Council Directive 2004/7/EC of 20 January 2004 amending Directive 77/388/EEC concerning the common system of value added tax, as regards conferment of implementing powers and the procedure for adopting derogations
Date: 2004-01-20
Institutions: Council of the European Union
Subjects: VAT, basis of tax assessment, distributive trades, provision of services, tax exemption

L 27/44

EN

Official Journal of the European Union

30.1.2004

COUNCIL DIRECTIVE 2004/7/EC

of 20 January 2004

amending Directive 77/388/EEC concerning the common system of value added tax, as regards
conferment of implementing powers and the procedure for adopting derogations

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Com-
munity, and in particular Article 93 thereof,

Having regard to the proposal from the Commission,

Having regard to the opinion of the European Parliament (1),

Having regard to the opinion of the European Economic and
Social Committee (2),

Whereas:

(1)

(2)

(3)

(4)

(5)

(6)

Articles 27 and 30 of 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 (3),
lay down procedures that may result in the
tacit approval of derogations by the Council.

In the interests of transparency and legal certainty, it is
preferable to ensure that every derogation authorised
under Article 27 or Article 30 of Directive 77/388/EEC
takes the form of an explicit decision adopted by the
Council acting on a proposal from the Commission.

The possibility of tacit approval by the Council on the
expiry of a given period should therefore be removed.

In order to ensure that a Member State which has
submitted a request for derogation is not left in doubt as
to what action the Commission plans
to take in
response, time limits should be laid down within which
the Commission must present to the Council either a
proposal for authorisation or a communication setting
out its objections.

In order to enable Member States to follow more closely
the processing of their requests, the Commission should
be required, once it has all the information it considers
necessary for appraising a request,
to notify the
requesting Member State accordingly and transmit the
request,
language, to the other Member
States.

in its original

In the second sentence of paragraph 1 of Article 27 of
Directive 77/388/EEC it is emphasised that the assess-
ment of the negligible extent of the effect of the simplifi-
cation measure on the amount of tax due at the final
consumption stage is made in a global manner by refer-
ence to macroeconomic forecasts relating to the likely
impact of
the measure on the Community's own
resources provided from VAT.

(1) Opinion delivered on 16 December 2003 (not yet published in the

Official Journal).

(2) Opinion delivered on 30 October 2003 (not yet published in the

Official Journal).

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

2003/92/EC (OJ L 260, 11.10.2003, p. 8).

(7)

(8)

(9)

In the absence of any mechanism for the adoption of
binding measures to govern the implementation of
Directive 77/388/EEC, the application of rules laid down
in that Directive varies from one Member State to
another.

In order to improve the functioning of
the internal
market, it is essential to ensure more uniform applica-
tion of the current VAT system. The introduction of a
procedure for the adoption of measures to ensure the
correct implementation of existing rules would represent
a major step forward in that respect.

should,

in particular,

Those measures
the
problem of double taxation of cross-border transactions
which can occur as the result of divergences between
Member States in the application of the provisions of
Directive 77/388/EEC governing the place of supply.

address

(10) However,

the scope of each implementing measure
should remain limited since, albeit designed to clarify a
provision laid down in Directive 77/388/EEC, it could
never derogate from such a provision.

(11) Although the scope of

the implementing measures
would be
a
budgetary impact which for one or more Member States
could be significant.

those measures would have

limited,

(12)

The impact of such measures on the budgets of Member
States justifies the Council reserving the right to exercise
powers for the implementation of Directive 77/388/EEC
itself.

(13) Given the restricted scope of the measures envisaged,
measures implementing Directive 77/388/EEC should be
adopted by the Council acting unanimously on a
proposal from the Commission.

(14)

Since, for those reasons, the objectives of this Directive
cannot be sufficiently achieved by the Member States
acting alone and can therefore be better achieved at
Community level, the Community may adopt measures
in accordance with the principle of subsidiarity as set
out in Article 5 of the Treaty. In accordance with the
principle of proportionality, as set out in that Article,
this Directive does not go beyond what is necessary in
order to achieve those objectives.

30.1.2004

EN

Official Journal of the European Union

L 27/45

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

3. Article 30 shall be replaced by the following:

accordingly,

HAS ADOPTED THIS DIRECTIVE:

Article 1

Directive 77/388/EEC is amended as follows:

1. In Article 27, paragraphs 1, 2, 3 and 4 shall be replaced by

the following:
‘1.
The Council, acting unanimously on a proposal from
the Commission, may authorise any Member State to intro-
duce special measures for derogation from the provisions of
this Directive, in order to simplify the procedure for char-
ging the tax or to prevent certain types of tax evasion or
avoidance. Measures intended to simplify the procedure for
charging the tax, except to a negligible extent, may not
affect the overall amount of the tax revenue of the Member
State collected at the stage of final consumption.

2.
A Member State wishing to introduce the measure
referred to in paragraph 1 shall send an application to the
Commission and provide it with all the necessary informa-
tion. If the Commission considers that it does not have all
the necessary information, it shall contact the Member State
concerned within two months of receipt of the application
and specify what additional information is required. Once
the Commission has all the information it considers neces-
sary for appraisal of the request it shall within one month
notify the requesting Member State accordingly and it shall
transmit the request, in its original language, to the other
Member States.

3. Within three months of giving the notification referred
to in the last sentence of paragraph 2, the Commission shall
present to the Council either an appropriate proposal or,
should it object to the derogation requested, a communica-
tion setting out its objections.

In any event, the procedure set out in paragraphs 2
4.
and 3 shall be completed within eight months of receipt of
the application by the Commission.’

2. In Title XVII, the following Article 29a shall be inserted:

‘Article 29a

Implementing measures

The Council, acting unanimously on a proposal from the
Commission, shall adopt the measures necessary to imple-
ment this Directive.’

‘Article 30

International agreements

The Council, acting unanimously on a proposal from
1.
the Commission, may authorise any Member State to
conclude with a third country or an international organisa-
tion an agreement which may contain derogations from this
Directive.

A Member State wishing to conclude such an agree-
2.
ment shall send an application to the Commission and
provide it with all the necessary information. If the Commis-
sion considers that it does not have all the necessary infor-
mation, it shall contact the Member State concerned within
two months of receipt of the application and specify what
additional
information is required. Once the Commission
has all the information it considers necessary for appraisal
of
shall within one month notify the
requesting Member State accordingly and it shall transmit
the request, in its original language, to the other Member
States.

the request

it

3. Within three months of giving the notification referred
to in the last sentence of paragraph 2, the Commission shall
present to the Council either an appropriate proposal or,
should it object to the derogation requested, a communica-
tion setting out its objections.

4.
In any event, the procedure set out in paragraphs 2
and 3 shall be completed within eight months of receipt of
the application by the Commission.’

Article 2

This Directive shall enter into force on the 20th day following
its publication in the Official Journal of the European Union.

Article 3

This Directive is addressed to the Member States.

Done at Brussels, 20 January 2004.

For the Council

The President

C. McCREEVY