WRITTEN QUESTION P-0162/00 by Françoise Grossetête (PPE-DE) to the Commission. Common VAT system ‐ Deductions.
Date: 2000-01-26
Institutions: European Parliament, Provisional data
Subjects: EU law, VAT rate, interpretation of the law

C 280 E/190

Official Journal of the European Communities

EN

3.10.2000

How does the Commission plan to proceed with this study? Will it ask an external body to carry out the
study? If not, which service or directorate-general will be responsible for the study? Will the Commission
involve the European Parliament? If so, in what way, and which bodies or committees will it contract?
How will the Commission coordinate this study and its recommendations with the work done by
Commissioner Kinnock on a Communication on Strategic Reform?

What is the timetable for the study?

Answer given by Mrs Reding on behalf of the Commission

(23 February 2000)

The Commission has taken note of the conclusions regarding information policy as agreed at the European
Council meeting in Helsinki of 10-11 December 1999 and has started its preparations for a communica-
tion on the (cid:145)Dialogue with Citizens(cid:146). The new strategy will be based on partnerships with Member States
and the civil society and make use of appropriate decentralized networks in the Member States. The
Parliament will be fully associated in the process.

The new communication strategy which will be developed in the perspective of the broader reform of the
Commission will be presented in the near future.

(2000/C 280 E/221)

WRITTEN QUESTION P-0162/00

by Fran(cid:231)oise GrossetŒte (PPE-DE) to the Commission

Subject: Common VAT system (cid:129) Deductions

(26 January 2000)

Articles 17-19 of Directive 77/388/EEC (1) constitute a major source of controversy and interpretational
problems for businessmen.

Does the Commission agree with the interpretations put forward in respect of the following issues:

(cid:129) Article 17 of Directive 77/388/EEC would never authorise the deduction of VAT charged on

expenditure incurred with a view to the acquisition of shares in another company;

(cid:129) when a taxable person(cid:146)s business activities involve simultaneously activities which are exempt from
taxation and activities which are subject to taxation, the structure of Directive 77/388/EEC is such
that, as regards the calculation of the proportion which is VAT deductible, the criterion of actual
assignment must be applied rather than a general proportion for deduction calculated;

(cid:129) while, pursuant to Article 17(6) of Directive 77/388/EEC, deduction of VAT on the purchase of cars is
restricted, even where such vehicles are used exclusively for a business activity subject to taxation,
delivery or subsequent hire to which VAT is applied by the taxable person must take account of the
VAT not deducted at the previous stage;

(cid:129) Directive 77/388/EEC provides for a common system for deliveries of goods or provision of services
for the taxable person(cid:146)s own use, but the Member States may derogate from that common system in
application of Article 17(6) of the Directive;

(cid:129) the deduction of VAT provided for in Article 17 of Directive 77/388/EEC may be subject to an act of
the tax authorities subsequent to the time when the right of deduct arose, determining the amount of
the VAT due and authorising reimbursement of the tax paid;

(cid:129) where a retailer decides to embellish the pavement area outside his shop by installing a bench and
plant containers with a view to attracting customers, the VAT payable on the cost of such embellish-
ment of the pavement area is deductible, even though the work involved does not exclusively benefit
his customers;

3.10.2000

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Official Journal of the European Communities

C 280 E/191

(cid:129) a Member State may not extend the period for monitoring the correct collection of the tax to 8 years
from the date on which VAT became chargeable while simultaneously restricting the right to VAT
deduction claimed by the tax authorities following such monitoring to no more than 5 or 3 years
from the date on which VAT became chargeable.

(1) OJ L 145, 13.6.1977, p. 1.

Answer given by Mr Bolkestein on behalf of the Commission

(17 February 2000)

As the Commission informed the Honourable Member in its answer to Written Questions P-2500/99 and
P-2751/99 (1), the issue it raises concerns a number of very specific and complex cases of interpretation of
Community VAT legislation. A detailed analysis of Articles 17 to 19 of the Sixth VAT Directive (2) is
therefore required to decide what tax treatment to apply.

A detailed case-by-case examination will have to be made given the size and specific nature of the request
which covers a vast list of transactions and practical cases.

The Commission would point out to the Honourable Member(cid:146)s that such a detailed reply will require
lengthy and painstaking research that it is unable to undertake at present and which goes far beyond the
scope of an answer to a written question.

(1) OJ C 225 E, 8.8.2000, p. 152.
(2) OJ L 145, 13.6.1977.

(2000/C 280 E/222)

WRITTEN QUESTION E-0166/00

by Rosa D(cid:237)ez GonzÆlez (PSE), Fernando PØrez Royo (PSE)
and Luis Berenguer Fuster (PSE) to the Commission

(31 January 2000)

Subject: Effects of state aid on the Spanish electricity sector

Given the enviable economic and financial situation of Spanish electricity companies receiving competition
transition costs (CTC), what measures will the Commission take to link the payment of eligible CTC to the
financial and economic viability of companies? Does it plan to assess the impact of and need for CTC at
the level of consolidated companies or by individual assets?

Answer given by Mr Monti on behalf of the Commission

(9 March 2000)

The Commission takes the view that, to rank as a stranded cost, a given investment or contract must
become uneconomic as a result of the liberalisation of the electricity market provided for in Parliament
and Council Directive 96/92/EC of 19 December 1996 concerning common rules for the internal market
in electricity (1) and must significantly affect the competitiveness of the company concerned. The Com-
mission analyses stranded costs on an asset-by-asset basis before determining their impact on the
competitiveness of consolidated companies.

(1) OJ L 27, 30.1.1997.