2004/228/EC: Council Decision of 26 February 2004 authorising Spain to apply a measure derogating from Article 21 of the Sixth Council Directive 77/388/EEC on the harmonisation of the laws of the Member States relating to turnover taxes
Date: 2004-02-26
Institutions: Council of the European Union
Subjects: Spain, derogation from EU law, tax exemption, tax harmonisation, waste, waste recycling

9.3.2004

EN

Official Journal of the European Union

L 70/37

COUNCIL DECISION

of 26 February 2004

authorising Spain to apply a measure derogating from Article 21 of the Sixth Council Directive 77/
388/EEC on the harmonisation of the laws of the Member States relating to turnover taxes

(2004/228/EC)

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 (1), and in particular
Article 27 thereof,

Having regard to the proposal from the Commission,

Whereas:

(1)

(2)

(3)

(4)

(5)

Pursuant to Article 27(1) of Directive 77/388/EEC, the
Council, acting unanimously on a proposal from the
Commission, may authorise any Member State to intro-
duce or extend special measures for derogation from
that Directive in order to simplify the procedure for
charging the tax or to prevent certain types of
tax
evasion or avoidance.

By letter registered with the Secretariat-General of the
Commission on 27 October 2003, the Spanish Govern-
ment
tax
requested authorisation to apply special
measures to the waste sector.

The other Member States were informed of Spain's
request on 7 November 2003.

The derogation in question is intended to allow Spain to
designate the recipient of specific types of supplies in
the waste sector, as the person liable to pay the tax. In
accordance with Article 17(2)(a) of Directive 77/388/
EEC, the recipient of the supplies in the waste sector will
be able to deduct the tax due for such supplies. This will
minimise the problems faced by tax authorities
in
collecting the VAT due in that sector.

The requested measure is to be considered first and fore-
most as a measure to prevent certain types of
tax
evasion in the waste recycling sector, such as the non-
payment of invoiced VAT by traders engaged in the
collection, sorting and basic transformation of waste
material, who subsequently become untraceable. The
measure also has the effect of simplifying the work of
the tax authorities.

(1) 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).

(6)

(7)

(8)

(9)

The measure is proportionate to the objectives pursued,
since it is not intended to apply to all taxable operations
in the sector concerned but only to specific operations
which pose considerable problems of tax evasion.

On 7 June 2000 the Commission published a strategy to
improve the operation of the VAT system in the short
in which it undertook to rationalise the large
term,
number of derogations currently in force. In some cases,
however,
this rationalisation could involve extending
certain particularly effective derogations to all Member
States.

The Commission's recent contacts with certain national
administrations and representatives of the sector suggest
that special rules specifically adapted to the sector might
be necessary to ensure fairer taxation of
the traders
the Community. The Commission
concerned across
intends to prepare a proposal
for a special scheme
applying to the waste recycling sector.

Consequently, this derogation should expire on the date
of entry into force of a special scheme for the applica-
tion of VAT to the recycled waste sector, but not later
than 31 December 2005.

(10)

The derogation has no adverse impact on the Commu-
nities' own resources accruing from VAT, nor does it
have any effect on the amount of VAT charged at the
final stage of consumption,

HAS ADOPTED THIS DECISION:

Article 1

By way of derogation from Article 21(1)(a) of Directive 77/
388/EEC, as worded in Article 28(g) thereof, the Kingdom of
Spain is hereby authorised to designate the recipient of the
supplies of goods and services referred to in Article 2 of this
Decision as the person liable to pay VAT.

L 70/38

EN

Official Journal of the European Union

9.3.2004

Article 2

Article 3

The recipient of the supply of goods or services may be desig-
nated as the person liable to pay VAT in the following
instances:

(a) supplies of industrial waste, ferrous waste and scrap, resi-
dues and other recyclable materials consisting of ferrous
and non-ferrous metals, their alloys, slag, ash and industrial
residues containing metals or their alloys, and the supply of
selection, cutting,
fragmenting and pressing services for
these products;

(b) supplies of waste material consisting of paper, paperboard

or glass;

(c) supplies of semi-finished products (e.g.

ingots, blocks,
sheets, bars, grains, granules, wire rod, etc.) resulting from
the processing, manufacturing or melting down of non-
ferrous metals, except those containing nickel.

This Decision shall expire on the date of entry into force of a
special scheme for the application of VAT to the recycled waste
sector amending Directive 77/388/EEC, but not later than 31
December 2005.

This Decision is addressed to the Kingdom of Spain.

Article 4

Done at Brussels, 26 February 2004.

For the Council

The President

N. DEMPSEY