Proposal for a Council Decision amending Council Decision 97/510/EC authorizing Ireland to apply a measure derogating from Article 21 of the Sixth Directive (77/388/EEC) on the harmonization of the laws of the Member States relating to turnover taxes
Date: 2003-09-10
Institutions: European Commission
Subjects: Ireland, VAT, derogation from EU law, tax avoidance, tax evasion, tax harmonisation

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 10.09.2003
COM(2003) 539 final

Proposal for a

COUNCIL DECISION

amending Council Decision 97/510/EC authorizing Ireland to apply a measure
derogating from Article 21 of the Sixth Directive (77/388/EEC) on the harmonization of
the laws of the Member States relating to turnover taxes

(presented by the Commission)

1.

2.

3.

4.

5.

6.

7.

1

2

3

EXPLANATORY MEMORANDUM

Under  Article  27  of  the  Sixth  Council  Directive  of  17  May  1977  on  the
harmonisation of the laws of the Member States relating to turnover taxes - Common
system  of  value  added  tax:  uniform  basis  of  assessment,1  the  Council,  acting
unanimously on a proposal from the Commission, may authorise any Member State
to introduce special measures for derogation from the provisions of the Directive, in
order to simplify the procedure for charging the tax or to prevent certain types of tax
evasion or avoidance.

As a rule, such authorisations are given on a temporary basis, so that an assessment
can be made after a few years as to whether the special measures are appropriate and
effective.

The  Decision  97/510/EC2  taken  by  the  Council  under  Article  27  of  the  Sixth
Directive  authorised  Ireland  to  apply  a  measure  derogating  from  Article  21  of  the
Directive to allow it to combat tax evasion and tax fraud in the real-estate sector. The
Decision 2000/435/EC3 extended this exemption to 31 December 2003, when it will
expire.

By  letter  received  by  the  Secretariat-General  on  4  July  2003,  Ireland  requested
authorisation to extend application of these measures by further four years.

In  accordance  with  Article  27(3)  of  the  Sixth  Directive,  the  Commission  informed
the other Member States by letter of 9 July 2003 of the request made by Ireland.

In  the  Commission’s  view,  the  matters  of  law  and  of  fact  which  justified  the
application of the special measures in question have not changed and still pertain.

In view of the above, the Commission considers that the request for extension made
by Ireland should be granted and that the Decision referred to above should therefore
be extended to 31 December 2007.

OJ L 145, 13.6.1977, p.1. Directive last amended by Directive 2002/93/EC (OJ L 331, 7.12.2002, p.27
and OJ L 18, 23.1.2003, p.55).
OJ L 214, 6.8.1997, p.37.
OJ L 172, 12.7.2000, p.24.

2

                                                
Proposal for a

COUNCIL DECISION

amending Council Decision 97/510/EC authorizing Ireland to apply a measure
derogating from Article 21 of the Sixth Directive (77/388/EEC) on the harmonization of
the laws of the Member States relating to turnover taxes

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community,

Having  regard  to  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 - Common system
of  value  added  tax:  uniform  basis  of  assessment,4  and  in  particular  Article 27  paragraph  1
thereof,

Having regard to the proposal from the Commission5,

Whereas:

(1) 

(2) 

(3) 

(4) 

By  letter  received  by  the  Secretariat-General  of  the  Commission  on  4  July  2003
Ireland  requested  the  extension  of  Decision  97/510/EC6  authorising  it  to  apply  a
measure derogating from Article 21 of the Sixth Directive which enabled it to combat
tax evasion and tax fraud in the real-estate sector until 31 December 2007.

The matters of law and of fact which justified the application of the special measures
in question have not changed and still pertain.

The authorisation should therefore be extended until 31 December 2007.

The  derogation  in  question  has  no  impact  on  the  European  Communities’  own
resources from valued added tax,

HAS ADOPTED THIS DECISION:

In  Article  1  of  Decision  97/510/EC,  the  date  31  December  2003  is  replaced  by
31 December 2007.

Article 1

4

5

6

OJ L 145, 13.6.1977, p.1. Directive last amended by Directive 2002/93/EC (OJ L 331, 7.12.2002, p.27
and OJ L 18, 23.1.2003, p.55).
OJ C […], […], p.[…]
OJ L 214, 6.8.1997, p.37.

3

                                                
This Decision is addressed to Ireland.

Done at Brussels,

Article 2

For the Council
The President

4