WRITTEN QUESTION P-0964/01 by Michl Ebner (PPE-DE) to the Commission. Taxation of used cars purchased within the EU.
Date: 2001-03-20
Institutions: European Parliament, Provisional data
Subjects: VAT, intra-EU trade, used goods, vehicle

C 318 E/164

Official Journal of the European Communities

EN

13.11.2001

their environmental benefits. If enough customers are prepared to take this opportunity to use their
purchasing power then they will be able to make a real difference to the balance of sources of energy
supply in the Community.

(1) COM(2000) 769 final.
(2) OJ C 311 E, 31.10.2000.
(3) COM(2001) 226.

(2001/C 318 E/176)

WRITTEN QUESTION P-0964/01

by Michl Ebner (PPE-DE) to the Commission

(20 March 2001)

Subject: Taxation of used cars purchased within the EU

Article 36(10) of Decree Law No 41 of 23 February 1995 provides that in the context of intra-Community
trade, motor vehicles are considered to be used goods if deemed such by Article 38(4) of Decree Law
No 331 of 30 August 1993 (i.e. if they were registered more than six months previously and have been
driven more than 6 000 kilometres). Can the Commission therefore state whether such used cars are
subject to VAT on the profit margin, regardless of whether they were originally taxed in their EU country
of origin under the VAT margin scheme or the ordinary VAT scheme?

Answer given by Mr Bolkestein on behalf of the Commission

(10 May 2001)

The VAT arrangements applicable to used cars can be either the normal VAT arrangements or the special
arrangements applicable to second-hand goods, works of art, collectors(cid:146) items and antiques (the (cid:145)margin
scheme(cid:146)), as provided for in Article 26b of the 6th VAT Council Directive 77/388/EEC of 17 May 1977 on
the harmonisation of the laws of the Member States relating to turnover taxes (cid:129) Common system of value
added tax: uniform basis of assessment (1).

The margin scheme can be used by a taxable dealer in the following special circumstances:

(cid:129) Where the vehicle was supplied to him by a non-taxable person, or

(cid:129) Where the vehicle was supplied to him by a taxable person whose supplies are exempt from VAT

because he engages in an exempt activity, or

(cid:129) Where the vehicle was supplied to him by a taxable person whose supplies are exempt from VAT in

accordance with the special scheme for small undertakings, or

(cid:129) Where the vehicle was supplied by another taxable person applying the margin scheme in respect of

that vehicle.

If the margin scheme is applied, the amount on which VAT is charged is the profit margin made on the
deal, less the amount of VAT relating to the profit margin.

In each of the circumstances outlined above, the taxable dealer would, in the absence of the margin
scheme, not be able to deduct any VAT on the vehicle being sold by him, and he would be obliged to
charge VAT on the full consideration he would be entitled to receive from the customer less the amount of
VAT relating to the consideration.

However, even where the vehicle to be sold by a taxable dealer qualifies for the margin scheme to be
applied to it, he may always opt to apply the normal VAT rules.

If the conditions for applying the margin scheme are not met, it is the normal VAT arrangements which
apply to supplies of used cars.

The taxable dealer who supplies a used car must therefore decide on a case-by-case basis whether it is the
normal VAT rules that apply or whether the margin scheme could apply.

13.11.2001

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Official Journal of the European Communities

C 318 E/165

The Commission can therefore advise the Honourable Member that it is not true to state that all used
motor vehicles sold in the Community which have been in service for more than six months and have
travelled more than 6000 kilometres are subject to VAT on the profit margin.

(1) OJ L 145, 13.6.1977, Directive as last amended by Council Directive 2001/41/EC of 19 January 2001 (OJ L 22,

24.1.2001).

(2001/C 318 E/177)

WRITTEN QUESTION E-0969/01

by Glenys Kinnock (PSE) to the Commission

(30 March 2001)

Subject: Haiti

Would the Commission outline the procedures that were followed before the imposition of EU sanctions
against Haiti?

How has the Commission responded to the ACP(cid:146)s reaction to the measures taken with regard to Haiti?

Would the Commission agree that election procedures should not constitute the basis for a decision to
withdraw development assistance?

Answer given by Mr Nielson on behalf of the Commission

(1 June 2001)

Following the 21st May 2000 legislative elections and the subsequent report of
the international
observation mission (OAS) judging them flawed, the Union invited Haiti to consultations which were
opened on 26 September. The Union considered that one of the essential elements of the article 9 of the
Cotonou Agreement (respect for human rights, democratic principles and the rule of law) had been
violated.

The procedures followed were in full respect of the provisions of article 96. In the consultation meeting the
Union expressed its concern at the situation and this was followed by a declaration of the Haitian minister
of foreign affairs that did not address the Union concerns. Provisional conclusions were issued where the
Union acknowledged the Haitian position but regretted the (cid:145)non taking into account(cid:146) of its remarks and
preoccupation. The Union clearly stated that the essential elements of article 9 of the Cotonou agreement
were not fulfilled. Haiti was expected to react and to bring new elements before the expiry of the two
months period provided for article 96 consultations.

In the course of October and November 2000 and before the presidential elections, several (cid:145)dØmarches(cid:146)
were conducted to the Haitian authorities to draw their attention to the possible consequences of their
attitude. The Haitian authorities took no corrective measures.

At the end of the period and after the presidential elections of November 2000 (which were boycotted by
the opposition parties and held in the absence of international observers because they were considered as
not complying with democratic rules), the closure procedure was initiated that led to the adoption of the
appropriate measures by the Council. Article 96 consultations aim at examining the situation in view to
find a solution acceptable to both parties. But it clearly foresees that if no solution has been found
appropriate measures can be taken.

The Commission did not react officially to the African, Caribbean and Pacific States(cid:146) (ACP) secretariat press
release. The Union undertook an explanation process through its Head of Mission in Haiti to explain its
political position as well as the measures taken in terms of reorientation of the co-operation programmes.

Co-operation with Haiti continues; assistance is not
(cid:145)withdrawn(cid:146). The measures taken are to avoid
penalising Haitian people; direct budget aid to the government has been suspended and existing funds
(€ 52 million) reoriented to projects of direct benefit to the population in the social sectors.