WRITTEN QUESTION E-1285/01 by Theresa Villiers (PPE-DE) to the Commission. VAT.
Date: 2001-05-03
Institutions: European Parliament, Provisional data
Subjects: VAT, fiscal policy, tax harmonisation

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Answer given by Mrs Schreyer on behalf of the Commission

(31 July 2001)

Following the discussions which took place within the framework of Agenda 2000, the Council adopted
on 29 September 2000 a new decision concerning the system of the own resources of the Communities
(2000/597/EC, Euratom). This decision will enter into force as soon as the ratification procedures by the
national parliaments are completed.

This decision stipulates (Article 9) that the Commission will undertake, before 1 January 2006, a general
review of the own resources system accompanied, if necessary, by appropriate proposals, in the light of all
relevant factors. Among these factors is mentioned the possibility of modifying the structure of the own
resources by creating new autonomous own resources. In a statement attached to the decision, and at the
request of the Parliament, the Commission committed itself to presenting the results of this review before
the end of 2004.

An objective could be to replace the existing financing system of the European Union(cid:146)s budget with one or
more European taxes without imposing an additional financial burden upon European citizens. The
Commission therefore welcomes all suggestions put forward by the Member States, which could encourage
the debate on these questions, such as the remarks made recently by the Prime Minister of Belgium with
regard to the European Council
in Laeken to which the Honourable Member refers. The Parliament
expressed a similar view in its resolution of 5 July 2001 on the situation of own resources in the European
Union in 2001.

The Commission has not formally made any specific proposals at this stage. Exchanges of views and of
information could take place on this subject within the framework of the usual contacts between the
Commission and the authorities of the Member State that holds the Presidency of the Council of the
Union.

(2001/C 364 E/081)

WRITTEN QUESTION E-1285/01

by Theresa Villiers (PPE-DE) to the Commission

(3 May 2001)

Subject: VAT

Could the Commission confirm that it continues to hold the definitive country of origin VAT system

1.
as its long-term goal? Does the Commission believe that greater VAT harmonisation is desirable?

2.
Could the Commission confirm that the UK(cid:146)s zero rating system, currently used for children(cid:146)s clothes
and newspapers, is still regarded as a (cid:145)transitional measure pending the adoption of the common VAT
system(cid:146), as expressed by Commissioner Bolkestein in his response to Parliamentary Question E-1635/00 (1)
of 5 July 2000?

Could the Commission confirm that accession countries are expected to introduce full VAT rates on

3.
items such as children(cid:146)s clothes, shoes and nappies on joining the European Union?

Could the Commission explain the work currently being undertaken in the field of VAT, and does it

4.
include a new work programme?

If so, what are the Commission(cid:146)s priorities under the new work programme, and has the programme

5.
been discussed by the Member States?

Has the Commission made any progress on any of

6.
COM(2000) 348:

the potential

future priorities set out

in

(cid:129) Treatment of subsidies, public authorities and services in the public interest,

(cid:129) Treatment of financial and insurance services,

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(cid:129) Court judgements,

(cid:129) Rules on supplies of goods,

(cid:129) Closer administrative cooperation,

(cid:129) Coordination of customs and taxation,

(cid:129) Review of the place of taxation of services in general (Article 9),

(cid:129) Rationalisation of derogations under Article 27,

(cid:129) Rationalisation of options, rights and derogations,

(cid:129) Rationalisation of VAT rates,

(cid:129) The scheme applying to small businesses?

(1) OJ C 72 E, 6.3.2001, p. 92.

Answer given by Mr Bolkestein on behalf of the Commission

(4 July 2001)

1.
As stated in its Communication to the Council and the Parliament of 7 June 2000 on the New VAT
Strategy (1), the Commission considers that the Internal Market would function better with a VAT system
based on taxation in the Member State of origin rather than with the transitional system in force at the
moment. Therefore, the Commission has not questioned the definitive system as a long-term Community
there are a number of areas in the existing VAT
goal. However,
arrangements where further harmonisation is necessary in the short term in order to improve the
functioning of the Internal Market.

the Commission considers that

The answer given to Written Question E-1635/00 by the Honourable Member on the British(cid:146)s zero

2.
rating system used for children(cid:146)s clothing and newspapers is still valid.

3.
The Commission can confirm that the accession countries when joining the Union are expected to
introduce the standard VAT rate on items such as children(cid:146)s clothes, shoes and nappies. However, for the
moment one candidate country has requested a transitional period on such items, which is currently being
negotiated in the Council.

A detailed explanation of the work currently being undertaken in the field of VAT is set out in the
4.
above mentioned Communication. Under this new strategy two directives have been adopted by the
Council (Council Directive 2000/65/EC of 17 October 2000 amending the sixth VAT 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 (2), as regards the determination of the
person liable for payment of value added tax (3) and Council Directive 2001/41/EC of 19 January 2001
amending the sixth VAT Directive (77/388/EEC) with regard to the length of time during which the
minimum standard rate is to be applied (4)). In addition, a political agreement has been reached on the
proposal for improving mutual assistance on recovery and work is currently continuing on several other
proposals in the Council.

5. and 6.
In March 2001, the Commission presented to the Member States, in the Tax Policy Group, an
evaluation of the progress concerning the new strategy and identified new priorities for 2001. In this
context the Commission plans to present new proposals involving the recasting of the sixth VAT Directive,
the place of supply of goods and the special arrangements for travel agents. In addition, in order to be able
to put forward further formal proposals in 2002/2003, the Commission is also planning to initiate
preliminary work on other subjects such as the treatment of subsidies, activities of public authorities and
services in the general
the co-ordination of customs and taxation rules; rationalisation of
derogations under Article 27 of the 6th Directive, follow-up to Simpler legislation for the internal market

interest;

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(SLIM) and a revision of provisions on the place of taxation of services. Nevertheless, the presentation of
further new proposals by the Commission will largely depend on the progress made by the Council in
adopting the proposals already tabled.

(1) COM(2000) 348 Final.
(2) OJ L 145, 13.6.1977.
(3) OJ L 269, 21.10.2000.
(4) OJ L 22, 24.1.2001.

(2001/C 364 E/082)

WRITTEN QUESTION E-1286/01

by Theresa Villiers (PPE-DE) to the Commission

(3 May 2001)

Subject: Vehicle tax

In his speech (cid:145)Taxation and competition: the realisation of the internal market(cid:146) in Hoevelaken on 17 March
2000, Commissioner Bolkestein highlighted the issue of vehicle taxation, commenting:

Turning to the field of excises, you have, for example, the problem with registration taxes for cars. If
you buy a new car here in the Netherlands, you will pay a registration tax. But then if you move to
live and work in another Member State and apply for number plates, in 11 Member States you are
going to be asked to pay another registration tax. And there is no system of refunds or relief!

Could the Commission state if it has any plans to harmonise (cid:145)registration tax(cid:146) or if it has any other plans to
coordinate vehicle taxation?

Answer given by Mr Bolkestein on behalf of the Commission

(3 July 2001)

As the Honourable Member is certainly aware the Commission presented a Proposal for a Council
Directive (1) in 1998, which has as an overall objective the bringing of the tax treatment of vehicles, which
accompany private individuals moving from one Member State to another, more into line with the concept
and principles of the Single Market. Situations like double payment of registration tax or payment of
excessive amounts of vehicle taxes, which have been the subject of repeated complaints by citizens or of
judgements by the Court of Justice, have also been addressed in this proposal. Member States discussed this
proposal only once,
in February 1999, and since then it has remained on the Council(cid:146)s table. The
Parliament gave its favourable opinion on this proposal in June 1999.

The Commission intends to present a Communication on vehicle taxation before the end of this year or
early in 2002, in order to launch a discussion with Member States, Community Institutions and other
stakeholders on future options for action at Community and national levels. Issues such as double payment
or non-refund of registration tax paid, in particular when private motor vehicles are moved permanently to
another Member State, will, inter alia, be dealt with in this Communication.

The Commission will wait until the outcome of this discussion is known, before taking any initiative in
this area.

In the meantime, the Commission has, in application of Article 1 of Council Directive 83/183/EEC (2),
insisted on the distinction between consumption taxes on one hand and duties paid during registration and
periodical taxes linked to use of the vehicle in the interior of a Member State on the other. The
Commission is of the view that only periodical taxes linked to the use of a vehicle in the interior of
a Member State and duties paid during the registration (registration fees), fall under Article 1 paragraph 2
of Council Directive 88/183/EEC. The registration fees have to be limited to the approximate costs of the
services offered by the authorities in charge of registration. All other taxes charged by certain Member
States because of the registration of a car, independently of their denomination, are considered by the