PROPOSAL FOR A COUNCIL DIRECTIVE AMENDING DIRECTIVE 77/388/EEC AND INTRODUCING SIMPLIFICATION MEASURES
Date: 1992-11-04
Institutions: European Commission
Subjects: VAT, customs territory (EU), import, intra-EU trade, single market, tax harmonisation

COMMISSION OF THE EUROPEAN  COMMUNITIES 

C0M(92) 448  final 

Brussels, 4  November  1992 

PROPOSAL FOR A 

COUNCIL DIRECTIVE 

AMENDING  DIRECTIVE  77/388/EEC 

AND  INTRODUCING  SIMPLIFICATION  MEASURES 

(presented  by the Commission) 

EXPLANATORY MEMORANDUM 

I.  INTRODUCTION 
Council  Directive  91/680/EEC  of  16  December  1991 (-1) 
supplemented,  with  a view  to  completing  the  intentai market, 
the  common  system  of  value  added  tax  with  tla  provisions 
necessary  Co:  the abolition of all the checks and  formalities 
that now have to be carried  out when an  internal  frontier of 
the Conuaunity is crossed:  on 1 January  1993, the concepts of 
Importation and exportation will be definitively abolished for 
all  transactions  between  Member  States  and  will  be  limited 
solely  to  trade  with  third  territories.  The  Directive  also 
^ntroducas  transitional  arrangements  for  taxation  of  intra-
Communifcy trade: for a limited period and by way of derogation 
from  ; lie principle of taxation  in the Member  State of origin 
o£ 
the.  goods  or  services  supplied,  intra*-Community 
transactions  -  essentially  transactions  carried  out  between 
taxable: traders - will be subject to the tax at the rates and 
on v.he conditions obtaining in the Member State of destination 
of  the  goods  and  services  supplied.  Major  changes  have  thus 
been made to the sixth Directive  (77/388/EEC).*2'  In order to 
facilitate implementation on 1 January 1993, it is appropriate 
to refine and expand some of these new provisions. 

The  common  purpose  of  the  additional  measures  which  are the 
SUDjact  of  this proposal  is to  simplify  taxation procedures, 
for  both  traders  and  Member  States'  administrations, without 
altering  the  principles  of  taxation  and  the  rules  for 
declaring  taxable  transactions  laid  down  by  the  Directive of 
16 December 1991.  Five sets of provisions are proposed. 

First,  these  additional measures  clarify  the wording  of  some 
of  the  provisions  of  the  sixth  Directive,  as  amended  by 
Directive 91/680/EEC. 

Simplification  measures  are  also  introduced  for  the  tax 
treatment  of  transactions  effected  with  third  territories 
under  the  common  system  of  value  added  tax  but  relating  to 
goods which rank as Community goods under customs legislation. 
The proposed  simplifications  relate  to  both  the  presentation 
of  the  principles  of  taxation  and  the  application  to  these 

1  OJ No L 376 of 31 December 1991. 
2  OJ No L 145 of 13 June 1977, p. 1. 

transactions of the same tax provisions as those applicable 
to any non-Community goods entering the customs territory of 
the Community. 

For  intra-Community  trade  in  products  subject  to  excise 
duty, the  rules  for the  imposition  of value  added  tax are 
adapted  to  the  provisions  of  Directive  92/12/EEC  of  25 
February  1992*3'  on  the  general  arrangements  for  products 
subject  to  excise  duty  and  on  the  holding,  movement  and 
monitoring of such products.  These new measures obviate the 
need  for  traders  who  are  not  subject  to  the  general 
arrangements  for  taxing  their  intra-Community  acquisitions 
to  be  identified  for VAT  purposes  solely  because  they  buy 
products  subject  to  excise  duty  from  other  Kember  States « 
The procedures introduced for the purpose of applying axcise 
duties  are  used  for  the  purpose  of  applying  VAT.  This 
results not only  in an easing of the obligations regarding 
declarations  to  which  traders  are  subject  but  also  in  a 
reduction 
administrations in connection with VAT identifications. 

Member Statesc 

burden 

facing 

the 

of 

For  supplies  of  goods  and  services'4'  taxable  within  a 
Member  State  on  the  territory  of  which  the  trader  is  not 
established, the present text of the sixth Directive imposes 
obligations  which  differ  depending  on  the  Member State  in 
which these transactions are effected.  The purpose  of the 
new  proposals  is to  guarantee  that  these  transactions  are 
treated in the same way whatever the Member State concerned 
To  this  end,  the provisions  relating  to  the  parson  liable 
for payment of the tax are amended:  the principles set out 
in  Directive  77/388/EEC  are  confirmed  but  it  is  proposed 
that  the  provisions  which  at  present  are  only  options, 
available to each Member State, under Article 21(1)(a) apply 
throughout  the  Community.  Traders  can  thus  choose  between 
one of the following arrangements:  either they designate a 
tax  representative  who  will  fulfil  on  their  behalf  the 
obligations  incumbent  on all persons  liable  for payment of 
VAT,  or  the  person  for  whom  the  goods  or  services  are 
supplied  is designated  as the person  liable  for payment of 
the tax.  In the latter case, it would thus be possible for 
the  taxable  supplier  not to have to be  identified  for VAT 
purposes in a Member State where he is not established. 

The  last  set  of  additional  measures  relates  to  the 
changeover  from  the  provisions  in  force  until  31  December 
1992 to those which will enter into force on 1 January 1993. 
They concern all transactions which give rise to a movement 
of  goods  between  Member  States  and  which,  although  they 
began  before  1  January  1993,  i.e.  under  cover  of  an 

3  OJ No L 76 of 23 March 1992. 
4  Other than supplies of services referred to in Article 

21(1)(b). 

import/export procedure, will not be completed  until  after 
31  December  1992,  when  the  concepts  of  importation  and 
exportation  will  have  disappeared  for  the  Community's 
internal  regime.  Without  extra  common  measures  ensuring 
this  changeover,  such  transactions  could  result  in 
definitive  situations  of  either  double  taxation  or  non-
taxation,  thereby  creating  distortions  of  treatment within 
the Community. 

II.  PRESENTATION OF EACH OF THE PROVISIONS OF ARTICLE 1 

Point 1 

In  view  of  the  amendments  made  to  the  definition  of 
importation  of goods  (see point  2), Article  3(4) has  been 
made more explicit so as to avoid any risk of confusion with 
regard to the treatment applicable to transactivons effected 
with  the  Principality  of  Monaco  or  the  Isle  of  Man,  due 
regard being had to the conventions and treaties applicable 
to them. 

Point 2 

The definition of importation of goods is expanded so as to 
take  account  of  all  transactions  with  territories  within 
which the common system of value added tax is not applied, 
irrespective  of  the  way  in  which  these  transactions  are 
treated  and  classified  under  the  Community  customs 
provisions. 

Point 3 

The first  subparagraph  of Article 7(3) can, by definition, 
relate only  to goods  from third  countries which  are placed 
under  a  customs  regime  involving  suspension  of  the  import 
duties to which they are subject. Only points  (a), (b), (c) 
and  (d) of Article 16(1)(B) refer to these arrangements. 

The second  amendment  concerns  the provisions  applicable  to 
goods which, while ranking as Community goods under customs 
legislation,  must  give  rise  to  the  charging  of  VAT  as 
imports in that they come from territories within which the 
common  system  of value  added  tax  is not  applied  (parts of 
the  territory  of  the  Member  States  to  which  the  tax 
provisions of the Treaty establishing the European Economic 
Community  do  not  apply  or  which  are  excluded  from  the 
territorial  coverage  of the  sixth Directive; territories  -
or  parts  of  the  territory  -  of  countries  which  are  not 
members  of  the  Community  but  are  included  in  its  customs 
territory). 

The new wording makes it possible to ensure more effectively 
that these transactions  are covered by the same provisions 
as apply to any non-Community goods temporarily admitted to 
the Community's customs territory.  This combines in one and 
the samr  subparagraph provisions which at present appear in 
articles  14  and  33a.  This  amendment  represents  a  major 
simplification of the principles and rules for applying VAT 
to these transactions and, at the same time, makes the legal 
text less cumbersome  (see points 7 and 24) . 

Point 4 

Since  the  present  definition  of  the  place  of  supply  in 
relation  to  goods  supplied  on  board  ships,  aircraft  or 
trains during  intra-Community transport  could  give rise to 
confusion,  it  has  been  amended  in  order  to  clarify  the 
transactions to which the provision applies. 

Point 5 

The  purpose  of  the  amendment  is  to  confirm  that,  at 
importation,  the  value  for  customs  purposes  is  used  to 
determine  the  taxable  amount  for  VAT  purposes,  including 
imports of goods from territories which, while forming part 
of  the  customs  territory  of  the  Community,  are  third 
territories in the common VAT system. 

Point 6 

This  amendment  is merely  an  adjustment  reflecting  the  new 
wording of Article 10(3). 

Point 7 

This amendment follows from point 3. 

Point 8 

This amendment, which follows the logic of the completion of 
the  internal  market,  adapts  the  exemptions  on  exportation 
solely to relations with third countries or territories. 

Points 9, io and 11 

The text proposed under  these points is a rearrangement of 
the  provisions  which  currently  appear  in  the  second 
subparagraph  of  Article  28a(1)(a).  The  purpose  of  these 
amendments  is  twofold: 
(i)  to  simplify  the  text  by 
distinguishing  between  the  definition  of  acquisitions  on 
which tax is not to be charged and  the provisions relating 
to the determination and operation of the threshold at which 
this  derogation  applies,  and  (ii)  with  regard  to  taxable 
acquisitions, to make a clear distinction  between those to 
which  the  general  scheme  applies  and  those  covered  by 

5  e. 

special schemes  (acquisitions of products subject to excise 
duty  and  of  new  means  of  transport  made  by  traders  "below 
the  threshold",  acquisitions  of  new  means  of  transport  by 
individuals) .  A  new  paragraph  la  sets  out  the  conditions 
governing  the derogation  from  the principle  of taxation of 
all acquisitions made by a trader.  In addition, within this 
new  paragraph,  a  distinction  is  made  between  the  actual 
conditions  for  application  of  the  derogation  and  the 
information  to  be  taken  into  account  in  determining  the 
threshold  at which  the derogation  applies.  These  drafting 
changes also make  it possible  to confine  the obligation of 
identification  for VAT purposes  solely  to traders who are, 
automatically  or  by  choice,  covered  by  the  general  scheme 
for the taxation of acquisitions, thereby excluding traders 
taxable at destination solely  in respect of acquisitions of 
products  subject  to excise  duty.  These  amendments  explain 
the provisions presented  in points 13 and 21. 

Point 12 

This  provision  supplements  the  simplification  measures 
adopted  in respect  of the person  liable  for payment  of the 
ta 
taxable person  makes  in  a Member  State  in which  he  is not 
established  an intra-Community  acquisition  of goods for the 
purposes of a supply within that Member State. 

tax and  allows them to be effectively  implemented 

Point 13 

Because  traders  who  are  taxable  solely  in  respect  of 
acquisitions  of  products  subject  to  excise  duty  are  no 
longer  required  to  be  identified  for  VAT  purposes,  it was 
necessary  to  amend  the  conditions  under  which  such 
purchasers may receive the products exempt of the tax due in 
the  Member  State  from  which  the  goods  are  dispatched  or 
transported.  The wording of new point  (c) of Article 28c(A) 
now  refers  directly  to  the  formalities  laid  down  by 
Directive 92/13/EEC with regard to the movement  of products 
subject  to  excise  duty. 
These  provisions  thus  enable 
traders, and Member  States' administrations, to make use of 
the obligations  laid down with regard  to excise  duties for 
the purposes of applying VAT. 

Point  (d) added  to Article  28c(A) clarifies  and  adapts the 
exemptions  provided  for under  (a) , (b) and  (c) to cases of 
transfers  of  goods  treated  as  supplies  effected  for 
consideration. 

Point 14 

This  rearrangement  of  Title  E  is  designed  to  clarify  the 
conditions  under  which  the  exemptions  that  Member  States 
implement  pursuant  to  Article  16(1)  or  (2)  also  apply  to 
intra-Community trade. 

6 r. 

Points 15 and 16 

These provisions define the moment at which the tax becomes 
chargeable  for  both  intra-Community  acquisitions  of  goods 
and  intra-Community  supplies  of  goods  effected  exempt  of 
VAT. 

Points 17 and 18 

Additions  are  made  to  the  references  to  Article  11 
concerning  the  elements  to  be  taken  into  account  in 
establishing  the  taxable  amount,  in  particular  for  intra-
Community transfers of goods on which the tax is chargeable. 
For acquisitions of products subject to excise duty affected 
outside  the  duty-suspension  regime,  a  new  provision  is 
introduced which reduces the taxable amount where the person 
acquiring  the  goods  obtains  a refund  of  the  excise  duties 
paid in the Member State in which the products are released 
for consumption. 

Point 19 

During the period in which the transitional arrangements for 
taxing  trade  between  Member  States  apply,  the  tax  due  or 
paid  in  one  Member  State  may  not  be  deducted  In  another 
Member State;  it may be refunded only under the conditions 
laid down in Article 17(3) and  (4)«  Article 17(4) b-s  h&en 
expanded in order to guarantee this right to a refund in the 
case of traders who purchase goods or services in, or import 
goods into, a Member State in which they are not themselves 
liable  to  tax.  In  order  to  avoid  certain  forms  of  tax 
evasion or avoidance, the benefit of these provisions does 
not,  however,  extend  to  supplies  of  goods  transported  to 
another Member State by or on behalf of the person acquiring 
the goods. 

Point 20 

taxable 

transactions 

The purpose of the amendments made to Article 21(1)(a) is to 
make  it  possible  throughout  the  Community  for  caxable 
persons  not  established  in the Member  State  in which  they 
effect 
tax 
representative  or  the  person  for  whom  the  transaction  is 
effected as the person liable for payment of the tax,  As a 
result  of  this  provision,  such  traders'  obligations 
regarding declarations can be eased without any dilution of 
the  principles  adopted  with  regard  to  the  definition  of 
transactions  subject  to  VAT  and  the  place  of  taxation  of 
such  transactions.  Nevertheless,  this  option  should  not 
permit an  individual to be designated  as the person  liable 
for payment of the tax. 

designate 

to 

a 

7  &. 

Similarly, with  respect  to  supplies  of  services  for which 
the transitional  arrangements  alter  the place  of taxation, 
the customer may not be the person liable for payment of the 
tax  unless  he  is  a  taxable  person  or  a  non-taxable  legal 
person identified for VAT purposes. 

Point 21 

The purpose of these amendments is to ensure that any trader 
covered  by  the 
general  scheme  for  taxation  of  intra 
Community  acquisitions  of  goods  is  given  a  VAT 
identification  number  and  is  thus  able  to  receive  from 
another Member State goods exempt from the tax due in that 
other Member State. 

The  amendment  to Article  22(11)  follows  from  points  9,  10 
and 11. 

Point 22 

Traders not established within a Member State do not qualify 
for the tax exemption under Article 24(2) in order to ensure 
that no limitation is imposed on their right to deduct input 
tax which  they  exercise  in the Member State  in which  they 
are established. 

Point 23 

Article  28n  implements  the  measures  necessary  for  the 
changeover  from  the  provisions  in  force  until  31  December 
1992 to those which will enter into force on 1 January 1993. 

However,  VAT  will  not  have  been  charged  on  certain 
importations of goods effected prior to 1 January 1993:  for 
example,  in  the  case  of  goods  placed  under  a  transit  or 
temporary  importation  regime, the  chargeable  event  for the 
tax on importation would have been deferred until the goods 
were  removed  from  that  régime t  in  accordance  with  the 
provisions in force before 1 January 1993,  These provisions 
concern  not  only  goods  imported  from  third  countries, but 
also intra-Community trade.  So as to avoid a hiatus in the 
conditions governing the taxation of these transactions, the 
benefit of the provisions  in force prior to  1 January  1993 
i»  prolonged  until  the  goods  are  removed  from  these 
"suspensive" regimes  (paragraph  1) ,  At the same time, and 
in  order  to  avoid  situations  of  non-taxation,  paragraph  2 
treats the removal  from these regimes  as an  importation of 
goods  in  accordance  with  the  provisions  applicable  with 
effect  from  1 January  1993, while  paragraph  3 defines  the 
place where this importation takes place. 

8 H 

These  provisions  ensure  that  transactions  effected  in 
similar  conditions  do  receive  equivalent  treatment.  All 
importations  of  goods  from  other  Member  States,  by 
definition effected before 1 January 1993, are taxed in the 
same way, whether or not the chargeable event giving rise to 
the tax  has been  deferred. 
As  for  importations  of goods 
from third countries effected before 1 January 1993 but not 
yet taxed at that date, the same provisions apply as if they 
had  been  effected  after  31 December  1992: these  goods  are 
deemed not to have entered the Community until the moment at 
which the regime under which they were placed  in 1992 - or 
Consequently, Article  7(3) can 
before - comes to an end. 
be applied to them. 

Paragraph  2  also  treats  the  end  of  certain  internal 
Community  transit  operations  in  the  same  way  as  an 
importation  of  goods. 
This  treatment  is  nevertheless 
subject to  several  limitations.  First,  it applies  only to 
transit operations initiated for the purposes of a supply of 
taxable goods effected prior to 1 January  1993.  Any supply 
of goods effected after 31 December 1992 by a taxable person 
is  automatically  covered  by  the  transitional  arrangements 
for  the  taxation  of  trade  between  Member  States. 
In 
addition,  such  treatment  applies  only  to  supplies  of goods 
which have qualified,  or are eligible,  for an exemption  in 
the Member  State from which the transport  leaves, by virtue 
of  the  fact  that  the  goods  are  being  exported  to  another 
This  restriction  consequently  avoids 
Member  State. 
situations of double taxation. 

By  way  of  derogation  from  these  principles  of  taxation, 
special measures are taken so that the tax is not charged in 
cases where  goods are re-exported  outside  the Community  or 
redispatched  to  the  Member  State  from  which  they  were 
temporarily exported.  These measures also apply to means of 
transport  (i) where these have been acquired  or imported in 
accordance with the general conditions of taxation  in force 
on  the  domestic  market  of  a Member  State,  (ii) where  they 
were  first  put  into  service  before  1 January  1988,  or 
(iii) where the amount of the tax due is insignificant. 

These special measures make for considerable  simplification 
of the rules for taxing means of transport which are placed 
under  a  national  VAT-exempt  temporary  importation  regime 
prior to 1 January  1993 and which are not removed  from this 
regime by 31 December 1992. 

Point 24 

This amendment follows from the provisions added to Article 
7(3). 

<M 

Proposal for a 

COUNCIL DffiECTTVE 

amending Directive 77/388/EEC 

and introducing simplification measures 

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  Article  3  of  Directive  91/680/EEC*  amending 

the  Sixth  Directive 

77/388/EEC  of  17 May  19772 sets  1 January  1993 as the date of the entry  into  force 

of these provision in all the Member States; 

Whereas in order to facilitate  the application  of  these provisions  and  to introduce the 

simplifications needed, it is necessary to complete the common  system of  value added 

tax, as applicable on  1 January  1993, so as to clarify  how the tax shall apply to certain 

operations  carried  out  with  third  territories  and  certain  operations  carried  out  inside 

the Community,  as well to define  the transitional  measures between  the provisions in 

force on 31 December  1992 and those which will enter into force on  1  January  1993; 

^J  No L 376 of 31.12.  1991 
2OJ No L  145 of  13.6.1977, p 1 

2i-

Whereas in order to guarantee the neutrality of the common system of value added tax 

in respect of  the origin  of  goods  the concept  of  a third territory  and  the definition  of 

an import must be completed; 

Whereas goods which for customs purposes do not satisfy  the conditions  laid  down in 

Articles  9  and  10  of  the  Treaty  and  to  which  customs  duty  suspension  arrangements 

also apply in respect of value added tax, remain subject to the specific  value added tax 

rules  when  leaving  the  duty  suspension  arrangements;  whereas  for  reasons  of 

transparency it would appear necessary to specify  the application of this principle; 

Whereas it is necessary to state the definition  of  the place of taxation of  goods  sold on 

board a vessel,  aircraft or train carrying out a movement inside the Community; 

Whereas the transitional  regime of  taxation of  trade between  the Member  States  must 

be  completed  to  take  account  both  of  the  Community  provisions  relating  to  excise 

duties and the need  to clarify  and simplify  the modalities of  the application  of  the tax 

to certain operations carried out between the Member States as from  1 January 1993; 

Whereas Directive 92/12/EEC1  of  25  February  1992 on the general  arrangements  for 

products subject to excise duty and on the holding,  movement and monitoring  of  such 

products  lays  down  the  procedures  and  obligations  in  relation  to  declarations 

particular  to  the  shipment  of  such  products  to  another  Member  State;  whereas  as  a 

result the method of applying tax to certain supplies and intra-Community  acquisitions 

of products liable to excise duties can be simplified  to the benefit  both of  the persons 

liable to pay tax and the competent administrations; 

Whereas it is necessary to define  the field of application of  the exemptions  referred  to 

in  Article  28c;  whereas  it  is  also  necessary  to  add  to  the  provisions  concerning  the 

chargeability  of  the tax  and  the  means  for  determining  the  taxable  amount  of  certain 

intra-Community operations; 

Whereas  for  the  taxable  operations  in  the  domestic  market  which  are  carried  out 

during  the period  laid  down in  Article  281 by  taxable persons  not  established  in  that 

country,  other than supplies of  services  for which  the user is  liable,  it  is  necessary  to 

guarantee an equivalent  treatment in all  the Member States;  whereas  to achieve  this it 

is necessary that the provisions concerning  the person liable to tax are harmonised and 

that  all  the  Member  States  apply  the  normal  regime  of  taxation  to  these  operations; 

whereas these provisions allow,  under certain conditions,  to simplify  taxation of intra-

Community  acquisitions  of  goods  made  in  the  Member  State  referred  to  in  Article 

28b(A)(l); 

1  OJ No L 76 of  23.3.92 

Whereas in order to take account of  the provisions relating  to the person liable to pay 

tax in the domestic  market and to avoid certain forms of  fiscal  fraud or evasion,  it  is 

necessary  to lay down the Community provisions concerning  the repayment of  the tax 

to taxable persons not resident in the country  referred  to in Article  17(3)  as  modified 

by Article 28f ; 

Whereas the suppression as from 1 January  1993 of  taxation at import and détaxation 

at export for  trade between the Member States makes it necessary  to have  transitional 

measures in  order  to  assure  the  neutrality  of  the  common  system  of  value  added  tax 

and to avoid situations of double-taxation or non-taxation; 

Whereas  consequently  it  is  necessary  to  lay  down  special  provisions  for  the  case 

where  a  Community  procedure,  started  before  1 January  1993  for  the  purposes  of  a 

supply effected  before  that date by a taxable person acting as such in respect of  goods 

dispatched  or  transported  to  another  Member  State,  is  not  completed  until  after  31 

December  1992; 

Whereas  these  provisions  should  also  apply  to  taxable  operations  made  before  1 

January  1993  to  which  particular  exemptions  were  applied  which  as  a  result  delayed 

the taxable event; 

Whereas  it  is  also  necessary  to  lay  down  special  measures  for  means  of  transport 

which,  not  having  been  acquired  or  imported  subject  to  the  general  domestic  tax 

conditions  of  a  Member  State,  have  benefited,  by  the  application  of  national 

measures,  from  an  exemption  from  tax  because  of  their  temporary  import  from 

another Member State; 

Whereas  the  application  of  these  transitional  measures,  both  in  relation  to  trade 

between  the  Member  States  and  operations  with  third  territories,  supposes  the 

finalising of  the  definition  of  the  operations  to  be  submitted  to  taxation  as  from  1 

January  1993  and  to  lay  down  for  them  the  concepts  of  the  place  of  taxation,  the 

taxable event and the chargeability of the tax, 

Whereas it is accordingly necessary to amend Directive 77/388/EEC, 

HAS ADOPTED THIS DIRECTIVE: 

Article 1 

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

(1) Article 3 (4) shall be replaced by the following: 

H4.  By  way  of  derogation  from  paragraph  1,  in  view  of  the  conventions  and  treaties 

applicable  to  them,  the  Principality  of  Monaco  and  the  Isle  of  Man  shall  not  be 

treated as third territories. 

Member  States  shall  take  the  measures  necessary  to  ensure  that  transactions 

originating in or intended for: 

-the  Principality  of  Monaco  are  treated  as  transactions  originating  in  or  intended 

for the French Republic, 

-the Isle of Man are treated as transactions originating in or intended for the United 

Kingdom of Great Britain and Northern Ireland." 

(2) Article 7(l)(b)  shall be replaced by the following: 

"(b) the entry  into  the  Community  of  goods from a  third  territory,  other  than  the 

goods covered by (a)." 

(3) In Article 7(3): 

• 

first  sub-paragraph add "(a),(b),  (c) and (d)H after  "Article 16(1)(B)"; 

second  sub-paragraph,  the  expression  "under  a  temporary  import  regime  in 

exemption  from  value  added  tax  or"  shall  be  added  after  the  expression  "on 

entry into the Community,"; 

the following  sub-paragraph shall be added 

"For the application of the second  sub-paragraph,  "a temporary import regime 

with exemption from VAT" refers  to Directive  85/362/EEC  0)  as  well as to 

the  customs  regime  of  temporary  importation  in  total  exemption  to  import 

duties  which  the goods could  have benefited  from  if  they  had  been  imported 

within the meaning of paragraph 1(a). 

(!)  OJ No L 192 of 24.7.85, p 20' 

(4) Article 8(l)(c) shall be replaced by the following: 

"(c) in the case where the supply is made to passengers on board  a ship, aircraft  or 

train  during  an  intra-Community  transport  of  passengers:  at  the  place  of  the 

departure of the transport. In the case of a return trip, the return leg is considered 

to be a seperate transport. 

For the purposes of applying this provision: 

• 

"intra-Community  transport  of  passengers"  shall  mean  any  transport  of 

passengers where the place of departure and  the point of arrival are situated 

on the territory of different  Member States; 

•  "the place of departure of an intra-Community  transport of passengers" shall 

mean  the  first  point  of  passenger  embarkation  foreseen  within  the 

Community; 

•  "the point  of  arrival  of  an  intra-Community  transport  of  passengers"  shall 

mean  the  last  point  of  disembarkation  of  passengers  foreseen  within  the 

Community 

(5) Article  11(B)(1)  shall be replaced by the following: 

"1.  The  taxable  amount  shall  be  the  value  for  customs  purposes,  determined  in 

accordance with the Community provisions in force,  this shall also apply for the 

import of goods referred to in Article 7(l)(b)." 

(6) Article  12(l)(b)  shall be replaced by the following: 

"(b)  In  the  cases  provided  for  in  the  second  and  third  sub-paragraphs  of  Article 

10(3),  the rate applicable shall be that in force at the time when the tax becomes 

chargeable.", 

(7) Article  14(l)(c)  shall be deleted. 

(8)  In  Article  15  point  2  "The  supply  of  goods  dispatched  or  transported  to  a 

destination  outside  the  Community  by  on  behalf  of  a  purchaser  not  established 

within  the  territory  of  the  country"  shall  be  replaced  by  "The  supply  of  goods 

dispatched or transported  to a destination  outside the Community  by on behalf  of 

a purchaser not established within the Community", 

(9) Article 28a(l)(a) second sub-paragraph shall be replaced by the following: 

"By  way  of  derogation  from  the  first  sub-paragraph  intra-Community 

acquisitions  of  goods  made under  the  conditions  set  out  in  paragraph  la  by  a 

taxable person  or  non-taxable  legal  person  shall  not  be  subject  to value added 

tax;" 

(10) In Article 28a (1) a new point (c) shall be added as follows; 

"(c) The intra-Community acquisition of goods which are subject  to excise duties 

effected  for  consideration  within  the  territory  of  the  country  by  a  taxable 

person, or a non-taxable legal person, who qualifies for the derogation  referred 

to in point  (a) second  sub-paragraph,  and  for  which  the excise duties become 

chargeable  within  the  territory  of 

the  country  pursuant 

to  Directive 

92/12/EEC<1). 

(*)OJNoL24of23.3.1992' 

(11) In Article 28a the following paragraph shall be inserted: 

"(la)  The derogation  provided  for  in  the  second  sub-paragraph  of  paragraph  1(a) 

applies to intra-Community acquisitions of goods  effected: 

»  by  a  taxable  person  who  is  eligible  for  the  flat  rate  scheme  provided  for  in 

Article  25,  by  a  taxable  person  who  carries  out  only  supplies  of  goods  or 

services  in  respect  of  which  value  added  tax  is  not  deductible,  or  by  a  non 

taxable legal person, 

10 

• 

for a total  amount  not exceeding,  during  the current  calendar  year,  a  threshold 

which  the  Member  States  shall  determine  but  which  may  not  be  less  than  the 

equivalent in national currency of ECU  10 000, 

and 

•  provided  that  the  total  amount  of  intra-Community  acquisitions  of  goods  did 

not,  during  the previous  calendar  year,  exceed  the  threshold  referred  to  in  the 

second indent. 

The  threshold  which  serves  as  the  reference  for  the  application  of  the  above 

shall consist of the total amount,  exclusive of value added tax due or paid in the 

Member  State  from  which  the  goods  are  dispatched  or  transported,  of  intra-

Community  acquisitions of  goods other than new  means of  transport and  other 

than goods subject to excise duty." 

(12) In Article 28b A(2) the following  sub-paragraph shall be added: 

"  For  the  application  of  the  first  sub-paragraph,  the  intra-Community  acquisition  of 

goods  is  deemed  to  have  been  subject  to  tax  in  the  Member  State  of  arrival  of  the 

dispatch or transport of  the goods insofar  as the person acquiring  the goods  establishes 

that  he  has  made  a  subsequent  taxable  supply  in  that  Member  State  for  which  the 

purchaser has been designated liable for the tax due. " 

11 

(13) In Article 28c (A): 

•  point (c) shall be replaced by the following: 

"(c)  the  supply  of  goods  subject  to  excise  duty  dispatched  or  transported  to 

the purchaser,  by  the vendor,  by  the purchaser or on  his behalf,  outside 

the territory referred  to in  Article  3  but inside  the  Community,  effected 

for  taxable  persons  or  non-taxable  legal  persons  who  qualify  for  the 

derogation  set  out  in  Article  28a(l)(a)  second  sub-paragraph,  when  the 

dispatch  or  transport  of  the  goods  is  carried  out  in  conformity  with 

Article 7(4) and (5), or Article  16 of Directive 92/12/EEC. 

This  exemption  shall  not  apply  to  supplies  of  goods  subject  to  excise 

duty  effected  by  taxable  persons  who  benefit  from  the  exemption  from 

tax set out in Article 24"; 

• 

the following  shall be added: 

"(d)  the  supply  of  goods,  in  the  sense  of  Article  28a(5)(b),  which 

benefit  from the exemptions set out above if  they have been made 

on behalf of another taxable person. " 

12 

14) Article 28c(E)  shall be replaced by the following: 

"E.  Other Exemptions 

(1) The following paragraph shall be added to Article 16: 

"(la) When they take up the option provided for in paragraph  1,  the Member 

States shall take the measures necessary in order to ensure that the intra-

Community acquisitions of  goods placed under one of  the regimes  or in 

one  of  the  situations  foreseen  in Article  16(1)(B)  benefit  from  the  same 

provisions  as  supplies  of  goods  carried  out  within  the  territory  of  the 

country under the same conditions." 

(2) In Article  16(2): 

• 

-"intra-Community acquisitions of goods made by a taxable person and" shall be 

added  after  "may opt  to exempt"  and  "outside  the  Community"  shall  be  added 

after  "export them"; 

• 

-the following  sub-paragraphs shall be added: 

"When  they  take  up  this  option  the  Member  States  shall,  subject  to  the 

consultation provided  for in  Article  29,  extend  the benefit  of  this  exemption  to 

intra-Community  acquisitions  of  goods  by  a  taxable  person,  imports  for  and 

supplies  of  goods  to  a  taxable  person  intending  to  supply  them,  as  they  are  or 

after  processing,  under  the  conditions  laid  down  in  Article  28c(A),  as  well  as 

supplies  of  services  relating  to  such  supplies,  up  to  a  maximum  equal  to  the 

value of  his supplies of goods effected  under the conditions laid down in Article 

28c(A) during the preceding  12 months. 

13 

The Member  States may  set a unique maximum amount  for  transactions  which 

they exempt under the previous sub-paragraphs." 

(15) Article 28d(3) shall be replaced by the following: 

"(3) By way of derogation from paragraph 2, tax shall become chargeable on 

the  issue  of  the  invoice  provided  for  in  Article  22(3)(a)  first  sub 

paragraph  where the invoice is issued  to the person acquiring  the goods 

after  the date of the taxable event but before  the  15th day of  the month 

following that during which the taxable event occurs." 

(16) In Article 28d(4) second sub-paragraph  "after  the date of the taxable event but" 

shall be added after "the invoke is issued". 

14 

(17) In Article 28e(l); 

-first  sub-paragraph,  the second sentence shall be replaced by: 

"In particular,  in  the  case  of  the  intra-Community  acquisition  of  goods 

referred  to  in  Article  28a(6),  the taxable amount  shall  be  determined  in 

accordance with Article  11 (A)(1)(b),(2) and (3)." 

-second sub-paragraph, the following  sentence shall be added: 

"When, after the moment the intra-Community  acquisition of  goods  was 

effected,  the  acquirer  obtains  the  refund  of  excise  duties  paid  in  the 

Member State from which the goods were dispatched or transported,  the 

taxable amount shall be reduced  accordingly  in the Member State where 

the acquisition took place. " 

(18)  In  Article  28e  paragraphs(2)  and  (3)  shall  be  renumbered  (3)  and  (4)  and  a 

new paragraph (2) shall be inserted as follows: 

"(2)  For  the  supply  of  goods  referred  to  in  Article  28d(A)(d),  the  taxable 

amount shall be determined in accordance with Article  11(A)(1)(b),  (2) and 

(3)." 

15 

(19)The following  sub-paragraph  shall  be  added  to  Article  17(4)  as  modified  by 

Article 28f: 

"For the application of the above: 

(a)  the taxable persons  referred  to in  Article  1 of  Directive 79/1072/EEC 

shall  also  be  considered  for  the  application  of  the  said  Directive  as 

taxable persons who are not established  in the country  when,  inside the 

territory  of  the  country,  they  only  carry  out  supplies  of  goods  and 

services to a person who has been designated as the person liable to pay 

the tax in accordance with Article 21(l)(a), 

(b)  the  taxable  persons  referred  to  in  Article  1 of  Directive  86/560/EEC 

shall  also  be  considered  for  the  application  of  the  said  Directive  as 

taxable persons who are not established  in the Community  when,  inside 

the territory  of  the country,  they  only  carry  out  supplies  of  goods  and 

services to a person who has been designated as the person liable to pay 

the tax in accordance with Article 21(l)(a), 

(c) Directives 79/1072/EEC and 86/560/EEC  shall not apply to supplies of 

goods  which  are,  or  may  be  exempted  under  Article  28c(A)  when  the 

goods supplied  are dispatched  or  transported  by  the acquirer  or  for  his 

account." 

16 

(20) In Article 28g: 

.— Article 21(l)(a)  shall be replaced by the following: 

"(a)  taxable  persons  who  carry  out  taxable  transactions  other  than  supplies  of 

services referred to in (b). 

Where the taxable supply of goods or services is effected  by a taxable person 

not established in the country : 

-the Member States shall authorise this taxable person to designate another 

taxable person,  or a non taxable legal entity,  established or identified  for 

value  added  tax  purposes  in  that  country  as  liable  for  the  tax.  A  tax 

representative or the person for whom the taxable transaction was carried 

out may be designated for this purpose; 

-if  this designation  is  not  made the Member  States  may  take  measures  to 

ensure that the tax is payable by another taxable person,  or a non taxable 

legal entity,  established  or identified  for value added tax purposes in that 

country.  Inter  alia  a  tax  representative  or  the  person  for  whom  the 

taxable transaction was carried out may be designated for this purpose. 

Member  States  may  also  provide  that  someone  other  than  the  taxable  person 

shall be held jointly and severally liable for payment of the tax;" 

17 

-  Article 21(l)(b)  shall be replaced by the following; 

"(b)  persons  to  whom  services  covered  by  Article  9(2)(e)  are  supplied,  or 

persons,  identified  for  value  added  tax  purposes  in  the  country,  to  whom 

services referred  to in Article 28b  (C),(D)  or (E) are supplied,  when the service 

is  carried  out by  a taxable person  established  abroad;  however,  Member  States 

may  require  that  the  supplier  of  the  service  shall  be  held jointly  and  severally 

liable for payment of the tax;" 

~  Article 21(l)(d)  shall be replaced by the following: 

"(d) any person effecting  a taxable intra-Community acquisition of goods. 

Where an intra-Community  acquisition of  goods is effected  by  a taxable person 

or a non-taxable person established abroad: 

-  the Member  States shall authorise this person to designate another taxable 

person,  or  non  taxable  legal  entity,  established  or  identified  for  value 

added  tax  purposes  in  that  country  as  liable  for  the  tax.  A  tax 

representative may be designated as that other person; 

-  if  this designation  is  not  made,  the Member  States  may  take measures  to 

ensure that the tax is payable by another taxable person,  or a non taxable 

legal entity,  established or identified  for value added tax purposes in that 

country.  Inter  alia  a  tax  representative  may  be  designated  for  this 

purpose. 

18 

Member  States  may  also  provide  that  someone  other  than  the person  who  has 

carried  out  the  intra-Community  acquisition  shall  be  held jointly  and  severally 

liable for payment of the tax;" 

(21) In Article 28h: 

— in  Article  22(l)(c)  first  indent  "and  other  than  a  supply  of  goods  or 

services  to  a person  who  has been  designated  as  the person  liable  for  the 

tax  in  accordance  with  Article  21(l)(a)"  shall  be  added  after  "in 

accordance with Article 21(l)(b)"; 

-  in Article 22(l)(c)  the following  indent shall be inserted after the second indent: 

"-every  taxable  person  who,  within  the  territory  of  the  country,  effects 

intra-Community  acquisitions of  goods for the purposes of his operations 

relating  to the economic  activities  referred  to in  Article  4(2)  carried  out 

abroad," 

~  in  Article  22(11)  the  following  shall  be  added  at  the  start  of  the 

paragraph: 

"In the case of intra-Community  acquisitions  of  products subject to 

excise duty referred to in Article 28a(l)(c)  as well as" 

(22) Article 23? shall be replaced by the following: 

"Article 28i 

Special scheme for small undertakings 

The following  sub-paragraph shall be added to Article 24(3): 

"In all circumstances  supplies of  new  means of  transport  effected  under 

the conditions laid down in Article 28c (A) as well as supplies of goods 

and  services effected  by a taxable person  who is  not  established  in the 

territory of the country  shall be excluded  from  the exemption  from  tax 

under paragraph 2." 

(23) The following Article shall be added: 

"Article 28n 

Transitional measures 

1. When goods: 

—entered the territory of the country within the meaning  of  Article 

3 before  1 January 1993, 

and 

—were placed, on entry into the territory of that country,  under one 

of  the  arrangements  referred  to  in  Article  14(l)(b)  or  (c),  or 

under one of the regimes referred  to under Article  16(1)(A), 

20 

and 

—have not left this regime before  1 January 1993, 

the  provisions  in  force  at  the  moment  the  goods  were  placed 

under  that  regime  shall  continue  to  apply  for  the  period,  as 

determined  by  those  provisions,  the  goods  remain  under  that 

regime. 

2.  The following  shall be  deemed  to be an import  within  the  meaning  of  Article 

7(1): 

(a)  the  removal,  including  irregular  removal,  of  goods  from  the  regime 

referred  to in Articlel4(l)(c)  under which the goods  were placed  before 

1 January  1993 under the conditions set out in paragraph 1; 

(b)  the  removal,  including  irregular  removal,  of  goods  from  the  regime 

referred to in Article  16(1)(A)  under which the goods were placed  before 

1 January  1993 under the conditions set out in paragraph 1; 

(c)  the termination  of  a Community  internal transit operation  started  before 

1 January  1993 in the Community  for the purpose of  the supply of  goods 

for  consideration  made  before  1 January  1993  in  the  Community  by  a 

taxable person acting as such, 

(d)  the  termination  of  an  external  Community  transit  operation  started 

before  1 January 1993; 

21 

(e)  any  irregularity  or  offence  committed  during  a  Community  internal 

transit  operation  entered  into  under  the conditions  set  out  in  (c))  or any 

Community external transit operation referred to in (d). 

3.  In  the  cases  referred  to  in  paragraph  2,  the  place  of  import,  in  the 

meaning  of  Article  7(2),  shall  be  the  Member  State  within  the  territory 

of  which the goods  cease  to be covered  by the regime  under  which  they 

were placed before  1 January 1993. 

4.  By  derogation  to  Article  10(3),  the  import  of  the  goods  in  the  sense  of 

paragraph  2  shall  terminate  without  the  occurrence  of  chargeable  event 

when: 

(a)  the  imported  goods  are  dispatched  or  transported  outside  the 

Community within the meaning of Article 3; 

or 

(b)  the imported  goods,  within  the  meaning  of  paragraph  2(a),  are 

other than a means of  transport and are dispatched  or  transported 

to  the  Member  State from which  they  were  exported  and  to  the 

person who exported them; 

or 

(c)  the imported goods,  within the meaning  of paragraph 2(a),  are 

means  of  transport  which  were  acquired  or  imported,  before  1 

January  1993  in  accordance  with  the  general  conditions  of 

taxation  in  force  on  the  domestic  market  of  a  Member  State, 

within the meaning of Article 3, and/or have not been  subject by 

reason  of  their exportation  to  any  exemption  from  or  refund  of 

VAT. 

22 

This condition is deemed  to be fulfilled  when the date of  the first 

use of  the means of  transport was before  1 January  1988  or when 

the amount of tax due because of the importation is  insignificant. 

(24) The third indent of Article 33a (l)(b)  shall be deleted. 

Article 2 

1.  The Member States shall bring into force  such laws,  regulations 

and administrative provisions  as are necessary  to conform  with 

this Directive on  1 January 1993. 

2.  Member  States  shall  inform  the  Commission  of  the  provisions 

which they adopt to apply this Directive. 

3.  Member  States  shall  communicate  to  the  Commission  the  texts 

of  the  provisions  of  national  law  which  they  adopt  in  the  field 

governed by this Directive. 

4.  When  Member  States  adopt  such  measures  they  shall  include  a 

reference  to  this  Directive  or  shall  accompany  them  by  such  a 

reference  on  the  occasion  of  their  official  publication.  The 

manner in which such references  shall be made shall be laid down 

by the Member States. 

Article 3 

This Directive is addressed to the Member States. 

Done at Brussels, 

23 

For the Council 

The President 

ÎA -

STATEMENT OF IMPACT ON SMEs AND EMPLOYMENT 

Council  Directive  91/680/EEC  of  16  December  1991 
supplemented,  with  a  view  to  completing  the  internal 
market,  the  common  sustem  of  value  added  tax  with  the 
provisions  necessary  for  the  abolition  of  the  fiscal 
frontiers.  Major  changes  have  thus  been  made  to  the 
sixth VAT Directive  (77/388/EEC).  In order to facilitate 
implementation  on  1 January  1993,  it  is  appropriate  to 
refine and expand some of these new provisions. 

This is purpose of this Directive.  Therefore, the impact 
on  SMEs  of  the  proposed  Directive  is  identical  to  that 
set out in the proposal for a Directive on the removal of 
fiscal frontiers  (see statements of impact annexed to the 
documents COM(87)S22 final/2 and COM(90) 182 final). 

FINANCIAL STATEMENT 

Application  of  this  Directive  will  not  affect  the 
Community's own ressources. 

ïï. 

ISSN 0254-1475 

COM (92) 448 final 

DOCUMENTS 

09 

Catalogue number : CB-CO-92-466-EN-C 

ISBN 92-77-48692-9 

Office  for Official  Publications of the European Communities 

Lr2985 Luxembourg