Opinion of the European Monetary Institute at the request of the Austrian Ministry of Finance under Article 109f (6) of the Treaty establishing the European Community (the “Treaty”) and Article 5.3 of the Statute of the EMI (the “Statute”) on a draft law introducing a federal law which stipulates measures in fiscal law accompanying the introduction of the euro and amending the 1998 “Einkommenssteuergesetz” (Income Tax Act) as well as the “Zollrechtsdurchführungsgesetz” (Customs Act Implementation Act); Euro Fiscal Accompaniment Act (the “Draft Law”) (CON/98/02)
Date: 1998-02-13
Institutions: European Monetary Institute
Subjects: Austria, conversion rate, customs regulations, euro, exchange rate, institutional activity, monetary policy, tax law, tax on income

13 February 1998

OPINION OF THE EUROPEAN MONETARY INSTITUTE

at the request of the Austrian Ministry of Finance under Article 109f (6) of the Treaty
establishing the European Community (the “Treaty”) and Article 5.3 of the Statute of the

EMI (the “Statute”) on a draft law introducing a federal law which stipulates measures in

fiscal law accompanying the introduction of the euro and amending the 1998

“Einkommenssteuergesetz” (Income Tax Act) as well as the

“Zollrechtsdurchführungsgesetz” (Customs Act Implementation Act); Euro Fiscal

Accompaniment Act (the “Draft Law”)

CON/98/02

1.

On 15 January 1998 the EMI received a request from the Austrian Ministry of Finance for an

opinion on the Draft Law.

2.

The EMI’s competence to deliver an opinion is based on Article 1.1,  first indent, of the Council

Decision of 22 November 1993 (93/717/EC) on the consultation of the EMI by the authorities of

the Member States on draft legislative provisions.

3.

The  Draft  Law  contains  specific  provisions  for  the  transitional  period  from  1  January  1999  to

31  December  2001  concerning  the  effects  of  differences  in  exchange  rates  before  1  January

1999  on  accounting  techniques.  In  relation  to  profit  and  loss  accounts  after  the  start  of  Stage

Three, the Draft Law also prohibits the creation of reserves in connection with the introduction

of the euro. Furthermore, the Draft Law contains amendments to the Income Tax Act and the

Customs Act Implementation Act.

4.

As  regards  Section  II,  1.  to  3.  of  the  Draft  Law,  the  EMI  notes  that  the  replacement  of  the

wording “in schillings” in the existing Income Tax Act by “in domestic currency” is confusing as

the new wording might give the impression that the schillings will remain as a lawfull “domestic

currency” in Austria in Stage Three and will not become instead a denomination of the euro. The

same  holds  true  for  the  explanatory  notes  to  Section  II  when  describing  both  the  Austrian

schilling  and  the  euro  as  “domestic  currency  units”.  The  EMI  suggests  therefore  to  reconsider

the wording of these provisions in the Draft Law.

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5.

Section  III,  1  states  that  “insofar  as  customs  law  permits  rounding  in  the  conversion  of  a  sum

expressed  in  schillings  into  euro,  the  Federal  Minister  of  Finance  may  set  the  rounded

countervalue  by  decree”.  This  provision  represents  the  national  implementation  of  Article  1,

Section 4, of the Regulation (EC) No. 82/97 of the European Parliament and of the Council of

19 December 1996 amending Regulation (EEC) No. 2913/92 establishing a Community Customs

Code.  Article  1,  Section  4,  of  this  Regulation  states  that  Article  18,  paragraph  3,  of  the

Community  Customs  Code  is  amended  as  follows:  “The  customs  authorities  may  round  up  or

down the sums resulting from the conversion into their national currency of an amount expressed

in ECU for purposes other than determining the tariff classification of goods or import or export

duties.  The  rounded  amount  may  not  differ  from  the  original  amount  by  more  than  5%”.  The

explanatory notes to Section III of the Draft Law explain that this provision is compatible with

EU  legislation  and  refer  in  this  context  to  a  Statement  of  the  European  Commission  on  the

“Impact  of  the  Changeover  to  the  Euro  on  Community  Policy,  Institutions  and  Legislations”,

dated  5  November  1997  (COM  97/560  final).  Annex  8,  Section  B2,  second  paragraph  of  this

document refers to the amended Article 18 of the Community Customs Code and states that this

provision  will  still  be  applicable  from  1  January  1999  until  31  December  2001  for  participating

Member States because the reasoning behind this provision (namely to achieve rounded amounts

in the national currency) is still valid during the transitional period. In addition, Section C,  22., last

indent, and Annex 7, Section C, last paragraph support this interpretation. The EMI shares this

interpretation of the European Commission and is of the opinion that Section III, 1. of the Draft

Law is compatible with the Treaty and the Council Regulation and certain provisions relating to

the introduction of the euro (EC/11/03/97), which also deals with rounding.

6.

The  present  opinion  does  not  prejudge  reports  which  the  EMI  is  required  to  draw  up  under

Article 109j (1) of the Treaty and Article 7 of its Statute.

7.

The EMI agrees to this opinion being made public by the consulting authorities.

13 February 1998