Proposal for a Council Decision authorising Germany to apply a measure derogating from Article 21 of Directive 77/388/EEC on the harmonisation of the laws of the Member States relating to turnover taxes
Date: 2002-03-08
Institutions: European Commission
Subjects: Germany, VAT, approximation of laws, derogation from EU law

C 151 E/264

EN

Official Journal of the European Communities

25.6.2002

Proposal for a Council Decision authorising Germany to apply a measure derogating from Article
21 of Directive 77/388/EEC on the harmonisation of the laws of the Member States relating to
turnover taxes

(2002/C 151 E/17)

COM(2002) 121 final

(Submitted by the Commission on 8 March 2002)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European
Community,

(5) This derogation is intended to simplify the collection of the
tax since, in practice, the person normally liable for the tax
is,
in the instances for which the derogation is sought,
generally prevented by financial difficulties from paying
the VAT invoiced.

Having regard to the Sixth Council Directive (77/388/EEC) of
17 May 1977 on the harmonisation of the laws of the Member
States
taxes — common system of
value-added tax: uniform basis of assessment, and in particular
Article 27(1) thereof (1),

relating to turnover

(6) This state of affairs adversely affects public finances in that
the recipient of the goods can deduct the value added tax
invoiced to him, even though it has not been paid by the
taxable person who supplied the goods.

Having regard to the proposal from the Commission,

Whereas:

(7) By designating the recipient of the goods as the person
the derogation removes
liable for the value added tax,
the difficulties encountered without affecting the amount
of tax due.

(1) In a request submitted in the form of two letters addressed
to the Commission, registered by the Commission's Secre-
tariat-General on 9 January 2002, Germany sought auth-
orisation to apply a measure derogating from Article
21(1)(a) of Directive 77/388/EEC.

(2) The other Member States were informed of Germany's

request by letter of 16 January 2002.

(3) Article 21(1) of Directive 77/388/EEC, as amended by
Article 28g thereof, stipulates that, under the internal
system,
the taxable person supplying taxable goods or
services is normally liable to pay value added tax.

(4) The purpose of the derogation requested by Germany is to
make the recipient liable for the value added tax due on the
supply, outside a judicial
liquidation procedure, of goods
provided as security by one VAT taxable person to another
in execution of that security and the supply of building
plots sold at public auction to another VAT taxable
the
person in the course of
enterprise that owned the plots sold.

liquidation of

the judicial

(8) The authorisation should be granted until 31 December
2006, which will enable the derogation to be reviewed in
the light of experience.

(9) This derogation does not adversely affect the Communities'

own resources from VAT,

HAS ADOPTED THIS DECISION:

Article 1

By derogation from Article 21(1)(a) of Directive 77/388/EEC,
as amended by Article 28g thereof, Germany is hereby auth-
the supplies of goods
orised to designate the recipient of
referred to in Article 2 of this Decision as the person liable
to pay value added tax.

Article 2

(1) OJ L 145, 13.6.1977, p. 1. Directive last amended by Directive

2001/115/EC (OJ L 15, 17.1.2002, p. 24).

The recipient of the supply of goods may be designated as the
person liable to pay VAT in the following instances:

25.6.2002

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Official Journal of the European Communities

C 151 E/265

1. The supply, outside a judicial

liquidation procedure, of
goods provided as security by one VAT taxable person to
another in execution of that security;

Article 3

This Decision shall expire on 31 December 2006.

2. The supply of building plots sold at public auction to
another VAT taxable person in the course of the judicial
liquidation of the enterprise that owned the plots sold.

Article 4

This Decision is addressed to Germany.