2004/516/EC:Council Decision of 14 June 2004 amending Decision 98/20/EC authorising the Kingdom of the Netherlands to apply a measure derogating from Article 21 of the Sixth Directive 77/388/EEC on the harmonisation of the laws of the Member States relating to turnover taxes
Date: 2004-06-14
Institutions: Council of the European Union
Subjects: Netherlands, VAT, approximation of laws, clothing industry, derogation from EU law, subcontracting

22.6.2004

EN

Official Journal of the European Union

L 221/17

COUNCIL DECISION

of 14 June 2004

amending Decision 98/20/EC authorising the Kingdom of the Netherlands to apply a measure
derogating from Article 21 of the Sixth Directive 77/388/EEC on the harmonisation of the laws
of the Member States relating to turnover taxes

(2004/516/EC)

this

however,

cases
involve
extending certain particularly effective derogations to all
Member States. The Commission’s communication of 20
October 2003 reiterates this compromise.

rationalisation

could

(7)

(8)

(9)

The requested measure is to be considered first and
foremost as a measure to prevent certain types of tax
evasion in the ready-to-wear clothing industry.

The Kingdom of the Netherlands should be granted an
extension for the current derogation until 31 December
2006 .

The derogation has no adverse impact on the European
Communities’ own resources accruing from VAT nor
does it affect the amount of VAT charged at the final
stage of consumption.

(10)

In order to ensure legal continuity, this Decision should
apply as from 1 January 2004,

HAS ADOPTED THIS DECISION:

Article 1

Decision 98/20/EC is hereby amended as follows:

— in Article 1 the date ‘31 December 2003’ shall be replaced

by ‘31 December 2006’.

Article 2

This Decision shall apply from 1 January 2004.

Article 3

This Decision is addressed to the Kingdom of the Netherlands.

Done at Luxembourg, 14 June 2004.

For the Council

The President

B. COWEN

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty
Community,

establishing the European

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)

(6)

Pursuant to Article 27(1) of the Sixth VAT Directive, the
from the
Council, acting unanimously on a proposal
Commission, may authorise
to
introduce 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.

any Member State

registered with the Secretariat-General of
By letter
the
26 November
the Commission
Dutch Government requested the extension of Decision
98/20/EC (2) authorising it to apply special tax measures
to the ready-to-wear clothing industry.

2003,

on

The other Member States were informed of the Nether-
lands’ request on 14 January 2004.

Decision 98/20/EC, authorised the Kingdom of
the
Netherlands to introduce in the ready-to-wear clothing
industry a scheme for shifting the subcontractor’s obli-
gation to pay over VAT to the tax authorities from the
to the clothing firm (the contractor).
subcontractor

arrangements

These
constitute
an effective
fraud-
in which collecting
prevention measure in a sector
VAT is rendered awkward by the difficulty of identifying
and supervising the activities of subcontractors.

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,
In some
number of derogations currently in force.

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

2004/15/EC (OJ L 52, 21.2.2004, p. 61).

(2) OJ L 8, 14.1.1998, p. 16. Decision as amended by Decision

2000/435/EC (OJ L 172, 12.7.2000, p. 24).