Council Directive 2003/92/EC of 7 October 2003 amending Directive 77/388/EEC as regards the rules on the place of supply of gas and electricity
Date: 2003-10-07
Institutions: Council of the European Union
Subjects: VAT, delivery, electrical energy, electricity supply, energy distribution, gas

L 260/8

EN

Official Journal of the European Union

11.10.2003

COUNCIL DIRECTIVE 2003/92/EC

of 7 October 2003

amending Directive 77/388/EEC as regards the rules on the place of supply of gas and electricity

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Commu-
nity, and in particular Article 93 thereof,

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

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

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

Whereas:

(1)

(2)

(3)

(4)

Increasing liberalisation of the gas and electricity sector,
aimed at completing the internal market for electricity
and natural gas, has revealed a need to review the
current VAT rules on the place of supply of those goods,
set out in 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 assess-
ment (4), in order to modernise and simplify the opera-
the
tion of
internal market, a strategy to which the Commission is
committed.

the VAT system within the context of

Electricity and gas are treated as goods
for VAT
purposes, and, accordingly, the place of their supply
with respect to cross-border transactions has to be deter-
mined in accordance with Article 8 of Directive 77/388/
EEC. However, since electricity and gas are difficult to
track physically it is particularly difficult to determine
the place of supply under the current rules.

In order to attain a real internal market for electricity
and gas without VAT obstacles, the place of supply of
gas through the natural gas distribution system and of
electricity, before the goods reach the final stage of
consumption, should be determined to be the place
where the customer has established his business.

The supply of electricity and gas in the final stage, from
traders and distributors to final consumer, should be
taxed at the place where the customer has effective use
and consumption of the goods, in order to ensure that
taxation takes place in the country where actual
consumption takes place. This is normally the place
where the meter of the customer is located.

(1) Proposal of 5 December 2002 (not yet published in the Official

Journal).

(2) Opinion delivered on 13.5.2003 (not yet published in the Official

Journal).

(3) Opinion delivered on 26.3.2003 (not yet published in the Official

Journal).

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

2002/93/EC (OJ L 331, 7.12.2002, p. 27).

(5)

(6)

(7)

Electricity and gas are supplied through distribution
networks, to which network operators provide access. In
order to avoid double or non-taxation, it is necessary to
harmonise the rules governing the place of supply of the
transmission and transportation services. Access to and
use of the distribution systems and the provision of
other services directly linked to these services should
therefore be added to the list of specific instances set out
in Article 9, paragraph 2(e) of Directive 77/388/EEC.

The import of gas through the natural gas distribution
system, or of electricity, should be exempted in order to
avoid double taxation.

Those changes in the rules governing the place of supply
of gas through the natural gas distribution system, or of
electricity,
should be combined with a compulsory
reverse charge when the customer is a person identified
for VAT purposes.

(8)

Directive 77/388/EEC should therefore be amended
accordingly,

HAS ADOPTED THIS DIRECTIVE:

Article 1

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

1.

in Article 8(1), the following points are added:

‘(d) in the case of the supply of gas through the natural gas
distribution system, or of electricity, to a taxable dealer:
the place where that taxable dealer has established his
business or has a fixed establishment for which the
goods are supplied, or, in the absence of such a place of
business or fixed establishment, the place where he has
his permanent address or usually resides.

“Taxable dealer”
this provision
for the purposes of
means a taxable person whose principal activity in
respect of purchases of gas and electricity is reselling
such products and whose own consumption of these
products is negligible.

11.10.2003

EN

Official Journal of the European Union

L 260/9

(e) in the case of the supply of gas through the natural gas
distribution system, or of electricity, where such a
supply is not covered by point (d): the place where the
customer has effective use and consumption of
the
goods. Where all or part of the goods are not in fact
consumed by this customer, these non consumed goods
are deemed to have been used and consumed at the
place where he has established his business or has a
fixed establishment for which the goods are supplied. In
the absence of such a place of business or fixed estab-
lishment, he is deemed to have used and consumed the
goods at the place where he has his permanent address
or usually resides.’;

2.

in Article 9(2)(e), the following indent is inserted after the
eighth indent:
‘— the provision of access to, and of transport or transmis-
sion through, natural gas and electricity distribution
systems and the provision of other directly linked
services.’;

3.

in Article 14(1), the following point is added:
‘(k) import of gas through the natural gas distribution

system, or of electricity.’;

4. Article 21(1)(a),

in the version set out in Article 28g,

is

replaced by the following:
‘(a) the taxable person carrying out the taxable supply of
goods or of services, except for the cases referred to in
(b), (c) and (f). Where the taxable supply of goods or of
services is effected by a taxable person who is not estab-
lished within the territory of the country, Member States
may, under the conditions determined by them,
lay
down that the person liable to pay tax is the person for
whom the taxable supply of goods or of services is
carried out;’

5.

in Article 21(1), in the version set out in Article 28g, the
following point is added:
‘(f) persons who are identified for value added tax purposes
within the territory of the country and to whom goods
are supplied under the conditions set out in Article
8(1)(d) or (e), if the supplies are carried out by a taxable
person not established within the territory of
the
country.’;

6.

in Article 22(1)(c), in the version set out in Article 28h, the
first intent is replaced by the following:
‘— Every taxable person, with the exception of

those
referred to in Article 28a(4), who, within the territory
of the country, effects supplies of goods or of services
giving him the right of deduction, other than supplies
of goods or of services for which tax is payable solely
by the customer or the recipient in accordance with
Article 21(1)(a), (b), (c) or (f). However, Member States
need not identify certain taxable persons referred to in
article 4(3),’;

7.

in Article 28a(5)(b) the following indent is added:
‘— the supply of gas through the natural gas distribution
system, or of electricity, under the conditions set out in
Article 8(1)(d) or (e).’

Article 2

Member States shall bring into force the laws, regulations and
administrative provisions necessary to comply with this Direc-
tive on 1 January 2005. They shall
forthwith inform the
Commission thereof. When Member States adopt those provi-
sions, they shall contain a reference to this Directive or be
accompanied by such a reference on the occasion of their offi-
cial publication. The methods of making such reference shall
be laid down by Member States.

Article 3

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

This Directive is addressed to the Member States.

Article 4

Done at Luxembourg, 7 October 2003.

For the Council

The President

G. TREMONTI