2004/738/EC:Council Decision of 21 October 2004 authorising Portugal to apply a measure derogating from Articles 21(1)(a) and 22 of Sixth Directive 77/388/EEC on the harmonisation of the laws of the Member States relating to turnover taxes
Date: 2004-10-21
Institutions: Council of the European Union
Subjects: Portugal, VAT, VAT resource, derogation from EU law, door-to-door selling, tax harmonisation, tax system

L 325/62

EN

Official Journal of the European Union

28.10.2004

COUNCIL DECISION

of 21 October 2004

authorising Portugal to apply a measure derogating from Articles 21(1)(a) and 22 of Sixth Directive
77/388/EEC on the harmonisation of the laws of the Member States relating to turnover taxes

(2004/738/EC)

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
Member States relating to turnover taxes — Common system
of value-added tax: uniform basis for assessment (1), and in
particular Article 27(1) thereof,

the laws of

Having regard to the proposal from the Commission,

Whereas:

(7)

(8)

The resellers concerned will no longer be required to pay
tax on their sales and will therefore not benefit from the
right to deduct.

This arrangement constitutes a derogation from Article
21(1)(a) of the Sixth Directive in that the wholesaler will
be deemed liable for the tax on goods sold to end
consumers by his resellers.

(9) Wholesalers are therefore required to fulfil

tax

returns,

regarding

tax
in respect of

the obli-
and
gations
the goods their
tax, etc.,
payment of
resellers sell
to final consumers and, by derogation
from Article 22, their resellers are exempt from these
obligations in respect of the goods they supply to final
consumers.

invoicing

(1)

(2)

(3)

(4)

(5)

(6)

By letter registered with the Commission on 19 February
2004 Portugal requested authorisation to introduce a
derogating measure in respect of
the doorstep sales
sector.

The other Member States were informed thereof on 26
March 2004.

Portugal was notified on 30 March 2004 that
the
Commission was in possession of all the information it
needed to take a decision on the matter.

The measure is intended to enable certain firms engaged
in doorstep selling to pay on behalf of their resellers the
VAT due on the prices of the products the resellers sell
to their customers, provided that the entire turnover of
the firms is obtained from doorstep sales by resellers
working in their own name and on their own account
and that price lists setting out the selling price charged to
the public for all the firms' products are drawn up in
advance and adhered to.

(10)

The arrangement was authorised by the earlier Council
Decision 1999/82/EC of 18 January 1999 (2), which was
applicable from 1 January 1999 to 31 December 2000.

(11)

this derogation is a
The Commission considers that
simplification measure and therefore fulfils the conditions
set out in Article 27 of the Sixth Directive.

(12)

The derogation should be authorised until 31 December
2009.

(13)

The derogation will not alter
the amount of VAT
collected at the stage of final consumption and will not
have a negative effect on the European Communities'
own resources obtained from value added tax,

The derogation will apply solely to cases where the firm
sells its products direct to resellers who,
in turn, sell
direct to final consumers.

HAS ADOPTED THIS DECISION:

Firms which fulfil the above conditions and have been
duly authorised by the tax administration will pay to the
treasury the amount of VAT due on the pre-established
retail selling price.

Article 1

Portugal is hereby authorised to apply until 31 December 2009
the taxation of doorstep sales that
a special measure for
contains
from Sixth Directive
derogating
77/388/EEC.

provisions

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

2004/66/EC (OJ L 168, 1.5.2004, p. 35).

(2) OJ L 27, 2.2.1999, p. 28.

28.10.2004

EN

Official Journal of the European Union

L 325/63

A business whose total turnover is derived from doorstep sales
made by resellers acting in their own name and on their own
account may request the administration for authorisation to
apply the provisions of Articles 2 and 3 below on condition
that:

(a) all products sold by the firm are contained in a pre-estab-
lished price list applicable at the final consumption stage;

apply this special measure shall be liable for the tax payable on
goods supplied by its resellers to final consumers.

Article 3

Any reseller supplied by a business authorised to apply this
special measure shall be exempt
from the obligations laid
down in Article 22 of Sixth Directive 77/388/EEC regarding
goods it supplies to final consumers.

Article 4

(b) the firm sells its products direct to resellers who, in turn,

This Decision is addressed to Portugal.

sell direct to final consumers.

Done at Luxembourg, 21 October 2004.

Article 2

By way of derogation from Article 21(1)(a) of
the Sixth
Directive 77/388/EEC, any firm which has been authorised to

For the Council
The President

G. ZALM