WRITTEN QUESTION E-3157/00 by Gerhard Hager (NI) to the Commission. Taxation of online supplies.
Date: 2000-10-10
Institutions: European Parliament, Provisional data
Subjects: United States, economic region, electronic commerce, international cooperation, tax system

19.6.2001

EN

Official Journal of the European Communities

C 174 E/21

(b)

(c)

the design phase is based on a modified route and/or construction of a tunnel for the motorway so
that no further costs are incurred for a variant which runs counter to the interests of nature and the
environment,

the provision of European financial contributions for the building of the motorway, as intended by the
Bulgarian government under the ISPA, is made conditional on the natural features of the Kresna
gorges being retained and no ecological corridors being destroyed within that area?

Answer given by Mrs Wallstr(cid:246)m on behalf of the Commission

(22 December 2000)

The Commission is aware that the Bulgarian government intends to build a motorway through the
1.
valley of the Struma as part of Trans-European Corridor No 4. The Commission has approved the Phare
Cross-Border Co-operation (CBC) project E-79 motorway study (BG9803 and BG99404) including the
preparation of a preliminary design, feasibility study and detailed design of the Daskalovo-Kulata section.
The European Investment Bank has not been asked to finance the Struma motorway. To date no request
for additional Community assistance has been made. The Commission undertakes a thorough appraisal of
all projects submitted by the beneficiary countries for ISPA financial assistance to ensure compliance with
the requirements of the appropriate regulations. One of these requirements is for an assessment of
environmental impact of the project similar to the assessment under Council Directive 85/337/EEC of
27 June 1985 (1) amended by Council Directive 97/11/EEC of 3 March 1997 (2). It is within the context of
such an EIA procedure that the environmental sensitivity of areas affected by the construction, including
the Kresna gorge, should be considered.

2.
The Commission will closely follow, especially through its delegation in Sofia, the planning of the
Struma motorway, in order to ensure that the less damaging route for the environment is used, and that
an alternative solution to that presently planned is chosen, if necessary. The Commission will facilitate
meetings and dialogue between the Bulgarian authorities and the Bulgarian environmental non-govern-
mental organisations (NGOs). In this context, the Commission delegation in Sofia organised meetings with
the interested parties (i.e., the mayor of the town of Kresna, representatives of Bulgarian environmental
NGOs, the contractor, the CBC implementing agency and the Roads implementing agency) on 1 and
13 November 2000, during which possible alternative solutions for the location of the motorway were
discussed.

The Commission is well aware of the importance of the Kresna gorge from an environmental point
3.
of view. Different habitat types in the sense of Council Directive 92/43/EEC of 21 May 1992, on the
conservation of natural habitats and of wild fauna and flora (3) are present in the Kresna gorge, and plant,
fish, amphibian and reptilian species that fall within the annexes of the Directive live in the Kresna gorge
area. For these reasons, the Commission is undertaking the actions described at point 1 and 2 aiming to
preserve the status quo of this important bio-diversity area.

4. and 5.
network, the Commission would be ready to support such a choice.

Should Bulgaria decide to ask for the inclusion of the Kresna gorge area in the Natura 2000

(1) OJ L 175, 5.7.1985.
(2) OJ L 73, 14.3.1997.
(3) OJ L 206, 22.7.1992.

(2001/C 174 E/020)

WRITTEN QUESTION E-3157/00

by Gerhard Hager (NI) to the Commission

(10 October 2000)

Subject: Taxation of online supplies

In June 2000 the Commission submitted a proposal for a Council Directive amending Directive 77/388/
EEC (1) on the treatment for VAT purposes of certain electronically provided services, and a proposal for a
Council Regulation amending Council Regulation (EEC) 218/92 (2) on administrative cooperation in the
field of indirect taxation (VAT).

C 174 E/22

Official Journal of the European Communities

EN

19.6.2001

In the light of the problems linked to the online supply of digital products and their treatment for tax
purposes, I should like to ask the Commission the following:

1. Before submitting the above proposals, did the Commission study the taxation of online supplies in

regions with similar economies?

2. How is the taxation of this type of online supplies handled in the USA, for example?

3.

In what international context beyond the countries of the EU does cooperation take place on the
taxation of online supplies?

4.

Is there any international requirement regarding the taxation of online supplies?

(1) OJ L 145, 13.6.1977, p. 1.
(2) OJ L 24, 1.2.1992, p. 1.

Answer given by Mr Bolkestein on behalf of the Commission

(8 December 2000)

The Commission studied the issues surrounding electronic commerce taxation systems in considerable
depth before making a proposal. As well as working closely with Member States(cid:146) tax administrations and
with representatives of European business, the Commission played a central role in the work undertaken
within the Organisation for economic cooperation and development (OECD). This recognised the interna-
tional nature of the questions raised and the need to compare and exchange experiences in addressing a
new economic paradigm. The taxation guidelines put forward by the Commission to the Ecofin Council
in July 1998 reflected this, and these guidelines in turn formed the basis of a common Community
position at the OECD ministerial conference at Ottawa in October 1998. The international taxation
framework conditions established by the OECD at the Ottawa ministerial conference were subsequently
considered by the Commission in its working paper of June 1999, which set out various issues and
options for the consideration of those involved in electronic commerce and was the subject of extensive
consultation. Finally, the proposal from the Commission was issued in June 2000 (1), reflecting the
taxation framework conditions for electronic commerce established by OECD member
international
countries, and encompassing the extensive consultative process of the preceding years.

The taxation of online supplies in the United States is not directly comparable as there is no harmonised
national system of consumption taxation. Instead, most state governments impose retail sales taxes on the
purchase of goods, and in some cases services, by their residents. Although e-commerce is an impetus for
modernisation and reform of these systems, it is too early to say how online supplies will eventually be
handled.

The OECD has established a role as the primary forum for international co-operation in developing
policies on the taxation of on-line e-commerce. At present the Commission is participating there, together
with other Community administrations and representatives of, inter alia, the United States, Australia, Japan
and Canada on reaching international consensus on the measures needed to give effect to the taxation
framework condition agreed at Ottawa.

The OECD framework conditions agreed at the ministerial conference at Ottawa in October 1998 lay
down international taxation principles that should apply to electronic commerce. For consumption taxes
(such as VAT) taxation should result in the jurisdiction where consumption takes place and, for these
purposes, the supply of digitised products should not be treated as a supply of goods. The proposal from
the Commission will ensure that the Community VAT system is in conformity with these principles.

The World Trade Organisation (WTO) also has a number of rules regarding taxation measures that have an
impact on trade. The Commission(cid:146)s proposal is in line with these rules.

(1) COM(2000) 349 final.