Opinion of the European Economic and Social Committee on the Proposal for a Council Directive amending Council Directive 2002/38/EC as regards the period of application of the value added tax arrangements applicable to radio and television broadcasting services and certain electronically supplied services COM(2006) 739 final — 2006/0245 (CNS)
Date: 2006-12-13
Institutions: European Economic and Social Committee
Subjects: VAT, broadcasting, electronic commerce, provision of services, tax exemption, television

C 325/2

EN

Official Journal of the European Union

30.12.2006

Opinion of the European Economic and Social Committee on the Proposal for a Council Directive
amending Council Directive 2002/38/EC as regards the period of application of the value added tax
arrangements applicable to radio and television broadcasting services and certain electronically
supplied services

COM(2006) 739 final — 2006/0245 (CNS)

(2006/C 325/02)

On 30 November 2006 the Council decided to consult the European Economic and Social Committee,
under Article 262 of the Treaty establishing the European Community, on the abovementioned proposal.

The Committee Bureau instructed the Section for Economic and Monetary Union and Economic and Social
Cohesion to prepare the Committee's work on the subject.

Given the urgent nature of the work, the European Economic and Social Committee appointed Mr Burani as
rapporteur-general at its 431st plenary session, held on 13-14 December 2006 (meeting of 13 December),
and adopted the following opinion with 102 votes in favour, nem. con. and four abstentions.

1. Introduction

On 7 May 2002 the Council

1.1
adopted Directive
2002/38/EC amending the existing Directive 77/388/EEC which
set up the VAT arrangements. The directive amends the VAT
arrangements applicable to radio and television broadcasting
services and certain electronically supplied services; it contains a
number of provisions which were due to expire on 30 June
2006 unless extended.

1.2 When the directive was enacted, the Council intended to
review the provisions covering the place of supply of these
services and certain facilitation measures for non-EU businesses
within three years, i.e. before the directive expired. On 25 May
2006, the Commission issued a report stressing the effectiveness
of the measures adopted and proposing that they be extended
to 31 December 2008. However, the Council decided on an
extension which runs only until 31 December 2006.

The Commission points out

the
1.3
measures laid down by the directive would have undesirable
effects: in other words, in the absence of new proposals there

the expiry of

that

Brussels, 13 December 2006

would be a gap in the legislation on the matter. Moreover, in
the Commission's view, the slow rate of legislative progress in
the area of
replacement
taxation would mean that new,
measures would not be in place by the end of 2006, and it
therefore reiterates its original proposal that the directive be
extended to 31 December 2008.

2. The Committee's comments

2.1
The Committee takes note of the rationale behind the
Commission's proposal, and considers that for the moment it is
not appropriate to go into the merits of the directive's provi-
sions. Given the urgent need for legislation applicable to the
sector to be in place, and confident that the Commission's asser-
tions regarding the effectiveness of
the directive are well-
founded, the Committee endorses the proposal to extend it.
Furthermore, in view of the lengthy nature of legislative proce-
dures in the area of taxation, the Committee feels that a period
of two years — i.e. until 31 December 2008 — is the strict
minimum and may even be too short for new proposals to be
drawn up on the matter.

The President

of the European Economic and Social Committee

Dimitris DIMITRIADIS