Proposal for a Council Decision to extend the application of Decision 2000/91/EC of 24 January 2000 authorising the Kingdom of Denmark and the Kingdom of Sweden to apply a measure derogating from Article 17 of the Sixth Council Directive (77/388/EEC) of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes
Date: 2002-11-25
Institutions: European Commission
Subjects: Denmark, Sweden, VAT, derogation from EU law, tax harmonisation

C 45 E/340

EN

Official Journal of the European Union

25.2.2003

Proposal for a Council Decision to extend the application of Decision 2000/91/EC of 24 January
2000 authorising the Kingdom of Denmark and the Kingdom of Sweden to apply a measure
derogating from Article 17 of the Sixth Council Directive (77/388/EEC) of 17 May 1977 on the
harmonisation of the laws of the Member States relating to turnover taxes

(2003/C 45 E/36)

COM(2002) 650 final

(Submitted by the Commission on 25 November 2002)

EXPLANATORY MEMORANDUM

By letters registered with the Commission's Secretariat-General on 25 July 2002 and 28 October 2002
respectively, Denmark and Sweden applied under Article 27 of Council Directive 77/388/CEE of 17 May
1977 on the harmonization of the laws of the Member States relating to turnover taxes — common
system of value added tax: uniform basis of assessment (1) (the Sixth Directive) to be authorised to continue
applying a special measure originally authorised by the Council in Decision 2000/91/EC of 24 January
2000 (2).

In accordance with Article 27, the other Member States were informed of the request by letter dated 6
November 2002.

The special measure introduces simplified rules on the recovery of VAT in connection with tolls on the
fixed link (Öresund link) between the Kingdom of Denmark and the Kingdom of Sweden.

Under Article 17 of the Directive, VAT on the tolls must be deducted in the Member State where it was
paid. This means that taxable persons based in Denmark or Sweden would normally have to recover part
of the VAT on tolls by entering it on the regular returns lodged in their Member State of establishment and
the rest via the refund procedure laid down in the Eighth VAT Directive. Moreover, taxable persons who
are not established in either Member State would have to lodge two requests for refunds, under the Eighth
or the Thirteenth VAT Directive, as the case may be.

The Swedish and Danish authorities consider that applying the normal VAT rules would create excessive
paperwork for taxpayers and administrations alike.

Under the above Decision, Denmark and Sweden were authorised to apply special measures by which VAT
deduction and reimbursement were administered by a single country. The rules are:

— In their regular returns taxable persons established in Denmark or Sweden are entitled to deduct the
whole amount of deductible VAT on tolls, including that relating to the use of the link on the territory
of the Member State in which they are not established.

— To recover the VAT deductible via the procedure laid down in the Eighth or Thirteenth Directive,
taxable persons who are not established in either of the Member States concerned have to apply to the
Swedish authorities only.

This authorisation expires on 31 December 2002, although the legal situation and the facts which justified
application of the simplification measure in the first place have not changed.

It should be remembered that, if the proposal for a Directive as regards the rules governing the right to
deduct Value Added Tax which was presented to the Council on 17 June 1998 (3), were adopted, the
special measure under consideration would no longer be necessary for any taxable person established in
the Community.

The authorisation should therefore be granted for a limited period and provide that it remain valid up to
the entry into force of the said Directive, or up to 31 December 2006 at the latest if the Directive has not
yet entered into force by then.

(1) OJ L 145, 13.6.1977, p. 1, as last amended by Directive 2002/38/EC (OJ L 128, 15.5.2002, p. 41).
(2) OJ L 28, 3.2.2000, p. 38.
(3) OJ C 219, 15.7.1998, p.16.

25.2.2003

EN

Official Journal of the European Union

C 45 E/341

THE COUNCIL OF THE EUROPEAN UNION,

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

relating to turnover

Having regard to the proposal from the Commission,

Whereas:

(1) By letters registered with the Commission's Secretariat-
General on 25 July 2002 and 28 October 2002
respectively, the Danish and Swedish authorities requested
authorisation to extend the application of the derogation
granted to them by Council Decision 2000/91/EC (2).

(2) The other Member States were informed of this application

on 6 November 2002.

(3) These applications relate to the operation of the Öresund
fixed link between Denmark and Sweden, and in particular
to the recovery of VAT paid on tolls for the use of the link.
Under the rules of territoriality, part of the VAT on tolls is
payable to Denmark and part to Sweden.

(4) By derogation from the provisions of Article 17 of
Directive 77/388/EEC, as amended by Article 28f of that
Directive, requiring taxable persons to exercise their right
to deduct or obtain a refund of VAT in the Member State
where it was paid, the Swedish and Danish authorities were
authorised to introduce
enabling
a
taxpayers to recover VAT from a single administration.

special measure

(5) This authorisation expires on 31 December 2002 although
the legal situation and the facts which justified application
of the simplification measure in the first place have not
changed.

(6) On 17 June 1998 the Commission presented a proposal for
a Council Directive amending the Sixth Directive as regards
the rules governing the right to deduct value added tax (3),
adoption of which would render the special measures
taxable
unnecessary in the majority of cases where
persons established in the Community are involved.

(7) The extension of

the authorisation should therefore be
granted for a limited period and remain valid up to the
entry into force of
the said Directive, or up to 31
December 2006 at the latest if the Directive has not yet
entered into force by then.

(8) The derogation will have no negative incidence on the

Communities' own resources from VAT,

HAS ADOPTED THIS DECISION:

Article 1

In Article 2 of Decision 2000/91/EC, the date ‘31 December
2002’ shall be replaced by ‘31 December 2006’.

Article 2

This Decision is addressed to the Kingdom of Denmark and the
Kingdom of Sweden.

(1) OJ L 145, 13.6.1977, p. 1, as

last amended by Directive

2002/38/EC (OJ L 128, 15.5.2002, p. 41).

(2) OJ L 28, 3.2.2000, p. 38.

(3) OJ C 219, 15.7.1998, p. 16.