2007/740/EC: Council Decision of 13 November 2007 authorising the Kingdom of the Netherlands to apply a measure derogating from Article 193 of Directive 2006/112/EC on the common system of value added tax
Date: 2007-11-13
Institutions: Council of the European Union
Subjects: Netherlands, VAT, clothing industry, derogation from EU law, subcontracting, tax system

17.11.2007

EN

Official Journal of the European Union

L 300/71

COUNCIL DECISION

of 13 November 2007

authorising the Kingdom of the Netherlands to apply a measure derogating from Article 193 of
Directive 2006/112/EC on the common system of value added tax

(Only the Dutch version is authentic)

(2007/740/EC)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty
Community,

establishing the European

Having regard to Council Directive 2006/112/EC of 28
November 2006 on the common system of value added
tax (1), and in particular Article 395(1) thereof,

Having regard to the proposal from the Commission,

Whereas:

In a letter registered with the Secretariat-General of the
Commission on 24 November 2006, the Kingdom of the
Netherlands requested authorisation to apply a special tax
measure
clothing industry as
previously authorised for a limited period by Council
Decision 1998/20/EC (2).

ready-to-wear

in the

collecting VAT is rendered awkward by the difficulty of
identifying and supervising the activities of
subcon-
tractors. The requested measure is
therefore to be
considered as a measure to prevent certain types of tax
evasion and avoidance in the ready-to-wear clothing
industry.

Since, however,
the location for the manufacture of
ready-to-wear clothes is influenced by low labour costs
and subcontractors relocate easily from one country to
another, the Kingdom of the Netherlands should monitor
and evaluate the impact of these factors on the effec-
tiveness of the derogation and inform the Commission
accordingly.

It is appropriate that the measure be limited in time in
order to allow the Commission to evaluate it on the basis
of
the
the
Netherlands.

report provided by the Kingdom of

The derogation does not have an adverse effect on the
Communities’ own resources accruing from value added
tax nor does it affect the amount of VAT charged at the
final stage of consumption,

(5)

(6)

(7)

accordance with Article

of Directive
395(2)
In
the Commission informed the other
2006/112/EC,
Member States by letter dated 10 July 2007 of
the
request made by the Kingdom of the Netherlands. By
letter dated 17 July 2007, the Commission notified the
Kingdom of the Netherlands that it had all the infor-
the
mation it considered necessary for appraisal of
request.

HAS ADOPTED THIS DECISION:

Article 1

The arrangement would authorise the Kingdom of the
Netherlands
to apply 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
subcontractor to the clothing firm (the contractor).

the Kingdom of

By way of derogation from Article 193 of Directive
2006/112/EC,
is hereby
authorised to apply a scheme until 31 December 2009 in the
ready-to-wear clothing industry for shifting the subcontractor’s
obligation to pay over VAT to the tax authorities from the
subcontractor to the clothing firm (the contractor).

the Netherlands

Article 2

(4)

These arrangements have proved in the past to be an
effective fraud-prevention measure in a sector in which

(1) OJ L 347, 11.12.2006, p. 1. Directive as amended by Directive

2006/138/EC (OJ L 384, 29.12.2006, p. 92).

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

2004/516/EC (OJ L 221, 22.6.2004, p. 17).

By 31 July 2009, the Kingdom of the Netherlands shall submit
a report to the Commission on the overall evaluation of the
operation of the measure concerned, in particular as regards the
effectiveness of the measure and any other evidence of relo-
cations of
clothing
subcontractors
industry to other countries.

ready-to-wear

in the

(1)

(2)

(3)

L 300/72

EN

Official Journal of the European Union

17.11.2007

This Decision is addressed to the Kingdom of the Netherlands.

Article 3

Done at Brussels, 13 November 2007.

For the Council
The President

F. TEIXEIRA DOS SANTOS