WRITTEN QUESTION E-2868/01 by Florence Kuntz (EDD) to the Council. Imposition of VAT on service charges.
Date: 2001-10-19
Institutions: European Parliament, Provisional data
Subjects: France, VAT, catering industry, derogation from EU law, hairdressing and beauty care, tax harmonisation

20.6.2002

EN

Official Journal of the European Communities

C 147 E/59

Moreover, it has been decided to organise a workshop mid December under the Belgian Presidency; the
latter will be entrusted with setting up a short, medium and long term working programme.

With regard to specific measures in the vicinity of the European Parliament’s premises, the Honourable
Member is advised to refer to the Administration of that institution.

(1) Parliament and Council Decision No 2119/98/EC, OJ L 268, 3.10.1998, Commission Decision 2000/57/EC, OJ L 21,

26.1.2000 and Commission Decision 2000/96/EC, OJ L 28, 3.2.2000.

(2002/C 147 E/058)

WRITTEN QUESTION E-2860/01

by Paolo Bartolozzi (PPE-DE) to the Council

(19 October 2001)

Subject: Measures aimed at tackling the crisis in tourism following the terrorist attacks in the United States

A worldwide crisis is affecting international and European tourism following the terrorist attacks on New
York and Washington, not least because ordinary travellers understandably feel insecure.

is seriously jeopardising firms in the European tourist industry (losses are
This reluctance to travel
estimated at Lit 25 billion per day in Italy, for example), which are only to a small extent absorbed by the
inadequate social provisions and flexible in the sector (particularly in the hotel sector).

Requests for urgent measures are being submitted by operators in the sector. These would include tax
concessions for employees and firms,
temporarily extending to travel agencies and tour operators
instruments for compensation in the form of social and transport arrangements and the introduction and/
or extension of organisational flexibility in the use of staff.

In view of Article 202 et seq. of the Treaty establishing the European Community, what rules does the
Council intend to introduce to revive tourism and the related market?

Reply

(1 March 2002)

The Honourable Member’s attention is drawn to the declaration by the Heads of State or Government of
the European Union and the President of the European Commission (Ghent, 19 October 2001) on the
review of the economic situation in the aftermath of the September 11 events.

As regards the specific problems of the tourism sector in this context, at its meeting on 27 September
2001 the Council asked the Commission to submit an information note on the repercussions of the events
of 11 September in the United States on the tourist industry in the Community and returned to the subject
at its meeting on 26 November 2001, when the Commission submitted an information note on the effects
of the terrorist atrocities of 11 September 2001 on the tourism sector in the European Union. The Council
agreed to return to the subject at a future meeting.

(2002/C 147 E/059)

WRITTEN QUESTION E-2868/01

by Florence Kuntz (EDD) to the Council

(19 October 2001)

Subject: Imposition of VAT on service charges

On 1 October 2001 the imposition of VAT on service charges levied on behalf of staff in eat-in catering
establishments and hairdressing salons became compulsory in France.

C 147 E/60

Official Journal of the European Communities

EN

20.6.2002

Until this year, however, France had been exempt from imposing VAT on such charges in accordance with
Council Decision 89/487/EEC (1) of 28 July 1989, authorising the French Republic to apply a measure
derogating from the second subparagraph of Article 17(6) of the Sixth Directive 77/388/EEC (2) on the
harmonisation of the laws of the Member States relating to turnover taxes.

A judgment delivered by the Court of Justice on 29 March 2001 put an end to this exemption. Why did
the Council not intervene to extend a derogation which only the Court and the Commission found
problematic? And, above all, why is VAT being imposed on service charges now, when the euro is about
to be introduced? Prices are already rising in the run-up to the arrival of this new currency, owing to the
conversion rate (6,55957 francs to the euro) and the tricky rounding operations to be carried out. Can the
Council explain why it is refusing to take action as regards this ridiculous timing, thus allowing the risk of
recession to grow by discouraging private consumption, an engine of growth?

(1) OJ L 239, 16.8.1989, p. 21.
(2) OJ L 145, 13.6.1977, p. 1.

Reply

(18 March 2002)

The exemption granted to France under Council Decision 89/487/EEC of 28 July 1989, which is referred
to in the Honourable Member’s question and which was declared invalid by a judgment of the Court of
Justice of 19 September 2000 (joined cases C-177/99 and C-181/99), does not concern service charges,
but the right to deduct VAT.

In its judgment of 29 March 2001 (1), to which the Honourable Member refers, the Court declared that, by
authorising, under certain conditions, the exclusion from the taxable amount for the purposes of value
added tax of the ‘service charges’ claimed by certain taxable persons, the French Republic has failed to fulfil
its obligations under the Sixth VAT Directive.

Lastly, it should be pointed out that, under the system laid down in the Treaty, the Council acts on a
proposal from the Commission.

(1) Case C-404/99.

(2002/C 147 E/060)

WRITTEN QUESTION E-2871/01

by Jorge Hernández Mollar (PPE-DE) to the Commission

(17 October 2001)

Subject: European Union cooperation in the construction of the Malaga Trade Fair Centre

The most pessimistic forecasts regarding the contribution from European funds for work on the Trade Fair
and Exhibition Centre in Malaga (Spain) have been proved correct.

The European Union has rejected Malaga Town Council’s application for 2,5 billion pesetas for this major
project through the Interreg III Spain-Morocco Community programme.

Given that construction of this centre is vital for the development of Community activities with North
Africa, particularly Morocco, what other possibilities would the Commission recommend might be
considered by the Malaga authorities with a view to securing the above funding for a project which will
open African doors to all the European Union countries?