1999/80/EC: Council Decision of 18 January 1999 authorising the Italian Republic to apply a measure derogating from Articles 2 and 10 of the Sixth Directive (77/388/EEC) on the harmonisation of the laws of the Member States relating to turnover taxes
Date: 1999-01-18
Institutions: Council of the European Union
Subjects: Italy, VAT, approximation of laws, derogation from EU law, tax harmonisation, waste

L 27/24

EN

Official Journal of the European Communities

2. 2. 1999

COUNCIL DECISION

of 18 January 1999

authorising the Italian Republic to apply a measure derogating from Articles 2
and 10 of the Sixth Directive (77/388/EEC) on the harmonisation of the laws of
the Member States relating to turnover taxes

(1999/80/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 for
assessment (1), and in particular Article 27(1) thereof,

Having regard to the proposal from the Commission,

to Article 27(1) of Directive 77/
Whereas, pursuant
388/EEC, the Council, acting unanimously on a proposal
from the Commission, may authorise any Member State
to introduce 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 and
avoidance;

Whereas, by letter to the Commission registered on 19
March 1998, the Italian Republic requested authorisation
to introduce a measure derogating from Articles 2 and 10
of Directive 77/388/EEC;

Whereas, in accordance with Article 27(3) of Directive
77/388/EEC, the other Member States were informed on
17 April 1998 of the request submitted by the Italian
Republic;

Whereas the third purpose of the measure is to apply
VAT suspension arrangements, with the right to deduct
input tax, to supplies of non-ferrous scrap, irrespective of
the turnover excluding tax of the firm making them;

Whereas this measure is likely to prove an effective
means of combating fraud which is becoming increas-
ingly prevalent in this area;

Whereas, consequently, the special measure satisfies the
conditions laid down in Article 27 of Directive 77/
388/EEC;

Whereas the Commission adopted on 10 July 1996 a
work programme and a timetable of proposals providing
for gradual, step-by-step progress towards a common VAT
system for the single market;

Whereas
authorisation should be granted until 31
December 2000 so that an assessment can then be made
the measure with the overall
of
approach adopted for the new common system of VAT;

the compatibility of

Whereas this derogation will have no impact on the Euro-
pean Communities’ own resources accruing from VAT,

HAS ADOPTED THIS DECISION:

Article 1

Whereas the first purpose of the special measure is to
exempt, without granting the right to deduct input tax,
supplies of scrap metal and other recyclable materials
made either by firms which have a fixed establishment
and generated a turnover excluding tax of not more than
ITL 2 billion during the previous year or by firms which
do not have a fixed establishment;

The Italian Republic is hereby authorised from 1 January
1999 until 31 December 2000 to apply a special measure
for the taxation of used and waste materials that contains
provisions derogating from Directive 77/388/EEC.

The provisions in question are laid down in Articles 2 and
3 below.

Whereas the second purpose of the measure is to grant
firms which have a fixed establishment and generated a
turnover excluding tax of between ITL 150 million and
ITL 2 billion during the previous year the right to opt for
the normal taxation arrangements;

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

Directive 96/95/EC (OJ L 338, 28. 12. 1996, p. 89).

Article 2

By way of derogation from Article 2(1) of Directive 77/
this
388/EEC, and without prejudice to Article 3 of
Decision, supplies of used and waste materials consisting
inter alia of paper, board, rags or glass shall be exempt
from VAT where they are made by firms which either:

2. 2. 1999

EN

Official Journal of the European Communities

L 27/25

— have a fixed establishment and generated a turnover
excluding tax of less than ITL 2 billion during the
previous year, or

— do not have a fixed establishment.

The firms referred to in the first indent which generated a
turnover excluding tax of more than ITL 150 million
during the previous year may be allowed not to apply the
special measure provided for in the preceding paragraph
in respect of the supplies concerned.

Article 3

By way of derogation from Article 10(2) of Directive
including
77/388/EEC, supplies of non-ferrous scrap,
scrap which has undergone rudimentary initial processing
reducing it to the primary state with the aid of minimal,
elementary technical facilities, shall be subject to VAT
suspension arrangements.

shall also apply to
These suspension arrangements
supplies of used and waste materials other than non-
ferrous metals made by taxable persons who deal in both
non-ferrous scrap and other recyclable materials, provided
that the transactions involving non-ferrous metals are not
of an incidental nature.

Article 4

This Decision is addressed to the Italian Republic.

Done at Brussels, 18 January 1999.

For the Council

The President

O. LAFONTAINE