WRITTEN QUESTION P-3445/02 by Wolfgang Ilgenfritz (NI) to the Commission. Vehicle leasing abroad — transfer of the place where the service is supplied to the home Member State — amendment of the VAT Directive.
Date: 2002-11-27
Institutions: European Parliament, Provisional data
Subjects: EU law, VAT, amendment of a law, head office, hire purchase, provision of services, tax harmonisation, tax law, tax system

C 88 E/580

Official Journal of the European Union

EN

8.4.2004

Supplementary answer
given by Mr Byrne on behalf of the Commission

(10 March 2003)

The Commission is very concerned about all types of new products whose purpose could be to lead
consumers into nicotine addiction. As far as the product, namely ‘cigalett’, referred to by the Honourable
Member is concerned, although the Commission does not have definite evidence on the exact composition
of this product, the information available appears to indicate that this product contains tobacco. This
would mean that it falls in the category of tobacco products as defined in Directive 2001/37/EC of the
Parliament and of the Council on the approximation of the laws, regulations and administrative provisions
of the Member States concerning the manufacture, presentation and sale of tobacco products (1) (hereafter,
‘the Directive’) and would not fall under food legislation.

‘tobacco products’ means ‘products for the purpose of smoking, sniffing,
According to the Directive,
sucking or chewing, inasmuch as they are, even partly, made of tobacco, whether genetically modified or
not’. The same Directive defines ‘tobacco for oral use’ as ‘all products for oral use, except those intended to
be smoked or chewed, made wholly or partly of tobacco, in powder or in particulate form or in any
combination of those forms, particularly those presented in sachet portions or porous sachets, or in a form
resembling a food product.’ The product in question appears to fall into this category, because according
to the information available to the Commission, it is made of compressed, powdered tobacco designed to
dissolve in the mouth. The Directive requires that Member States shall prohibit the placing on the market
of tobacco for oral use; however, Sweden has been granted a derogation from this prohibition.

If the product is confirmed to contain tobacco, and if it is intended to be dissolved in the mouth rather
than to be chewed, its placing on the market is prohibited in all Member States but Sweden.

As far as labelling is concerned, according to Article 4 of the Directive, tobacco products for oral use (cid:1)
where their marketing is permitted (cid:1) have to carry the following health warning: ‘This tobacco product
can damage your health and is addictive’.

The Honourable Member can be assured that the Commission will follow developments in this area with
great attention, and take any action within its powers that is required from a public health point of view.

(1) OJ L 194, 18.7.2001.

(2004/C 88 E/0593)

WRITTEN QUESTION P-3445/02

by Wolfgang Ilgenfritz (NI) to the Commission

(27 November 2002)

Subject: Vehicle leasing abroad (cid:1) transfer of the place where the service is supplied to the home Member

State (cid:1) amendment of the VAT Directive

Advocate-General Geelhoed delivered his opinion in Case C-155/01 concerning tax on own consumption
resulting from vehicles leased in another Member State on 10 October 2002. In his conclusions, the
Advocate-General endorses the complainant’s view that the tax levied on own consumption (section 1(1)2
of the Austrian VAT law) in relation to leasing in another Member State contravenes the provisions of the
Sixth VAT Directive. He bases his opinion on Article 9(1) of the Directive, which lays down that, with
regard to the hiring of motor vehicles in the form of leasing, the place where the service is supplied is the
place where the supplier is established.

According to information from the Austrian Finance Ministry, the VAT Directive is to be amended as
follows: the place where the service is supplied is to be transferred from the place where the leasing firm is
established to the place where the firm using the vehicle is established.

Is the Commission in favour of amending the Sixth VAT Directive so as to transfer the place where the
service is supplied from the place where the leasing firm is established to the place where the firm using
the vehicle is established?

If so, when will the Directive be amended?

8.4.2004

EN

Official Journal of the European Union

C 88 E/581

Answer given by Mr Bolkestein on behalf of the Commission

(7 January 2003)

The Commission has submitted in June 1998 a proposal for a Directive (1) aiming to replace the Eighth
VAT Directive (2) refund procedure by a system of cross-border deduction of the VAT paid in another
Member State. According to this proposal, taxable persons could recover VAT directly on the VAT return
they submit in their Member State of establishment following the rules for the right of deduction in that
Member State. The Commission believes that adoption of this proposal would solve the problems Austria
faces with leasing of motor vehicles.

Despite the large support of the Parliament and the Economic and Social Committee, the Council has not
yet adopted by unanimity this proposal.

At the Ecofin Council meeting on 4 June 2002, the Council noted the Presidency’s intention to reopen
discussion on the cross-border deduction of VAT and harmonisation of the right to deduct VAT in the case
of passenger vehicles, as well as the Commission’s intention to prioritise work on the revision of Article 9
of the Sixth VAT Directive (3), which deals with the place of supply of services.

Following an initial consultation of Member States, the Commission has concluded that it should focus its
work in the near future on modernising the rules for the place of the supply of business to business
services, including cross-border leasing of means of transport. One of the options that will be discussed
with the Member States is an amendment of the Sixth VAT Directive as the Honourable Member
suggested.

The Commission hopes to be in a position to bring forth proposals for amending Article 9 of the Sixth
VAT Directive in the course of 2003.

(1) OJ C 219, 15.7.1998.
(2) Eighth Council Directive 79/1072/EEC of 6 December 1979 on the harmonization of the laws of the Member
States relating to turnover taxes (cid:1) Arrangements for the refund of value added tax to taxable persons not
established in the territory of the country, OJ L 331, 27.12.1979.

(3) Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonization of the laws of the Member States
relating to turnover taxes (cid:1) Common system of value added tax: uniform basis of assessment, OJ L 145,
13.6.1977.

(2004/C 88 E/0594)

WRITTEN QUESTION E-3512/02

by Herman Vermeer (ELDR) to the Commission

(10 December 2002)

Subject: Problem of mutual recognition in the port of Antwerp involving a visa issued by a Schengen state

As of 1 October 2002 the Vision list has been distributed in the port of Antwerp. The nationalities
included on the Vision list must register using a so-called STVZ form and may not travel on to another
Schengen Member State. They may leave Belgium in order to return to their country of origin or they may
be deported to non-Schengen countries such as the United Kingdom or Switzerland. The rule also applies
in reverse. Seamen holding one of the nationalities on the Vision list and seeking to enter Belgium via
Amsterdam (Schiphol) Frankfurt or Paris are being turned away at the Belgian border, preventing them
from checking whether their ship is docked in a Belgian port. They are thus being forced to enter Belgium
either directly or via a non-Schengen country, such as Switzerland or the United Kingdom. The result of
this requirement to register is that the Belgian border police no longer recognises a visa issued by a
Schengen partner. To my mind, this runs counter to the agreements concluded between and by the
Schengen countries.

Will the Commission, as guardian of the Schengen Convention, examine this matter more closely and
clarify it? To what extent has the Vision list been drawn up by the Belgian authorities in keeping with the
terms of the Schengen Convention? What criteria have the Belgian authorities employed when placing
countries on that list? Why may nationalities on the list enter Belgium directly or via non-Schengen
countries? Does this Vision list in fact constitute a hidden support measure for the national airport in
Brussels? Can the Commission clarify this matter?