ) .

elimination

frontiers

fiscal

for

the

of

It

Methods of application to certain goods

1 . Although the principle which has been adopted should allow a
single treatment for all goods sold by taxable dealers and
should also allow the application of value added tax under the
same general conditions , the characteristics and the development

of international commerce in work3 of art , collectors items and

In order ,

antiques requires speeial provisions .
as much as to
avoid double taxation , or non-taxation , as to avoid competitive
distortions , the proposed system should provide for taxation of
the margin on these particular goods at exportation regardless
of their destination ( intra- community or third country ). Indeed ,
the general provision which has been adopted , which involves the
taxation of intra-Gommunity exportations for all categories of
goods implies that for trade with third countries the normal

system of taxation at importation on the total value of the

goods will remain in force . However the particular nature of
works of art , collector 's items and antiques , and notably the
fact that their value evolves in relation to factors which are

not connected with the notion of value-added , ought to be taken

into account .

In this context it

is necessary to avoid ,

in

relations with third countries :

- a simple exemption at importation , which in the context in

which Article 32 has been placed ( that is to say the Sixth

Directive whieh at present contains the general principle of

exemption at exportation ) would result in a situation where

such goods would not finally be taxed either at importation or

at exportation .

- taxation at importation according to the normal system which ,

for all goods already subjected to VAT in the past , would have

the inevitable consequence of double taxation and which would ,

more generally ,

result in the imposition of a considerable

fiseal burden on

these

goods ,

with no

relation with

the

concept of added value .

In this context the best solution which ean be adapted on a

economic basis is to extend the mechanism provided for in intra ¬

community trade to trade with third countries : i.e. taxation of
the margin at exportation and exemption at importation . Such a
the
mechanism is
the
repatriation of

also compatible with the
the

encouragement of
of
conservation

works

and

art

of

European cultural heritage .

2 . However a relationship has to be established with the fiscal

treatment of creators of works of art .

Indeed ,

to the extent

specific system under which works of

that original works of art should be taxed under the normal
regime when they are sold by their author or his representative
so as to avoid
( whether on the internal market or at inport )
it is right to
distortions of competition with art galleries ,
art will
prevent the
it is
benefit from becoming a source of fraud . In particular ,
necessary to avoid the situation in which an original work of
art exempted at the time of exportation by the artist could be
immediately reimported by a taxable dealer and benefit from the
exemption applied at importation as
the
present proposal .
To this effeet a provision was introduced
whieh allows the national authorities to demand that , for all
reimportations within a time period of thirty-six months , proof

is provided for

in

should be given that the goods were definitively taxed before

exportation from

the Community .

This risk doesn't exist

in

traffic between Member States because ,

before the abolition of

fiseal frontiers , works of art , although exempt at export to
another Member State , will be taxed at import on their total

value ( Article 11(3 ) of the 6th Directive ).

3 . By virtue of an express provision , the speeifie seheme applied
to imports of works of art , collectors items and antiques biT
taxable dealers is to apply under the same conditions equally to
importations by cultural organisations recognized as such by the

Member States .

D. Option

the taxable-dealer authorized to apply to

special
In general ,
seheme will supply the goods covered by the scheme to non- taxable
persons . However if the taxable dealer sells to other taxable
persons the margin seheme has some drawbacks . Actually the taxation
of the margin realised by the taxable dealer allows the avoidance
but it gives rise to double
of double taxation at his level ,
taxable
of
taxation

following

stage ,

that

i.e.

the

the

at

purchaser ,

because

in

principle

the

right

to

deduction

is

prohibited under the margin system ( as it is not possible to show

the amount of VAT on the invoice ).

In order to avoid a situation in which for the taxable buyer the

remnant of the initial tax is added to the remnant of the tax on

the dealers margin ,

it is proposed that for sales to such taxable

persons the taxable dealer may opt for the normal system .

Insofar as the taxable-dealer is thus led to use the normal and the

special systems at the same time because of

the nature of his

business , the same conditions are applied as in the case in A4 :

the keeping of separate accounts and the possibility for the Member

States only to allow deduction at the moment of sale .

Ad . Article 2

1 . This Article roust be read in conjunction with Article 1(c ). The two
provisions provide
in intra-Community traffic for taxation in the
Member State of departure , which anticipates the date of the abolition
of fiscal frontiers for all the goods covered by this proposal .
When fiscal frontiers are abolished , the provisions of Article 2 will
like the other transitional provisions in Article
become redundant ,
28 , and all intra-Community trade will be governed by taxation in the
Member State of departure , in accordance with the general principal to
be introduced by another draft directive . Article 1(c ), which concerns
works of art , antiques and collectors items , will on the contrary
frontiers
maintain its value even after

the abolition of

fiscal

because it will serve as a legal basis for taxing exports to third
countries and exempting importations into the Community .

2 . During the transitional period ,

as

the general principle of

the

6 th Directive of taxation at import continues , the technical solution

whieh results from the Sehul Judgements and set out in the Commission

communication in 1986 ( 1 ) must continue to be applicable to imports
made by private persons .
Thus the invoice made out by a taxable
dealer , tax inclusive but without the possibility of mentioning the
tax apart , constitutes evidence that the VAT has been paid on the
goods in one of the other Member States and consequently the method of
working out the VAT put forward in the Commission communication can
also be applied to them .
In order to facilitate the application of
this solution it is necessary to apply the tax to goods under the
special ««ystem at the same rate as applied to new goods of the same
kind . It is also neeessary that the rate of tax applied is stated on
the invoice to allow for the calculation of the remnant of tax .

( 1 ) O.J. n° C 13 of 21.01.1986 , p. 2

Proposai for a Council Directive

supplementing the common system of value added tax and amending
Articles 32 and 28 of Directive 77 / 388 / EEC - special arrangements for
second-hand goods , works of art , antiques and collector 's items

THE COUNCIL OF THE EUROPEAN COMMUNITIES

Having regard to the Treaty establishing the European Economic Community ,

and in particular Article 99 thereof .

Having regard to the proposal from the Commission ,

Having regard to the opinion of the European Parliament ,

Having regard to the opinion of the Economic and Social Committee ,

Whereas in accordance with Article 32 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 - Common system of value added tax : uniform
basis of assessement (1 ) ,
the Council is to adopt a Community taxation system to be applied to used
goods , works of art , antiques and collector 's items ;

as last amended by the Act of Accession of Spain and Portugal,

Whereas the present situation ,
continues to be marked by the application of very different
systems which cause distortion of competition and deflection of trade

in the absence of Community legislation ,

both internally and between Member States ; whereas these differences also
Include 9 lack of harmonization in the levying of the own resources of the
Community ; whereas consequently it is necessary to bring this situation to
an

end as soon as possible ;

( 1 ) OJ n°L 145 , 13.6.1977 , p. 1

-2-

in a number of judgments , noted the
Uhereas the Court of Justice has ,
need to attain a degree of harmonization which allows double taxation in

intra-Community trade to be avoided ;

Uhereas the objective of achieving a single market by 31 December
1992 means that Community rules with the purpose of avoiding as far as possible
double taxation and distortion of competition between taxable persons ,
must be adopted before that date ;

Uhereas the aim of the elimination of double taxation and distortion of

competition may be achieved by providing for
the same system both for the
period before and for the period after the realization of the single
market , which would in any event be a simpler solution ;

Uhereas , for certain items of a cultural nature , a special measure should
the conservation and enrichment of the cultural
be envisaged to promote

heritage of the Community ,

HAS ADOPTED THIS DIRECTIVE :

ARTICLE 1

Directive 77 / 388 / EEC is hereby amended as follows :

1 . Article 32 is replaced by the following :

" ARTICLE 32

Special arrangements for second-hand goods ,

works of art , antiques and collector's items .

A. Scope

1 . Member States shall apply value added tax to supplies of second-hand

goods , works of art , antiques and collector 's items ,

in accordance

with the following provisions .

The special arrangements shall not cover precious metals
and precious stones .
of objects as referred to in the previous
made of gold or any other precious metal

However , they shall apply to supplies

subparagraph

or containing precious

stones , where the value of such materials incorporated does not exceed

50 v. of the selling price of those objects .

2 . For the purposes of this Directive :

( a ) " second-hand goods" shall mean movable property that has been used

and is suitable for further use as it

is or

after repair , including all means of transport ;

( b )

"works of art " shall mean the objects listed at 1

in Annex H , with

the exception of those supplied by their creator or
his successors in title ;

( c )

-'collector ' s items " shall mean the objects listed at 2 of Annex H ,

except

when first supplied ;

( d )

" antiques" shall mean the objects listed at 3 of Annex H.

3 . The special arrangements shall apply to supplies of goods as referred

to in paragraph 1 where they are effected by a taxable person
dealer ") who acquires such goods in the course of his business from a
private person or from a taxable person who was not entitled to deduct
VAT when he acquired them , with a view to resale .
Any taxable person
engaged in the occupation of intermediary shall also be deemed to be a
taxable dealer if , in accordance with Article 5(4 ) ( c ) , he dispatches
goods as referred to in paragraph 1 under a sales or purchase conrmission contract .

(" taxable

4 . The special arrangements shall not apply to supplies of goods by a

taxable dealer where he has acquired them from a taxable person who
has invoiced the VAT in accordance with Article 22(3 ) or where they

have been imported by taxable dealer and

were subject to value added tax on

importation .

the special arrangements , the

Where his activities lead him to use the normal arrangements at the same time
separate
taxable
as
accounts , according to the
laid down by the Member States ,
for
Member States may oblige taxable dealers to exercise their right to
deduction for operations carried out under the normal arrangements only at

operations coming under one or other arrangement .

dealer

rules

shall

keep

the moment of supply .

B. General rules of application

1 . The taxable amount shall be the difference ,

for each transaction ,

between the selling price and the purchase price . The selling price shall be
the price charged by the taxable dealer without value added tax .
purchase price

shall be the tax-inclusive price paid by the taxable dealer

The

in order to simplify the procedure for
However , Member States may ,
in
levying
Article 29 , take as the taxable amount the difference recorded over

the tax and subject to the consultation provided for

each tax period between the total amount of supplies before tax and
The application of this
the total amount of purchases after
must not have the effect of giving rise to distortions of
provision

tax .

competition .

2 . The taxable dealer shall not have the right to deduct any tax paid at

the time of purchase of the goods which are the subject of supply by him .
The tax
invoice or any

supply may not be stated separately on the

document serving as an invoice .

relating to that

C. Rules for application to particular goods

For works of art ,

collector's

items and antiques

as referred to in

A(2)(b)(e ) and ( d ) the following shall also apply :

( a ) by way of derogation from Article 15(1 ) and ( 2 ), supplies of these

goods by a taxable dealer shall
dispatched or transported to a third country ;

not be exempt from tax where they are

( b ) by way of derogation from Article 2(2 ), these goods shall be exempt
where they are imported from a third country by a taxable dealer .

However , works of art and collector 's items which have been exported
with exemption from value added tax during the thirty-six months
preceding their importation by a taxable dealer shall not qualify
for exemption from tax on import .

( c ) these goods shall be exempt from tax where they are imported by
cultural organizations recognized as such by the Member State
concerned under the same conditions as those set out under ( b )

for taxable dealers .

D. Option

Taxable dealers who qualify for the special arrangements may
for each supply to taxable persons opt for application of the normal

5

value added tax arrangements .
A ( 4 ) second

subparagraph shall apply ."

In this case the conditions set out under

2 . The following paragraph 6 is added to Article 28 :

" 6 . Until the date of abolition of taxation on importation and remission of

tax on exportation in trade between Member States , the latter shall apply the
provisions set out below :

( a )

By way of derogation from Article 15 ( 1 ) and ( 2 ),

the supply by a

taxable dealer of goods as referred to in Article 32 A ( 2 )
shall be taxed ,
those goodsare dispatched or transported to another Member State .

in accordance with the provisions of that Article , where

( b ) By way of derogation from Article 2(2 ), goods as referred to in
Article 32 A(2 ) shall be exempt where they are imported from
another Member State by a taxable dealer of

the Member State of

importation .

( c ) Member States shall apply to the supply of goods

as referred to in

Article 32 A(2 )

a rate equal to that applied to the equivalent new

goods .

( d ) The invoice supplied by the taxable dealer within the meaning of
Article 32(B)(2 ) shall state the rate of VAT and show that it has

been paid so that double taxation can be avoided ."

2 . The Annex hereto is added as Annex H.

ARTICLE 2

1 . Member States shall take the measures necessary to comply with this

Directive not later than 1 January 1990 .

2 . Member States

shall inform the Commission of the provisions they have

adopted for the application of this Directive .

ARTICLE 3

This Directive is addressed to the Member States .

Done at

For the Council

ANNEX

" ANNEX H

DEFINITIONS OF WORKS OF ART , COLLECTOR 'S ITEMS AND ANTIQUES

1 . Works of art are those falling within the following categories :

- paintings , collages and similar decorative plaques , drawings and pastels ,

executed entirely by hand , other than plans and drawings for architectural ,
engineering , industrial , commercial , topographical or similar purposes ,
hand painted or hand decorated manufactured articles , theatrical scenery ,
studio backcloths

or the like of painted canvas .

- original engravings , prints and lithographs , being impressions produced
directly in black and white or in colour of one or of several plates
wholly executed by hand by the artist , irrespective of the process or
of the material employed by him , but not including any mechanical or
photomechanical process .

- original sculptures and statuary ,

in any material , but not including
mass-produced reproductions as works of conventional craftmanship of a
commercial character .

2 . Collector 's items are those falling within the following categories :

- postage or revenue stamps , stamp-postmarks , first-day covers , postal
stationery ( stamped paper ), and the like , used , or if unused not of
current or new issue in the country to which they are destined

- collections and collector 's pieces of zoological , botanical , mineralo -
palaeontological ,

archaeological ,

anatomical ,

gical ,
ethnographic or numismatic interest

historical ,

3 . Antiques are items , other than works of art or collector' s items , of an

age exceeding 100 years ."

ARCHIVES HISTORIQUES
DE LA COMMISSION

COLLECTION RELIEE DES
DOCUMENTS "COM"

COM (88) 846

Vol. 1988/0280

Disclaimer

Conformément au règlement (CEE, Euratom) n° 354/83 du Conseil du 1er février 1983 concernant
l'ouverture au public des archives historiques de la Communauté économique européenne et de
la Communauté européenne de l'énergie atomique (JO L 43 du 15.2.1983, p. 1) modifié en dernier
lieu par le règlement (UE) 2015/496 du Conseil du 17 mars 2015 (JO L79 du 25. 3.2015, p. 1), ce
dossier est ouvert au public. Le cas échéant, les documents classifiés présents dans ce dossier
ont été déclassifiés conformément à l'article 5 dudit règlement ou sont considérés déclassifiés
conformément aux articles 26(3) et 59(2) de la décision (UE, Euratom) 2015/444 de la
Commission du 13 mars 2015 concernant les règles de sécurité aux fins de la protection des
informations classifiées de l'Union européenne.

In accordance with Council Regulation (EEC, Euratom) No 354/83 of 1 February 1983 concerning
the opening to the public of the historical archives of the European Economic Community and the
European Atomic Energy Community (OJ L 43, 15.2.1983, p. 1), as last amended by Council
Regulation (EU) 2015/496 of 17 March 2015 (OJ L 79, 27.3.2015, p. 1), this file is open to the
public. Where necessary, classified documents in this file have been declassified in conformity
with Article 5 of the aforementioned regulation or are considered declassified in conformity with
Articles (26.3) and 59(2) of the Commission Decision (EU, Euratom) 2015/444 of 13 March 2015
on the security rules for protecting EU classified information.

In Übereinstimmung mit der Verordnung (EWG, Euratom) Nr. 354/83 des Rates vom 1. Februar
1983 über die Freigabe der historischen Archive der Europäischen Wirtschaftsgemeinschaft und
der Europäischen Atomgemeinschaft (ABI. L 43 vom 15.2.1983, S. 1), zuletzt geändert durch die
Verordnung (EU) Nr. 2015/496 vom 17. März 2015 (ABI. L 79 vom 25.3.2015, S. 1), ist dieser Akt
der Öffentlichkeit zugänglich. Soweit erforderlich, wurden die Verschlusssachen in diesem Akt in
Übereinstimmung mit Artikel 5 der genannten Verordnung freigegeben; beziehungsweise werden
sie auf Grundlage von Artikel 26(3) und 59(2) der Entscheidung der Kommission (EU, Euratom)
2015/444 vom 13. März 2015 über die Sicherheitsvorschriften für den Schutz von EU-
Verschlusssachen als herabgestuft angesehen.

COMMISSION OF THE EUROPEAN COMMUNITIES
ADDENDUM AU DOC . COM (88) 846 final
NE_CONCERNE__QUE LA VERSION EN .

COM ( 88 ) 846

final

/ 2

Brussels , 28 February 1989

Proposai

for a

COUNCIL DIRECTIVE

supplementing the common system of value added tax and amending
Articles 32 and 28 of Directive 77 / 388 / EEC - special arrangements for
second-hand goods , works of art , antiques and collector 's items

( presented by the Commission )

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of VAT ( whether these goods have be acquired on the internal market
or imported and subject to the normal VAT regime at import ) shall
be subject to the normal regime and that consequently the special
regime shall not be applied to then . In such a situation the normal
rules of deducting tax are applied , there is no risk of double
taxation and there is no reason to avoid applying the normal VAT
rules .

The same logic is behind the exclusion of new works of art and
collectors items from the special system : these obviously cannot
be subject to the special system when they are first sold ( for
works of art , when their author or his legal successor sells them ).
It is also evident that subsequent sales of these goods , insofar as
these are between taxable persons , are subject to the ordinary VAT
system .

of

of

of

the

works

items

question

difficult

Insofar as

these goods ,
the

recognized and accepted by

definition
and antiques has been answered by using

art ,
The
the
collectors
this constitutes an adequate
Combined Nomenclature .
the
representation of
Member States
seems
application of
for
desirable to make reference to it also for the application of the
to avoid a too rigid connection to a nomenclature
VAT . However ,
evolved for reasons other than the application of VA» and
to
facilitate
to be
needed , each category of goods is defined on the basis of the
current codes . To simplify the operative text the goods ere listed
in an Annex which will become Annex H of the 6th Directive .

in definition which are

later changes

customs

found

duty ,

it

Lastly in order to reduce as far as possible the risks of fraud ,
only sales of objects made of precious metals and gems , whose
market value is at least twice that of the materials contained , may

be subject to the special regime .

2 . Persons concerned by this proposal

special

The
applicable to professionals who buy with a view to resale .

regime which is

subject

the

of

this proposal

is