CELEX: 51977PC0735
Language: en
Date: 1977-12-23
Title: PROPOSAL FOR A SEVENTH COUNCIL DIRECTIVE ON THE HARMONIZATION OF THE LAWS OF THE MEMBER STATES RELATING TO TURNOVER TAXES - COMMON SYSTEM OF VALUE ADDED TAX TO BE APPLIED TO WORKS OF ART, COLLECTORS' ITEMS, ANTIQUES AND USED GOODS

No C 26/2                            Official Journal of the European Communities                                 1.2. 78
                                                            II
                                                    (Preparatory Acts)
                                               COMMISSION
              Proposal for a seventh Council Directive on the harmonization of the laws of the
              Member States relating to turnover taxes — common system of value added tax to be
                           applied to works of art, collectors' items, antiques and used goods
                          (Submitted by the Commission to the Council on 11 January 1978)
THE COUNCIL OF THE EUROPEAN COMMUNITIES,                          Whereas application of the normal tax scheme to
                                                                  works of art, antiques, collectors' items and used
Having regard to the Treaty establishing the                      goods would give rise to difficulties; whereas, in the
European Economic Community, and in particular                    absence of special rules, a finished item reintroduced
 Articles 99 and 100 thereof,                                     into the economic circuit would once again be fully
                                                                  subject to value added tax and the taxable person
                                                                  wishing to resell the item be unable to deduct the tax
Having regard to the proposal from the Commission,                included in the item's purchase price;
Having regard to the opinion of the European                      Whereas, for practical reasons, if the items in
Parliament,                                                       question were supplied by a private person, value
                                                                  added tax could not be chargeable; whereas the
Having regard to the opinion of the Economic and                  resulting difference in the tax burden would be an
Social Committee,                                                 inducement to bypass ordinary commercial channels;
Whereas, under Article 32 of the Sixth Council                    Whereas, in order to remedy these drawbacks, special
Directive 77/388/EEC of 17 May 1977 on the                        Community schemes are needed for works of art,
harmonization of the laws of the Member States                    antiques, collectors' items and used goods,
relating to turnover taxes — common system of
value added tax: uniform basis of assessment (*), the
Council must adopt a Community taxation system to                 HAS ADOPTED THIS DIRECTIVE:
be applied to works of art, antiques, collectors' items
and used goods; whereas this system should avoid
deflection of trade within the Community, and ensure                                       Article 1
that the application of the Community rate to such
transactions produces equitable results in all Member                             Introductory provisions
States, for the purposes of the Community's own
resources;
                                                                  By way of derogation from Articles 11 (A), 17, 18
                                                                  and 28 of Directive 77/388/EEC, Member States shall
(!) OJ N o L 145, 13. 6. 1977, p. 1.                             apply value added tax in accordance with the
 ---pagebreak--- 1. 2. 78                                    Official J o u r n a l of the E u r o p e a n Communities                                 N o C 26/3
following Articles to supplies of w o r k s of art,                                  precious stones, where the value of such materials
antiques, collectors' items and used goods, where                                     incorporated therein does not exceed 50 % of the
they are effected by taxable persons, w h o acquire such                              selling price of those items.
items with a view to their resale and to transfers of
such items where they are carried out by persons
                                                                               5.       T h e following shall not be deductible:
exercising an intermediate function of whatever kind.
                                                                               — tax paid at the time of the acquisition of the items
For the purposes of this Directive, 'a taxable person
                                                                                     referred to in p a r a g r a p h 1,
wishing to resell' shall mean any person w h o in the
course of business carries out one of the activities
                                                                               — tax paid by a taxable person wishing to resell at
referred to in the preceding paragraph.
                                                                                     the time of acquisition of goods and services used
                                                                                     for the purposes of this activity.
T a x a b l e persons covered by the special scheme
provided for in his Directive may, in accordance with
the procedures laid d o w n by each M e m b e r State, opt                     6.       Where the items referred to in p a r a g r a p h 1 are
for application of the n o r m a l scheme for value added                      imported by a taxable person wishing to resell, 70 %
tax.                                                                           of the a m o u n t of the value added tax paid at the time
                                                                               of importation shall be deductible. T h e right t o
                                                                               deduct shall be exercised only when the t a x in respect
This Directive shall not preclude the application of
                                                                               of the supply of the item effected by the taxable
the other provisions of Directive 77/388/EEC, and in
                                                                               person wishing to resell becomes chargeable.
particular those of Article 15 (1) and (2) and
Article 24.
                                                                               7.       Where the items purchased or imported w i t h a
                                                                               view to resale are dispatched or transported outside
                                                                               the territory referred to in Article 3 of Directive
                               Article 2                                       77/388/EEC, the taxable person wishing to resell
                                                                               shall be entitled to deduct the value added t a x due or
                                                                               paid at the time of acquisition or importation. T h e
Scheme        for  works      of art, collectors'     items        and         right to deduct shall be exercised only w h e n the
                               antiques                                        export formalities have been completed.
1.      For the purposes of this Directive:
— 'works of art' shall mean works as defined in                                                              Article 3
     headings N o 99.01, N o 99.02 and N o 99.03 of the
     C o m m o n C u s t o m s Tariff,
                                                                                                   Scheme for used goods
— 'collectors'         items'       shall   mean      items         of
     archaeological, historical, ethnographic, palaeon-
                                                                               1.       For the purposes of this Directive, 'used goods'
     tological, zoological, botanical, mineralogical,
                                                                               shall mean movable property other t h a n t h a t referred
     numismatic and philatelic interest, intended for a
                                                                               to in Article 2 that has been used and is suitable for
     collection,
                                                                               re-use as it is or after repair.
— 'antiques' shall mean all items other than w o r k s
     of art and collectors' items of an age exceeding                          2.       T h e taxable a m o u n t in respect of supplies of
     100 years.                                                                used goods other than those referred to in Article 4
                                                                               shall be 30 % of the selling price where the supply is
2.      M e m b e r States shall exempt supplies and                           effected by a taxable person wishing to resell w h o
     imports of w o r k s of art effected by the artist                        acquired the item in question f r o m a n o n - t a x a b l e
     himself.                                                                  person or f r o m a taxable person not entitled to
                                                                               deduct value added tax at the time of acquisition of
3.      T h e taxable a m o u n t in respect of supplies of                    that item.
     w o r k s of art, collectors' items and antiques
     effected by a taxable person wishing to resell shall                      3.       T h e scheme provided for in p a r a g r a p h 2 may, at
     be 30 % of the selling price.                                             the option of the taxable person wishing to resell,
                                                                               apply, in accordance with the procedures laid d o w n
4.      This scheme shall also apply to supplies of the                        by each M e m b e r State, to supplies of used goods
     items referred to in p a r a g r a p h 1 and m a d e of gold              acquired f r o m other taxable persons. T h e option
     or any other precious metal or containing                                 shall cover all such transactions.
 ---pagebreak--- N o C 26/4                           Official Journal of the European Communities                                  1. 2. 78
4.    This scheme shall not apply to supplies of used           — the item       was    acquired   from   a   non-taxable
goods made of gold or any other precious metal or                   person,
containing precious stones.
                                                                — the item, acquired from a taxable person, is
                                                                     excluded from the right to deduct provided for in
5.    Value added tax invoiced    to the taxable  person
                                                                     Article 17 of Directive 77/388/EEC.
wishing to resell at the time     of acquisition   of the
goods and services used for        the purposes    of his
transactions taxed under this      scheme shall   not be        3.     The right to deduct provided for in paragraph 2
deductible.                                                     shall arise when the tax in respect of the supply of
                                                                the item by the taxable person wishing to resell
Where, however, goods acquired with a view to                   becomes chargeable. The amount deductible may not
resale are dispatched or transported outside the                exceed four-fifths of the amount of tax due on resale.
territory referred to in Article 3 of Directive
77/388/EEC, the taxable person shall be entitled to             4.     Where the goods referred to in paragraph 1 are
deduct the value added tax due or paid at the time of           dispatched or transported outside the territory
acquisition of those goods. The right to deduct shall           referred to in Article 3 of Directive 77/388/EEC, the
be exercised only when the export formalities have              amount of tax deductible may not exceed four-fifths
been completed.                                                 of the amount of tax calculated on the basis of the
                                                                value declared for the purposes of exportation. The
                                                                right to deduct shall be exercised only when the
                                                                export formalities have been completed.
                        Article 4
                                                                5.    Upon importation of the goods referred to in
              Scheme for certain used goods                     paragraph 1, the tax paid in respect of that event
                                                                shall entitle the taxable person wishing to resell to
                                                                carry out the deduction provided for in Article 17 of
1.    For the purposes of this Directive:
                                                                Directive 77/388/EEC when the tax in respect of the
— 'private cars' shall mean motor road vehicles used            supply of the item by that taxable person becomes
    for the transport of persons, with a seating                chargeable or when the export formalities have been
    capacity of not more than eight in addition to the          completed.
    driver,
— 'trailers' shall mean any trailer hauled by a
    private car, including caravans but excluding                                        Article 5
    mobile homes,
                                                                                     Final provisions
— 'motor-cycles' shall mean motor-cycles, with or
    without side-cars and cycles fitted with an
                                                                1.     Member States shall bring into force the
    auxiliary motor; side-cars for motor-cycles,
                                                                provisions necessary in order to comply with this
— 'private aircraft' shall mean aircraft, whether or            Directive within three months of its notification and
    not fitted with an engine, not used for a taxable           shall forthwith inform the Commission thereof.
    activity,
                                                                2.     Member      States    shall   transmit    to     the
— 'pleasure vessels' shall mean pleasure boats and
                                                                Commission the texts of any fundamental provisions
    other pleasure craft, whether or not fitted with a
                                                                of national law which they subsequently adopt in the
    motor, not used for a taxable activity.
                                                                field covered by this Directive.
2.    Supply of an item referred to in paragraph 1 by
a taxable person wishing to resell entitles him to
deduct an amount of value added tax calculated on                                        Article 6
the basis of the acquisition price of that item at the
rate in force at the time of acquisition, where:                This Directive is addressed to the Member States.