WRITTEN QUESTION No. 3490/97 by Giacomo SANTINI to the Commission. Increase in VAT rates in Italy
Date: 1997-11-03
Institutions: European Parliament, SANTINI
Subjects: Italy, VAT rate, national implementing measure, redemption, viticulture, wholesale trade

C 223/4

EN

Official Journal of the European Communities

17. 7. 98

(98/C 223/04)

WRITTEN QUESTION E-3490/97

by Giacomo Santini (UPE) to the Commission

(3 November 1997)

Subject: Increase in VAT rates in Italy

The  Italian  Government  has  recently  raised  the  VAT  rates,  manifestly  departing  from  the  EU  policy  of
harmonizing tax percentages.

Specifically as far as the Italian wine sector is concerned, wholesale traders are to be treated differently from
other taxable persons entitled to benefit from lower VAT rates under Article 34 of Decree 633/72 of the President
of the Republic.

Can the Commission say:

1.  what attitude it will adopt and what measures, if any, it will take vis-a‘-vis the Italian Government;

2.  whether the compensation provided for in the above Decree could be harmonized at the present level and

extended to other taxable persons?

Answer given by Mr Monti on behalf of the Commission

(30 January 1998)

According to the information available to the Commission so far, the new Italian measures on value added tax
(VAT) rates are fully in line with Directive 77/388/EEC of 17 May 1977 on the harmonization of the laws of the
Member States relating to turnover taxes › common system of value added tax: uniform basis of assessment (1)
(sixth VAT Directive) and especially with Articles 12(3)(a), 28(2)(i) and Annex H. The Commission welcomes
the abolition of the so-called parking rate as a move in the direction of a simpler and more harmonised system of
VAT rates which corresponds to its plans for a new common system of VAT.

The basis for Article 34 in the Italian Decree 633/72 is Article 25 of the sixth VAT Directive. The special flat-rate
scheme  for  farmers  in  Article  25,  which  was  devised  for  small  farmers  as  an  alternative  to  the  normal  VAT
scheme or to the special VAT scheme for small undertakings covered by Article 24 in the sixth VAT Directive,
was  to  apply  essentially  to  small  farmers  unable  to  comply  with  the  obligations  imposed  by  the  other  two
schemes. It should be pointed out that the scheme is not seen to be a means of financial support for small farmers.
Therefore,  the  principles  for  calculating  flat-rate  compensation  percentages  are  based  on  the  premise  that
flat-rate farmers should not receive refunds in excess of the VAT actually charged on their inputs. Also, the
general aim is to exclude from the flat-rate system those transactions which, though carried out by an agricultural
producer,  could  not  be  regarded  as  constituting  a  typically  agricultural  activity.  If  the  farmer  enters  into
competition with tradesmen, manufacturers and service undertakings, the farmer should be subject to the normal
scheme or the special scheme for small undertakings in Article 24, and only remain subject to the flat rate scheme
system for his agricultural activities. Indeed, as the special VAT scheme in Article 25 is an exception to the
normal  VAT  mechanism  it  should  be  subject  to  a  narrow  interpretation.  In  the  light  of  the  above  it  seems,
according to the Commission, inappropriate to include for example wholesale traders in the wine industry under
the special scheme for small farmers.

(1)  OJ L 145, 13.6.1977.

(98/C 223/05)

WRITTEN QUESTION E-3499/97

by Nikitas Kaklamanis (UPE) to the Commission

(10 November 1997)

Subject: Commission funding of the floating hospital (cid:145)Hippocrates(cid:146)

The floating hospital (cid:145)Hippocrates(cid:146) (formerly the (cid:145)Paros Express(cid:146)), which was to have come into operation on
completion of refitting, is rusting away unused in the port of Piraeus. The conversion of this passenger vessel into
a floating health centre with a helicopter pad to serve the isolated islands in the Aegean has already received
Commission funding of Drs 580 million (at current prices almost Drs 1 billion) without being made operational