Proposal for a Council Decision Authorising the Federal Republic of Germany and the Kingdom of the Netherlands to apply a measure derogating from article 3 of the Sixth Council Directive 77/388/EEC on the harmonisation of the laws of the Member States relating to turnover taxes
Date: 2005-04-04
Institutions: European Commission
Subjects: Netherlands, VAT, approximation of laws, derogation from EU law, engineering structure, urban infrastructure

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 4.4.2005 
COM(2005) 109 final 

Proposal for a 

COUNCIL DECISION 

Authorising the Federal Republic of Germany and the Kingdom of the Netherlands to 
apply a measure derogating from article 3 of the Sixth Council Directive 77/388/EEC on 
the harmonisation of the laws of the Member States relating to turnover taxes 

(presented by the Commission) 

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EXPLANATORY MEMORANDUM 

Pursuant to Article 27(1) of the Sixth Council Directive 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 assessment1 -, the Council, acting unanimously on a proposal from the 
Commission, may authorise any Member State to introduce special measures for derogation 
from that Directive in order to simplify the procedure for charging the tax.  

By letters registered with the Secretariat-General of the Commission on 14 October 2004 and 
27 October 2004, the Federal Republic of Germany and the Kingdom of the Netherlands have 
requested authorisation to introduce such a special measure. In accordance with Article 27(2) 
of the Sixth Council Directive, the Commission informed the other Member States by letter 
on  11  January  2005  of  the  request  made  and  by  letters  dated  14  January  2005,  the 
Commission notified the Federal Republic of Germany and the Kingdom of the Netherlands 
that it had all the information it considered necessary for appraisal of the request. 

The special measure requested concerns the arrangements for taxing the construction, repair 
and renovation work of a cross-border bridge over the Rodebach between Selfkant (north of 
Millen, Germany) and Echt-Susteren (north of Sittard, the Netherlands). 

In this respect, the German and the Dutch authorities have agreed, concerning VAT, to regard 
the cross-border bridge and its construction site as being on the territory of Germany. 

In accordance with the common system of VAT, taxable transactions are subject to VAT in 
Germany  when  effected  within  the  territory  of  Germany  and  subject  to  VAT  in  the 
Netherlands when effected within the territory of the Netherlands. This would mean that for 
every  transaction  in  connection  with  the  construction,  repair  or  renovation  of  the  bridge,  it 
would have to be established whether it had been effected in Germany or the Netherlands. For 
transactions covering both countries, an apportionment would have to be made. 

The requesting States consider that application of these rules would make the procedure for 
charging the tax very complicated. 

The Commission agrees that the uniform taxation of the works, instead of the application of 
the normal rules, would simplify matters for the contractors in charge of the works concerned. 

Furthermore,  the  proposed  measure  would  not  have  an  adverse  impact  on  the  Community's 
VAT own resources. 

The Commission therefore considers it appropriate for the Federal Republic of Germany and 
the Kingdom of the Netherlands to be authorised to apply the planned special measure. 

1 

OJ L 145, 13.6.1977, p. 1. Directive last amended by Directive 2004/66/EC (OJ L 168, 1.5.2004, p. 35). 

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Proposal for a 

COUNCIL DECISION 

Authorising the Federal Republic of Germany and the Kingdom of the Netherlands to 
apply a measure derogating from article 3 of the Sixth Council Directive 77/388/EEC on 
the harmonisation of the laws of the Member States relating to turnover taxes 

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty establishing the European Community, 

Having regard to Council Directive 77/388/EEC of 17 May 1977 on the harmonization of the 
laws of the Member States relating to turnover taxes – Common system of value added tax: 
uniform basis of assessment2, and in particular Article 27(1) thereof, 

Having regard to the proposal from the Commission3, 

Whereas: 

(1) 

(2) 

(3) 

Under  article  27(1)  of  the  Sixth  Directive,  the  Council,  acting  unanimously  on 
proposal from the Commission, may authorise any Member State to introduce special 
measures for derogation from the provisions of that Directive, in order to simplify the 
procedure for charging the tax. 

By  letters  registered  with  the  Secretariat-General  of  the  Commission  on  14  October 
2004 and 27 October 2004, the Federal Republic of Germany and the Kingdom of the 
Netherlands  have  requested  authorisation  to  introduce  a  special  measure  concerning 
the  construction,  repair  and  renovation  of  a  cross-border  bridge  over  the  Rodebach 
between Selfkant (north of Millen, Germany) and Echt-Susteren (north of Sittard, the 
Netherlands). 

In accordance with article 27(2) of Directive 77/388/EEC, the Commission informed 
the other Member States by letter dated 11 January 2005 of the request made by the 
Federal Republic of Germany and the Kingdom of the Netherlands. By letters dated 14 
January  2005,  the  Commission  notified  the  Federal  Republic  of  Germany  and  the 
Kingdom of the Netherlands that it had all the information it considered necessary for 
appraisal of the request.  

(4) 

For supplies of goods and services, for intra-Community acquisitions and for imports 
of goods intended for the construction, repair and renovation of the bridge, the purpose 
of  the  special  measure  is  to  regard  the  entire  construction  site  of  the  cross-border 

2 
3 

OJ L 145, 13.6.1977, p. 1. Directive last amended by Directive 2004/66/EC (OJ L 168, 1.5.2004, p. 35). 
OJ C , , p. . 

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bridge and, after its completion, the cross-border bridge itself as being on the territory 
of Germany. 

In  absence  of  a  special  measure,  for  each  supply  of  goods  and  services  used  for  the 
construction, repair or renovation of the bridge in question, it would be necessary to 
ascertain  whether  the  place  of  taxation  was  the  Federal  Republic  of  Germany  or  the 
Kingdom  of  the  Netherlands,  which  would  in  practice  be  very  complicated  for  the 
contractors in charge of the works concerned.  

The purpose of this derogation is to simplify the procedure for charging the tax on the 
construction, repair or renovation of the bridge in question. 

The  derogation  will  have  no  negative  impact  on  the  Community's  own  resources 
provided from VAT. 

(5) 

(6) 

(7) 

HAS ADOPTED THIS DECISION:  

Article 1 

By  way  of  derogation  from  Article  3  of  Directive  77/388/EEC,  the  Federal  Republic  of 
Germany and the Kingdom of the Netherlands are hereby authorised, in respect of supplies of 
goods  or  services,  intra-Community  acquisitions  and  imports  of  goods  intended  for  the 
construction,  repair  or  renovation  of  the  cross-border  bridge  over  the  Rodebach  between 
Selfkant (north of Millen, Germany) and Echt-Susteren (north of Sittard, the Netherlands), to 
regard  the  entire  construction  site  of  the  cross-border  bridge  and,  after  its  completion,  the 
cross-border bridge itself as being on German territory. 

Article 2 

This  Decision  is  addressed  to  the  Federal  Republic  of  Germany  and  the  Kingdom  of  the 
Netherlands. 

Done at Brussels, 

For the Council 
The President  

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