Proposal for a COUNCIL DIRECTIVE amending Directives 2006/112/EC and 2008/118/EC as regards the inclusion of the Italian municipality of Campione d’Italia and the Italian waters of Lake Lugano in the customs territory of the Union and in the territorial application of Directive 2008/118/EC
Date: 2018-05-08
Institutions: Directorate-General for Taxation and Customs Union, European Commission
Subjects: Italy, Lombardy, Switzerland, VAT, customs territory (EU), excise duty, lake, municipality

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   EUROPEAN COMMISSION  Brussels, 8.5.2018 COM(2018) 261 final 2018/0124 (CNS)  Proposal for a COUNCIL DIRECTIVE amending Directives 2006/112/EC and 2008/118/EC as regards the inclusion of the Italian municipality of Campione d’Italia and the Italian waters of Lake Lugano in the customs territory of the Union and in the territorial application of Directive 2008/118/EC  
 
 
EXPLANATORY MEMORANDUM 

1. 

• 

CONTEXT OF THE PROPOSAL 

Reasons for and objectives of the proposal 

At Italy’s request, the Italian municipality of Campione d’Italia and the Italian waters of Lake 
Lugano  should  be  included  in  the  EU  customs  territory  and  in  the  territory  of  the  Union  to 
which  Directive  2008/118/EC  concerning  the  general  arrangements  for  excise  duty1  (the 
‘excise Directive’) applies. The geographic location of the two territories as Italian exclaves 
within  the  territory  of  Switzerland  has  historically  justified  their  exclusion  from  the  EU 
customs  territory  but  Italy  considers  this  exclusion  to  be  no  longer  necessary,  in  particular 
because  otherwise  Switzerland  now  wishes  to  include  them  within  its  customs  territory.  It 
therefore  requests  that  these  two  territories  be  brought  within  the  scope  of  the  EU  customs 
territory and the territory of the Union to which the excise Directive applies.  It is proposed 
that this amendment should apply from 1 January 2019. 

Italy  considers  that  the  inclusion  of  the  Italian  municipality  of  Campione  d’Italia  and  the 
Italian  waters  of  Lake  Lugano  in  the  EU  customs  territory  and  in  the  scope  of  the  excise 
Directive  is  not  incompatible  with  maintaining  the  application  of  a  special  tax  system  on 
value  added  tax  and,  in  particular,  with  continuing  to  exclude  these  territories  from  the 
territorial application of Directive 2006/112/EC on the common system of value added tax  2 
(the ‘VAT Directive’). This  is  essential to  ensure a level playing field with  the surrounding 
Swiss economic context through the application of local indirect taxation in line with Swiss 
value added tax. The inclusion of these territories in the EU customs territory and the territory 
of the Union to which the excise Directive applies therefore only requires a formal change to 
the  VAT  Directive,  moving  them  from  Article  6(2)  (territories  not  forming  part  of  the  EU 
customs  territory  excluded  from  the  territorial  application  of  the  VAT  Directive)  to  Article 
6(1)  (territories  forming  part  of  the  EU  customs  territory  excluded  from  the  territorial 
application of the VAT Directive). 

The  proposal  to  amend  the  excise  Directive  and  the  VAT  Directive  is  strictly  linked  to  the 
amendment of the Union Customs Code. These amendments should therefore apply as from 
the same date. To ensure better management and administrative organisation, Italy pointed out 
that these amendments will have to enter into force on 1 January following their adoption and, 
in any case, not before 1 January 2019. 

• 

Consistency with other Union policies 

Changes  to  the  excise  Directive  and  the  VAT  Directive  are  a  consequence  of  changes  to 
Regulation (EU) No 952/20133 laying down the Union Customs Code. 

2. 

• 

LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY 

Legal basis 

Article 113 of the Treaty on the Functioning of the European Union. This Article provides for 
the Council, acting unanimously in accordance with a special legislative procedure and after 

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3 

Council Directive 2008/118/EC of 16 December 2008 concerning the general arrangements for excise 
duty and repealing Directive 92/12/EEC (OJ L 9, 14.1.2009, p. 12). 
Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax  (OJ L 
347, 11.12.2006, p. 1). 
Regulation (EU) No 952/2013 of the European Parliament and of the Council of 9 October 2013 laying 
down the Union Customs Code (OJ L 269, 10.10.2013, p. 1). 

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consulting  the  European  Parliament  and  the  Economic  and  Social  Committee,  to  adopt 
provisions for the harmonisation of Member States’ rules in the area of indirect taxation. 

• 

Subsidiarity (for non-exclusive competence) 

The  geographical  scope  of  application  of  the  excise  Directive  and  of  the  VAT  Directive  is 
harmonised. Member States may not apply a different geographical scope. 

• 

Proportionality 

The proposed amendment does not go beyond what is necessary to address the issues at stake 
and, in that way, to achieve the Treaty’s objectives of a proper and effective functioning of 
the internal market. 

This proposal complies with the principles of proportionality as set out in Article 5, paragraph 
4 of the Treaty on the European Union.This amendment is based on a political decision of the 
Italian government. It has no impact on other Member States. 

• 

Choice of the instrument 

Council Directive. 

• 

Explanatory documents (for directives) 

The notification of transposition measures by Member States should not be accompanied by 
an explanatory document explaining the relationship between the components of the Directive 
and  the  corresponding  parts  of  national  transposition  instruments  as  the  changes  relate  to  a 
single provision only in both the excise Directive and VAT Directive. 

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2018/0124 (CNS) 

Proposal for a 

COUNCIL DIRECTIVE 

amending Directives 2006/112/EC and 2008/118/EC as regards the inclusion of the 
Italian municipality of Campione d’Italia and the Italian waters of Lake Lugano in the 
customs territory of the Union and in the territorial application of Directive 
2008/118/EC 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 113 thereof, 

Having regard to the proposal from the European Commission, 

After transmission of the draft legislative act to the national parliaments, 
Having regard to the opinion of the European Parliament1, 
Having regard to the opinion of the European Economic and Social Committee2, 

Acting in accordance with a special legislative procedure, 

Whereas: 

(1) 

(2) 

(3) 

1 
2 
3 

4 

5 

In its letter of 18 July 2017, Italy requested that the Italian municipality of Campione 
d’Italia and the Italian waters of Lake Lugano be included in the customs territory of 
the Union as defined in Regulation (EU) No 952/2013 of the European Parliament and 
of the Council3 as well as in the territorial scope of Council Directive 2008/118/EC4 
for  the  purposes  of  excise  duty,  whilst  leaving  these  territories  outside  the  territorial 
scope of Council Directive 2006/112/EC5 for the purposes of value added tax. 

The  Italian  municipality  of  Campione  d'Italia,  an  Italian  exclave  in  the  territory  of 
Switzerland, and the Italian waters of Lake Lugano should be included in the customs 
territory of the Union because the historical reasons justifying the exclusion of these 
territories,  such  as  their  isolation  and  economic  disadvantages,  no  longer  apply.  For 
the  same  reasons  these  territories  should  be  included  in  the  territorial  application  of 
Directive 2008/118/EC. 

However, Italy wants to continue the exclusion of these territories from the territorial 
application  of  Directive  2006/112/EC  on  the  common  system  of  value  added  tax,  as 
this  is  essential  to  maintain  a  level  playing  field  between  economic  operators 
established in Switzerland and in the Italian municipality of Campione d’Italia through 

OJ C , , p. . 
OJ C , , p. . 
Regulation (EU) No 952/2013 of the European Parliament and of the Council of 9 October 2013 laying 
down the Union Customs Code (OJ L 269, 10.10.2013, p. 1). 
Council Directive 2008/118/EC of 16 December 2008 concerning the general arrangements for excise 
duty and repealing Directive 92/12/EEC (OJ L 9, 14.1.2009, p. 12). 
Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax (OJ L 
347, 11.12.2006, p. 1). 

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the application of a local indirect taxation regime in  line with the Swiss value added 
tax system. 

(4) 

The  amendments  to  Directives  2006/112/EC  and  2008/118/EC  are  strictly  linked  to 
the amendment to Regulation (EU) No 952/20136 as regards the territorial scope of the 
customs territory of the Union. Therefore the national transposition measures relating 
to  those  amendments  should  apply  from  the  same  date  as  the  amendment  to 
Regulation (EU) No 952/2013. 

(5) 

Directives 2006/112/EC and 2008/118/EC should therefore be amended accordingly, 

HAS ADOPTED THIS DIRECTIVE: 

Directive 2006/112/EC is amended as follows: 

Article 1 

(1) 

‘(f) 

(g) 

(2) 

In Article 6(1), the following points (f) and (g) are added: 

Campione d’Italia; 

the Italian waters of Lake Lugano.’ 

In Article 6(2), points (f) and (g) are deleted. 

Directive 2008/118/EC is amended as follows: 

(1) 

In Article 5(3), points (f) and (g) are deleted. 

Article 2 

Article 3 

1. 

Member States shall adopt and publish, by 31 December 2018 at the latest, the laws, 
regulations  and  administrative  provisions  necessary  to  comply  with  this  Directive. 
They shall forthwith communicate to the Commission the text of those provisions. 

They shall apply those provisions from 1 January 2019. 

When  Member  States  adopt  those  provisions,  they  shall  contain  a  reference  to  this 
Directive  or  be  accompanied  by  such  a  reference  on  the  occasion  of  their  official 
publication. Member States shall determine how such reference is to be made. 

2. 

Member States shall communicate to the Commission the text of the main provisions 
of national law which they adopt in the field covered by this Directive. 

This Directive shall enter into force on the twentieth day following that of its publication in 
the Official Journal of the European Union. 

Article 4 

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As amended by Regulation (EU) No XXX 

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This Directive is addressed to the Member States. 

Done at Brussels, 

Article 5 

For the Council 
The President 

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