Council Directive 2002/38/EC of 7 May 2002 amending and amending temporarily Directive 77/388/EEC as regards the value added tax arrangements applicable to radio and television broadcasting services and certain electronically supplied services
Date: 2002-05-07
Institutions: Council of the European Union
Subjects: VAT, broadcasting, electronic commerce, provision of services, tax exemption, television

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Official Journal of the European Communities

L 128/41

COUNCIL DIRECTIVE 2002/38/EC

of 7 May 2002

amending and amending temporarily Directive 77/388/EEC as regards the value added tax arrange-
ments applicable to radio and television broadcasting services and certain electronically supplied
services

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European
Community, and in particular Article 93 thereof,

Having regard to the proposal from the Commission (1),

should be established. In applying this scheme any oper-
ator supplying such services by electronic means to
non-taxable persons within the Community, may, if he
is not otherwise identified for tax purposes within the
Community, opt for identification in a single Member
State.

Having regard to the opinion of the European Parliament (2),

(6)

Having regard to the opinion of the Economic and Social
Committee (3),

The non-established operator wishing to benefit from
the special scheme should comply with the requirements
laid down therein, and with any relevant existing provi-
sion in the Member State where the services are
consumed.

Whereas:

(1)

(2)

(3)

(4)

(5)

The rules currently applicable to VAT on radio and
television broadcasting services and on electronically
supplied services, under Article 9 of the sixth Council
Directive 77/388/EEC of 17 May 1977 on the harmoni-
sation of the laws of the Member States relating to
turnover taxes — Common system of value added tax:
uniform basis of assessment (4), are inadequate for taxing
such services consumed within the Community and for
preventing distortions of competition in this area.

In the interests of the proper functioning of the internal
market, such distortions should be eliminated and new
harmonised rules introduced for this type of activity.
Action should be taken to ensure,
in particular, that
such services where effected for consideration and
consumed by customers established in the Community
taxed if
are taxed in the Community and are not
consumed outside the Community.

To this end, radio and television broadcasting services
and electronically supplied services provided from third
countries to persons established in the Community or
from the Community to recipients established in third
countries should be taxed at the place of the recipient of
the services.

To define electronically supplied services, examples of
such services should be included in an annex to the
Directive.

To facilitate compliance with fiscal obligations by opera-
tors providing electronically supplied services, who are
neither established nor required to be identified for tax
scheme
purposes within the Community, a special

(7)

The Member State of identification must under certain
conditions be able to exclude a non-established operator
from the special scheme.

(8) Where the non-established operator opts for the special
scheme, any input value added tax that he has paid with
to goods and services used by him for the
respect
purpose of his taxed activities falling under the special
scheme, should be refunded by the Member State where
the input value added tax was paid, in accordance with
the arrangements of
the thirteenth Council Directive
86/560/EEC of 17 November 1986 on the harmonisa-
tion of the laws of the Member States relating to turn-
over taxes — arrangements for the refund of value
added tax to taxable persons not
established in
Community territory (5). The optional restrictions for
refund in Article 2(2) and (3) and Article 4(2) of the
same Directive should not be applied.

(9)

(10)

Subject to conditions which they lay down, Member
States should allow certain statements and returns to be
made by electronic means, and may also require that
electronic means are used.

Those provisions pertaining to the introduction of elec-
tronic tax returns and statements should be adopted on
a permanent basis.
It is desirable to adopt all other
provisions for a temporary period of three years which
may be extended for practical reasons but should, in any
event, based on experience, be reviewed within three
years from 1 July 2003.

(1) OJ C 337 E, 28.11.2000, p. 65.
(2) OJ C 232, 17.8.2001, p. 202.
(3) OJ C 116, 20.4.2001, p. 59.
(4) OL L 145, 13.6.1977, p. 1. Directive as last amended by Council

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

(11) Directive 77/388/EEC should therefore be amended

accordingly,

(5) OJ L 326, 21.11.1986, p. 40.

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HAS ADOPTED THIS DIRECTIVE:

‘Article 26c

Article 1

A . D e f i n i t i o n s

Special scheme for non-established taxable persons
supplying electronic services to non-taxable persons

Directive 77/388/EEC is hereby temporarily amended as
follows:

1.

in Article 9:

(a) in paragraph (2)(e), a comma shall replace the final full

stop and the following indents shall be added:

‘— radio and television broadcasting services,

— electronically supplied services,

inter alia,

those

described in Annex L.’

(b) in paragraph 2, the following point shall be added:

‘(f) the place where services referred to in the last indent
of subparagraph (e) are supplied when performed
for non-taxable persons who are established, have
their permanent address or usually reside in a
Member State, by a taxable person who has estab-
lished his business or has a fixed establishment from
which the service is supplied outside the Community
or, in the absence of such a place of business or
fixed establishment, has his permanent address or
usually resides outside the Community, shall be the
place where the non-taxable person is established,
has his permanent address or usually resides.’

(c) in paragraph 3,

the introductory phrase shall be

replaced by the following:

In order to avoid double taxation, non-taxation or
‘3.
the distortion of competition, the Member States may,
with regard to the supply of services referred to in
paragraph 2(e), except for the services referred to in the
last indent when supplied to non-taxable persons, and
also with regard to the hiring out of forms of transport
consider:’

(d) paragraph 4 shall be amended as follows:

‘4.
In the case of telecommunications services and
radio and television broadcasting services referred to in
paragraph 2(e) when performed for non-taxable persons
who are established, have their permanent address or
usually reside in a Member State, by a taxable person
who has established his business or has a fixed establish-
ment from which the service is supplied outside the
Community, or in the absence of such a place of busi-
ness or fixed establishment, has his permanent address
or usually resides outside the Community, Member
States shall make use of paragraph 3(b).’

2.

in Article 12(3)(a), the following fourth subparagraph shall
be added:

‘The third subparagraph shall not apply to the services
referred to in the last indent of Article 9(2)(e).’

3. the following Article shall be added:

For the purposes of this Article, the following defini-
tions shall apply without prejudice to other Community
provisions:

(a) “non-established taxable person” means a taxable person
who has neither established his business nor has a fixed
establishment within the territory of the Community
and who is not otherwise required to be identified for
tax purposes under Article 22;

(b) “electronic

services”

supplied
services” means those services referred to in the last
indent of Article 9(2)(e);

“electronically

and

(c) “Member State of

identification” means the Member
State which the non-established taxable person chooses
to contact to state when his activity as a taxable person
within the territory of the Community commences in
accordance with the provisions of this Article;

(d) “Member State of consumption” means the Member
State in which the supply of the electronic services is
deemed to take place according to Article 9(2)(f);

(e) “value added tax return” means the statement containing
the information necessary to establish the amount of tax
that has become chargeable in each Member State.

B . S p e c i a l
s e r v i c e s

s c h e m e

f o r

e l e c t r o n i c a l l y

s u p p l i e d

1. Member States shall permit a non-established taxable
person supplying electronic services to a non-taxable person
who is established or has his permanent address or usually
resides in a Member State to use a special scheme in accord-
ance with the following provisions. The special scheme shall
apply to all those supplies within the Community.

2.
The non-established taxable person shall state to the
Member State of identification when his activity as a taxable
person commences, ceases or changes to the extent that he
no longer qualifies for the special scheme. Such a statement
shall be made electronically.

The information from the non-established taxable person to
the Member State of identification when his taxable activi-
ties commence shall contain the following details for the
identification: name, postal address, electronic addresses,
including websites, national tax number, if any, and a state-
ment that the person is not identified for value added tax
purposes within the Community. The non-established
taxable person shall notify the Member State of identifica-
tion of any changes in the submitted information.

3.
The Member State of identification shall identify the
non-established taxable person by means of an individual
number. Based on the information used for this identifica-
tion, Member States of consumption may keep their own
identification systems.

The Member State of identification shall notify the non-
established taxable person by electronic means of the identi-
fication number allocated to him.

4.
The Member State of identification shall exclude the
non-established taxable person from the identification
register if:

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(a) he notifies that he no longer supplies electronic services,

or

Article 21(2)(b) shall not apply to a non-established

10.
taxable person who has opted for this special scheme.’

(b) it otherwise can be assumed that his taxable activities

have ended, or

(c) he no longer fulfils the requirements necessary to be

allowed to use the special scheme, or

(d) he persistently fails to comply with the rules concerning

the special scheme.

5.
The non-established taxable person shall submit by
electronic means to the Member State of identification a
value added tax return for each calendar quarter whether or
not electronic services have been supplied. The return shall
be submitted within 20 days following the end of
the
reporting period to which the return refers.

The value added tax return shall set out the identification
number and, for each Member State of consumption where
tax has become due, the total value, less value added tax, of
supplies of electronic services for the reporting period and
total amount of the corresponding tax. The applicable tax
rates and the total tax due shall also be indicated.

The value added tax return shall be made in euro.
6.
Member States which have not adopted the euro may
require the tax return to be made in their national curren-
cies. If the supplies have been made in other currencies, the
exchange rate valid for the last date of the reporting period
shall be used when completing the value added tax return.
The exchange shall be done following the exchange rates
published by the European Central Bank for that day, or, if
there is no publication on that day, on the next day of
publication.

7.
The non-established taxable person shall pay the value
added tax when submitting the return. Payment shall be
made to a bank account denominated in euro, designated
by the Member State of identification. Member States which
have not adopted the euro may require the payment to be
made to a bank account denominated in their own
currency.

Notwithstanding Article 1(1) of Directive 86/560/EEC,
8.
the non-established taxable person making use of
this
special scheme shall, instead of making deductions under
this Directive, be granted a refund
Article 17(2) of
according to Directive 86/560/EEC. Articles 2(2), 2(3) and
4(2) of Directive 86/560/EEC shall not apply to the refund
related to electronic supplies covered by this special scheme.

9.
The non-established taxable person shall keep records
of the transactions covered by this special scheme in suffi-
cient detail to enable the tax administration of the Member
State of consumption to determine that the value added tax
return referred to in paragraph 5 is correct. These records
should be made available electronically on request to the
Member State of identification and to the Member State of
consumption. These records shall be maintained for a
period of 10 years from the end of the year when the
transaction was carried out.

Article 2

Article 22, contained in Article 28h of Directive 77/388/EEC, is
hereby amended as follows:

1.

in paragraph 1, point (a) shall be replaced by the following:

‘(a) Every taxable person shall state when his activity as a
taxable person commences, changes or ceases. Member
States shall, subject to conditions which they lay down,
allow the taxable person to make such statements by
electronic means, and may also require that electronic
means are used.’

2.

in paragraph 4, point (a) shall be replaced by the following:

‘(a) Every taxable person shall submit a return by a deadline
to be determined by Member States. That deadline may
not be more than two months later than the end of
each tax period. The tax period shall be fixed by each
Member State at one month, two months or a quarter.
Member States may, however, set different periods
provided that they do not exceed one year. Member
States shall, subject to conditions which they lay down,
allow the taxable person to make such returns by elec-
tronic means, and may also require that electronic
means are used.’

3.

in paragraph 6, point (a) shall be replaced by the following:

‘(a) Member States may require a taxable person to submit a
statement, including all the particulars specified in para-
graph 4, concerning all transactions carried out in the
preceding year. That statement shall provide all the
information necessary for any adjustments. Member
States shall, subject to conditions which they lay down,
allow the taxable person to make such statements by
electronic means, and may also require that electronic
means are used.’

4.

in paragraph 6, the second paragraph in point (b) shall be
replaced by:

‘The recapitulative statement shall be drawn up for each
calendar quarter within a period and in accordance with
procedures to be determined by the Member States, which
shall take the measures necessary to ensure that the provi-
sions concerning administrative cooperation in the field of
indirect taxation are in any event complied with. Member
States shall, subject to conditions which they lay down,
allow the taxable person to make such statements by elec-
tronic means, and may also require that electronic means
are used.’

Article 3

1. Member States shall bring into force the laws, regulations
and administrative provisions necessary to comply with this
Directive on 1 July 2003. They shall forthwith inform the
Commission thereof.

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When Member States adopt these measures, they shall contain
a reference to this Directive or shall be accompanied by such
reference on the occasion of their official publication. Member
States shall determine how such reference is to be made.

electronically supplied services with taxation in the place of
consumption or, if considered necessary for practical reasons,
acting unanimously on the basis of a proposal
from the
Commission, extend the period mentioned in Article 4.

2. Member States shall communicate to the Commission the
text of the provisions of domestic law which they adopt in the
field covered by this Directive.

Article 4

Article 6

This Directive shall enter into force on the day of its publica-
tion in the Official Journal of the European Communities.

Article 1 shall apply for a period of three years starting from 1
July 2003.

This Directive is addressed to the Member States.

Article 7

Article 5

The Council, on the basis of a report from the Commission,
shall review the provisions of Article 1 of this Directive before
30 June 2006 and shall either, acting in accordance with
Article 93 of the Treaty, adopt measures on an appropriate
electronic mechanism on a non-discriminatory basis
for
charging, declaring, collecting and allocating tax revenue on

Done at Brussels, 7 May 2002.

For the Council

The President

R. DE RATO Y FIGAREDO

ANNEX

‘ANNEX L

ILLUSTRATIVE LIST OF ELECTRONICALLY SUPPLIED SERVICES REFERRED TO IN ARTICLE 9(2)(e)

1. Website supply, web-hosting, distance maintenance of programmes and equipment.

2. Supply of software and updating thereof.

3. Supply of images, text and information, and making databases available.

4. Supply of music, films and games, including games of chance and gambling games, and of political, cultural, artistic,

sporting, scientific and entertainment broadcasts and events.

5. Supply of distance teaching.

Where the supplier of a service and his customer communicates via electronic mail, this shall not of itself mean that the
service performed is an electronic service within the meaning of the last indent of Article 9(2)(e).’