1999/79/EC: Council Decision of 18 January 1999 amending Article 3 of Decision 98/198/EC
Date: 1999-01-18
Institutions: Council of the European Union
Subjects: United Kingdom, VAT, derogation from EU law, hire purchase, tax relief, vehicle rental

L 27/22

EN

Official Journal of the European Communities

2. 2. 1999

II

(Acts whose publication is not obligatory)

COUNCIL

COUNCIL DECISION

of 18 January 1999

amending Article 3 of Decision 98/198/EC

(1999/79/EC)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European
Community,

Having regard to the Sixth Council Directive (77/
388/EEC) of 17 May 1977 on the harmonisation of the
laws of the Member States relating to turnover taxes —
common system of value-added tax: uniform basis of
assessment (1), and in particular Article 27 thereof,

Having regard to Decisions 95/252/EC (2)
198/EC (3),

and 98/

Having regard to the proposal from the Commission,

Whereas, pursuant
to Article 27(1) of Directive 77/
388/EEC, the Council, acting unanimously on a proposal
from the Commission, may authorise any Member State
to introduce or extend special measures for derogation
from that directive in order to simplify the procedure for
charging the tax or to prevent certain types of tax evasion
or avoidance;

registered with the Commission’s
Whereas, by letter
Secretariat-General on 20 July 1998, the United Kingdom
Government requested authorisation to extend applica-
tion of the derogation previously granted to it by Decision
95/252/EC and Decision 98/198/EC;

Whereas the other Member States were informed on 22
September 1998 of the United Kingdom’s request;

(1) OJ L 145, 13. 6. 1977, p. 1. Directive as last amended by

Directive 98/80/EC (OJ L 281, 17. 10. 1998, p. 31).

(2) OJ L 159, 11. 7. 1995, p. 19.
(3) OJ L 76, 13. 3. 1998, p. 31.

Whereas the derogation in question is designed, firstly, to
restrict to 50 % the right of the hirer or leasee of a
passenger car to deduct the VAT on the hire or leasing
transaction where the car is used for private purposes and,
secondly, to waive the VAT payable on the private use of
the car in question;

Whereas the legal and factual circumstances which justi-
fied granting authorisation to apply a derogation have not
changed and still obtain;

Whereas on 17 June 1998 the Commission presented a
for a Council Directive amending the Sixth
proposal
Directive as regards the rules governing the right
to
deduct VAT (4);

Whereas the objective of that proposal is to bring about
an approximation of the limitations of the right to deduct
VAT in order to reduce the disparities between the rules
applicable in the Community, particularly where expend-
iture on passenger cars is concerned;

Whereas it is appropriate, therefore, to extend the period
of the authorisation granted until the entry into force of
the
the abovementioned Directive; whereas, however,
authorisation will expire on 31 December 2000 at the
latest if the Directive has not entered into force by that
date, enabling an assessment to be made at that time of
the expediency of the derogation in the light of the
discussions held within the Council on the proposal for a
Directive;

(4) OJ C 219, 15. 7. 1998, p. 16.

2. 2. 1999

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Official Journal of the European Communities

L 27/23

Whereas the derogation has no adverse impact on the
European Communities’ own resources accruing from
VAT,

subparagraph of Article 17(6) of Directive 77/
388/EEC, but on 31 December 2000 at the latest.'

Article 2

HAS ADOPTED THIS DECISION:

This Decision shall apply from 1 January 1999.

Article 1

Article 3 of Decision 98/198/EC shall be replaced by the
following:

‘Article 3

This authorisation shall expire on the date of the
entry into force of the Community rules determining
what expenditure is not to be eligible for the deduc-
tion of value-added tax, in accordance with the first

Article 3

This Decision is addressed to the United Kingdom.

Done at Brussels, 18 January 1999.

For the Council

The President

O. LAFONTAINE