Council Directive 1999/59/EC of 17 June 1999 amending Directive 77/388/EEC as regards the value added tax arrangements applicable to telecommunications services
Date: 1999-06-17
Institutions: Council of the European Union
Subjects: VAT, provision of services, telecommunications, transmission network

26. 6. 1999

EN

Official Journal of the European Communities

L 162/63

COUNCIL DIRECTIVE 1999/59/EC

of 17 June 1999

amending Directive 77/388/EEC as regards the value added tax arrangements
applicable to telecommunications services

THE COUNCIL OF THE EUROPEAN UNION,

(6)

Having regard to the Treaty establishing the European
Community, and in particular Article 93 thereof,

Having regard to the proposal from the Commission (1),

Having regard to the Opinion of the European Parlia-
ment (2),

Having regard to the Opinion of the Economic and Social
Committee (3),

(7)

Whereas:

Article 14 of the Treaty defines the internal market
as comprising an area without internal frontiers in
which the free movement of goods, persons,
services and capital is ensured in accordance with
the provisions of the Treaty;

(8)

(1)

(2)

(3)

(4)

(5)

the rules currently applicable to VAT on telecom-
munications services under Article 9 of 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 (4) are
inadequate for taxing all such services consumed
within the Community and for preventing distor-
tions of competition in this area;

in the interests of the proper functioning of the
internal market, such distortions should be elimi-
nated and new harmonised rules introduced for
this type of activity;

action should be taken to ensure, in particular, that
telecommunications services used by customers
established in the Community are taxed in the
Community;

to this end, telecommunications services supplied
to taxable persons established in the Community or
to recipients established in third countries should,
in principle, be taxed at the place of the recipient
of the services;

(1) OJ C 78, 12.3.1997, p. 22.
(2) Opinion delivered on 6 May 1999 (not yet published in the

Official Journal).

(3) OJ C 287, 22.9.1997, p. 28.
(4) OJ L 145, 13.6.1977, p. 1. Directive as last amended by

Directive 1999/49/EC (OJ L 139, 2.6.1999, p. 27).

services

in order to ensure uniform taxation of telecommu-
supplied by taxable persons
nications
established in third countries
to non-taxable
persons established in the Community which are
effectively used or enjoyed in the Community,
Member States should make use of the provisions
of Article 9(3)(b) of Directive 77/388/EEC on
changing the place of supply; whereas, however,
Article 9(3) of that Directive may remain applicable
where corresponding telecommunications services
are supplied to other recipients in the Community;

for the purpose of establishing a special rule for
determining the place of supply of telecommunica-
tions services, such services need to be defined;
such definition should draw on definitions already
adopted at international level, which include inter-
national
telephone call routing and termination
services and access to global information networks;

taxation at the place of the recipient of the services
also means that taxable persons will not have to
have recourse to the procedures under Directives
79/1072/EEC (5) and 86/560/EEC (6); the new rules
for determining the place of supply should not
mean that foreign taxable persons have to be iden-
tified for tax purposes in another State; this will be
achieved by making it compulsory for the recipient
of the services to be liable for the tax, provided that
recipient is a taxable person;

(9)

Directive 77/388/EEC should be amended accord-
ingly,

HAS ADOPTED THIS DIRECTIVE:

Article 1

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

1. At the end of Article 9(2)(e), the full stop shall be
replaced by a semicolon and the following new indent
shall be added:

(5) OJ L 331, 27.12.1979, p. 11. Directive as last amended by the

1994 Act of Accession.

(6) OJ L 326, 21.11.1986, p. 40.

L 162/64

EN

Official Journal of the European Communities

26. 6. 1999

‘ Telecommunications. Telecommunications

ser-
vices shall be deemed to be services relating to the
transmission, emission or
reception of signals,
writing, images and sounds or information of any
nature by wire, radio, optical or other electromag-
netic systems,
including the related transfer or
assignment of the right to use capacity for such
transmission, emission or reception. Telecommu-
nications services within the meaning of
this
provision shall also include provision of access to
global information networks.'

2. The following paragraph 4 shall be added after Article

9(3):

In the case of

telecommunications

‘4.
services
referred to in paragraph 2(e) supplied by a taxable
person established outside the Community to non-
taxable persons established inside the Community,
Member States shall make use of paragraph 3(b).'

3. Article 21(1)(b) shall be replaced by the following:

‘(b) taxable persons

to whom services covered by
Article 9(2)(e) are supplied or persons who are
identified for value added tax purposes within the
territory of the country to whom services covered
by Article 28b(C), (D), (E) and (F) are supplied, if
the services are carried out by a taxable person
established abroad; however, Member States may
require that the supplier of services shall be held
jointly and severally liable for payment of the tax;'

Article 2

1. Member States shall adopt the laws, regulations and
administrative provisions necessary to comply with this
Directive by 1 January 2000. They shall
inform the
Commission thereof.

When Member States adopt these measures, they shall
contain a reference to this Directive or shall be accompa-
nied by such reference at the time of their official publi-
cation. The methods of making such reference shall be
laid down by the Member States.

2. Member States shall communicate to the Commis-
sion the text of the provisions of domestic law which they
adopt in the field covered by this Directive.

Article 3

This Directive shall enter into force on the day of its
publication in the Official Journal of the European
Communities.

Article 4

This Directive is addressed to the Member States.

Done at Luxembourg, 17 June 1999.

For the Council

The President

F. MÜNTEFERING