CELEX: 51992PC0448
Language: en
Date: 1992-11-04
Title: PROPOSAL FOR A COUNCIL DIRECTIVE AMENDING DIRECTIVE 77/388/EEC AND INTRODUCING SIMPLIFICATION MEASURES

COMMISSION OF THE EUROPEAN COMMUNITIES
                                 C0M(92) 448 final
                                 Brussels, 4  November 1992
                   PROPOSAL FOR A
                  COUNCIL DIRECTIVE
           AMENDING DIRECTIVE 77/388/EEC
     AND INTRODUCING SIMPLIFICATION MEASURES
             (presented by the Commission)
 ---pagebreak---  ---pagebreak---                       EXPLANATORY MEMORANDUM
I.  INTRODUCTION
Council    Directive    91/680/EEC   of   16    December    1991 (-1)
supplemented, with a view to completing the intentai market,
the common system of value added tax with tla provisions
necessary Co: the abolition of all the checks and formalities
that now have to be carried out when an internal frontier of
the Conuaunity is crossed: on 1 January 1993, the concepts of
Importation and exportation will be definitively abolished for
all transactions between Member States and will be limited
solely to trade with third territories.       The Directive also
^ntroducas transitional arrangements for taxation of intra-
Communifcy trade: for a limited period and by way of derogation
from ; lie principle of taxation in the Member State of origin
o£    the. goods     or    services   supplied,    intra*-Community
transactions - essentially transactions carried out between
taxable: traders - will be subject to the tax at the rates and
on v.he conditions obtaining in the Member State of destination
of the goods and services supplied. Major changes have thus
been made to the sixth Directive (77/388/EEC).*2' In order to
facilitate implementation on 1 January 1993, it is appropriate
to refine and expand some of these new provisions.
The common purpose of the additional measures which are the
SUDjact of this proposal is to simplify taxation procedures,
for both traders and Member States' administrations, without
altering the principles of taxation and the rules for
declaring taxable transactions laid down by the Directive of
16 December 1991. Five sets of provisions are proposed.
First, these additional measures clarify the wording of some
of the provisions of the sixth Directive, as amended by
Directive 91/680/EEC.
Simplification measures are also introduced for the tax
treatment of transactions effected with third territories
under the common system of value added tax but relating to
goods which rank as Community goods under customs legislation.
The proposed simplifications relate to both the presentation
of the principles of taxation and the application to these
1 OJ No L 376 of 31 December 1991.
2 OJ No L 145 of 13 June 1977, p. 1.
 ---pagebreak--- transactions of the same tax provisions as those applicable
to any non-Community goods entering the customs territory of
the Community.
For intra-Community trade in products subject to excise
duty, the rules for the imposition of value added tax are
adapted to the provisions of Directive 92/12/EEC of 25
February 1992*3' on the general arrangements for products
subject to excise duty and on the holding, movement and
monitoring of such products. These new measures obviate the
need for traders who are not subject to the general
arrangements for taxing their intra-Community acquisitions
to be identified for VAT purposes solely because they buy
products subject to excise duty from other Kember States «
The procedures introduced for the purpose of applying axcise
duties are used for the purpose of applying VAT.        This
results not only in an easing of the obligations regarding
declarations to which traders are subject but also in ac
reduction    of    the    burden    facing    Member States
administrations in connection with VAT identifications.
For supplies of goods and services'4' taxable within a
Member State on the territory of which the trader is not
established, the present text of the sixth Directive imposes
obligations which differ depending on the Member State in
which these transactions are effected. The purpose of the
new proposals is to guarantee that these transactions are
treated in the same way whatever the Member State concerned
To this end, the provisions relating to the parson liable
for payment of the tax are amended: the principles set out
in Directive 77/388/EEC are confirmed but it is proposed
that the provisions which at present are only options,
available to each Member State, under Article 21(1)(a) apply
throughout the Community. Traders can thus choose between
one of the following arrangements: either they designate a
tax representative who will fulfil on their behalf the
obligations incumbent on all persons liable for payment of
VAT, or the person for whom the goods or services are
supplied is designated as the person liable for payment of
the tax. In the latter case, it would thus be possible for
the taxable supplier not to have to be identified for VAT
purposes in a Member State where he is not established.
The last set of additional measures relates to the
changeover from the provisions in force until 31 December
1992 to those which will enter into force on 1 January 1993.
They concern all transactions which give rise to a movement
of goods between Member States and which, although they
began before 1 January 1993, i.e. under cover of an
3 OJ No L 76 of 23 March 1992.
4 Other than supplies of services referred to in Article
   21(1)(b).
 ---pagebreak--- import/export procedure, will not be completed until after
31 December 1992, when the concepts of importation and
exportation will have disappeared for the Community's
internal regime.    Without extra common measures ensuring
this changeover, such transactions could         result in
definitive situations of either double taxation or non-
taxation, thereby creating distortions of treatment within
the Community.
II.  PRESENTATION OF EACH OF THE PROVISIONS OF ARTICLE 1
Point 1
In view of the amendments made to the definition of
importation of goods (see point 2), Article 3(4) has been
made more explicit so as to avoid any risk of confusion with
regard to the treatment applicable to transactivons effected
with the Principality of Monaco or the Isle of Man, due
regard being had to the conventions and treaties applicable
to them.
Point 2
The definition of importation of goods is expanded so as to
take account of all transactions with territories within
which the common system of value added tax is not applied,
irrespective of the way in which these transactions are
treated   and  classified   under the Community      customs
provisions.
Point 3
The first subparagraph of Article 7(3) can, by definition,
relate only to goods from third countries which are placed
under a customs regime involving suspension of the import
duties to which they are subject. Only points (a), (b), (c)
and (d) of Article 16(1)(B) refer to these arrangements.
The second amendment concerns the provisions applicable to
goods which, while ranking as Community goods under customs
legislation, must give rise to the charging of VAT as
imports in that they come from territories within which the
common system of value added tax is not applied (parts of
the territory of the Member States to which the tax
provisions of the Treaty establishing the European Economic
Community do not apply or which are excluded from the
territorial coverage of the sixth Directive; territories -
or parts of the territory - of countries which are not
members of the Community but are included in its customs
territory).
 ---pagebreak--- The new wording makes it possible to ensure more effectively
that these transactions are covered by the same provisions
as apply to any non-Community goods temporarily admitted to
the Community's customs territory. This combines in one and
the samr subparagraph provisions which at present appear in
articles 14 and 33a.     This amendment represents a major
simplification of the principles and rules for applying VAT
to these transactions and, at the same time, makes the legal
text less cumbersome (see points 7 and 24) .
Point 4
Since the present definition of the place of supply in
relation to goods supplied on board ships, aircraft or
trains during intra-Community transport could give rise to
confusion, it has been amended in order to clarify the
transactions to which the provision applies.
Point 5
The purpose of the amendment is to confirm that, at
importation, the value for customs purposes is used to
determine the taxable amount for VAT purposes, including
imports of goods from territories which, while forming part
of the customs territory of the Community, are third
territories in the common VAT system.
Point 6
This amendment is merely an adjustment reflecting the new
wording of Article 10(3).
Point 7
This amendment follows from point 3.
Point 8
This amendment, which follows the logic of the completion of
the internal market, adapts the exemptions on exportation
solely to relations with third countries or territories.
Points 9, io and 11
The text proposed under these points is a rearrangement of
the provisions which currently appear in the second
subparagraph of Article 28a(1)(a).     The purpose of these
amendments is twofold:       (i) to simplify the text by
distinguishing between    the definition of acquisitions on
which tax is not to be charged and the provisions relating
to the determination and operation of the threshold at which
this derogation applies, and (ii) with regard to taxable
acquisitions, to make a clear distinction between those to
which the general scheme applies and those covered by
 ---pagebreak---                                                             5 e.
special schemes (acquisitions of products subject to excise
duty and of new means of transport made by traders "below
the threshold", acquisitions of new means of transport by
individuals) . A new paragraph la sets out the conditions
governing the derogation from the principle of taxation of
all acquisitions made by a trader. In addition, within this
new paragraph, a distinction is made between the actual
conditions for application of the derogation and the
information to be taken into account in determining the
threshold at which the derogation applies. These drafting
changes also make it possible to confine the obligation of
identification for VAT purposes solely to traders who are,
automatically or by choice, covered by the general scheme
for the taxation of acquisitions, thereby excluding traders
taxable at destination solely in respect of acquisitions of
products subject to excise duty. These amendments explain
the provisions presented in points 13 and 21.
Point 12
This provision supplements the simplification measures
adopted in respect of the person liable for payment of the
ta             tax and allows them to be effectively implemented
taxable person makes in a Member State in which he is not
established an intra-Community acquisition of goods for the
purposes of a supply within that Member State.
Point 13
Because traders who are taxable solely in respect of
acquisitions of products subject to excise duty are no
longer required to be identified for VAT purposes, it was
necessary to amend the conditions under which such
purchasers may receive the products exempt of the tax due in
the Member State from which the goods are dispatched or
transported. The wording of new point (c) of Article 28c(A)
now refers directly to the formalities laid down by
Directive 92/13/EEC with regard to the movement of products
subject to excise duty.       These provisions thus enable
traders, and Member States' administrations, to make use of
the obligations laid down with regard to excise duties for
the purposes of applying VAT.
Point (d) added to Article 28c(A) clarifies and adapts the
exemptions provided for under (a) , (b) and (c) to cases of
transfers of goods treated as supplies effected for
consideration.
Point 14
This rearrangement of Title E is designed to clarify the
conditions under which the exemptions that Member States
implement pursuant to Article 16(1) or (2) also apply to
intra-Community trade.
 ---pagebreak---                                                              6 r.
Points 15 and 16
These provisions define the moment at which the tax becomes
chargeable for both intra-Community acquisitions of goods
and intra-Community supplies of goods effected exempt of
VAT.
Points 17 and 18
Additions are made to the references to Article 11
concerning the elements to be taken into account in
establishing the taxable amount, in particular for intra-
Community transfers of goods on which the tax is chargeable.
For acquisitions of products subject to excise duty affected
outside the duty-suspension regime, a new provision is
introduced which reduces the taxable amount where the person
acquiring the goods obtains a refund of the excise duties
paid in the Member State in which the products are released
for consumption.
Point 19
During the period in which the transitional arrangements for
taxing trade between Member States apply, the tax due or
paid in one Member State may not be deducted In another
Member State; it may be refunded only under the conditions
laid down in Article 17(3) and (4)« Article 17(4) b-s h&en
expanded in order to guarantee this right to a refund in the
case of traders who purchase goods or services in, or import
goods into, a Member State in which they are not themselves
liable to tax.    In order to avoid certain forms of tax
evasion or avoidance, the benefit of these provisions does
not, however, extend to supplies of goods transported to
another Member State by or on behalf of the person acquiring
the goods.
Point 20
The purpose of the amendments made to Article 21(1)(a) is to
make it possible throughout the Community for caxable
persons not established in the Member State in which they
effect   taxable    transactions   to   designate    a   tax
representative or the person for whom the transaction is
effected as the person liable for payment of the tax, As a
result of this provision, such traders' obligations
regarding declarations can be eased without any dilution of
the principles adopted with regard to the definition of
transactions subject to VAT and the place of taxation of
such transactions.    Nevertheless, this option should not
permit an individual to be designated as the person liable
for payment of the tax.
 ---pagebreak---                                                             7 &.
Similarly, with respect to supplies of services for which
the transitional arrangements alter the place of taxation,
the customer may not be the person liable for payment of the
tax unless he is a taxable person or a non-taxable legal
person identified for VAT purposes.
Point 21
The purpose of these amendments is to ensure that any trader
covered by the      general scheme for taxation of intra
Community   acquisitions   of   goods   is   given   a   VAT
identification number and is thus able to receive from
another Member State goods exempt from the tax due in that
other Member State.
The amendment to Article 22(11) follows from points 9, 10
and 11.
Point 22
Traders not established within a Member State do not qualify
for the tax exemption under Article 24(2) in order to ensure
that no limitation is imposed on their right to deduct input
tax which they exercise in the Member State in which they
are established.
Point 23
Article 28n implements the measures necessary for the
changeover from the provisions in force until 31 December
1992 to those which will enter into force on 1 January 1993.
However, VAT will not have been charged on certain
importations of goods effected prior to 1 January 1993: for
example, in the case of goods placed under a transit or
temporary importation regime, the chargeable event for the
tax on importation would have been deferred until the goods
were removed from that régime t in accordance with the
provisions in force before 1 January 1993, These provisions
concern not only goods imported from third countries, but
also intra-Community trade. So as to avoid a hiatus in the
conditions governing the taxation of these transactions, the
benefit of the provisions in force prior to 1 January 1993
i» prolonged until the goods are removed from these
"suspensive" regimes (paragraph 1) , At the same time, and
in order to avoid situations of non-taxation, paragraph 2
treats the removal from these regimes as an importation of
goods in accordance with the provisions applicable with
effect from 1 January 1993, while paragraph 3 defines the
place where this importation takes place.
 ---pagebreak---                                                              8 H
These provisions ensure that transactions effected in
similar conditions do receive equivalent treatment.      All
importations of goods from other Member States, by
definition effected before 1 January 1993, are taxed in the
same way, whether or not the chargeable event giving rise to
the tax has been deferred.     As for importations of goods
from third countries effected before 1 January 1993 but not
yet taxed at that date, the same provisions apply as if they
had been effected after 31 December 1992: these goods are
deemed not to have entered the Community until the moment at
which the regime under which they were placed in 1992 - or
before - comes to an end.     Consequently, Article 7(3) can
be applied to them.
Paragraph 2 also treats the end of certain internal
Community transit operations in the same way as an
importation of goods.      This treatment is nevertheless
subject to several limitations. First, it applies only to
transit operations initiated for the purposes of a supply of
taxable goods effected prior to 1 January 1993. Any supply
of goods effected after 31 December 1992 by a taxable person
is automatically covered by the transitional arrangements
for the taxation of trade between Member States.          In
addition, such treatment applies only to supplies of goods
which have qualified, or are eligible, for an exemption in
the Member State from which the transport leaves, by virtue
of the fact that the goods are being exported to another
Member State.       This restriction consequently avoids
situations of double taxation.
By way of derogation from these principles of taxation,
special measures are taken so that the tax is not charged in
cases where goods are re-exported outside the Community or
redispatched to the Member State from which they were
temporarily exported. These measures also apply to means of
transport (i) where these have been acquired or imported in
accordance with the general conditions of taxation in force
on the domestic market of a Member State, (ii) where they
were first put into service before 1 January 1988, or
(iii) where the amount of the tax due is insignificant.
These special measures make for considerable simplification
of the rules for taxing means of transport which are placed
under a national VAT-exempt temporary importation regime
prior to 1 January 1993 and which are not removed from this
regime by 31 December 1992.
Point 24
This amendment follows from the provisions added to Article
7(3).
 ---pagebreak---                                                                                           <M
                                     Proposal for a
                                 COUNCIL DffiECTTVE
                              amending Directive 77/388/EEC
                         and introducing simplification measures
THE COUNCIL OF THE EUROPEAN COMMUNITIES,
Having regard to the Treaty establishing the European Economic Community, and in
particular Article 99 thereof,
Having regard to the proposal from the Commission,
Having regard to the opinion of the European Parliament,
Having regard to the opinion of the Economic and Social Committee,
Whereas Article 3 of Directive 91/680/EEC* amending the Sixth Directive
77/388/EEC of 17 May 19772 sets 1 January 1993 as the date of the entry into force
of these provision in all the Member States;
Whereas in order to facilitate the application of these provisions and to introduce the
simplifications needed, it is necessary to complete the common system of value added
tax, as applicable on 1 January 1993, so as to clarify how the tax shall apply to certain
operations carried out with third territories and certain operations carried out inside
the Community, as well to define the transitional measures between the provisions in
force on 31 December 1992 and those which will enter into force on 1 January 1993;
^ J No L 376 of 31.12. 1991
2
  OJ No L 145 of 13.6.1977, p 1
 ---pagebreak---                                                                              2i-
Whereas in order to guarantee the neutrality of the common system of value added tax
in respect of the origin of goods the concept of a third territory and the definition of
an import must be completed;
Whereas goods which for customs purposes do not satisfy the conditions laid down in
Articles 9 and 10 of the Treaty and to which customs duty suspension arrangements
also apply in respect of value added tax, remain subject to the specific value added tax
rules when leaving the duty suspension arrangements; whereas for reasons of
transparency it would appear necessary to specify the application of this principle;
Whereas it is necessary to state the definition of the place of taxation of goods sold on
board a vessel, aircraft or train carrying out a movement inside the Community;
Whereas the transitional regime of taxation of trade between the Member States must
be completed to take account both of the Community provisions relating to excise
duties and the need to clarify and simplify the modalities of the application of the tax
to certain operations carried out between the Member States as from 1 January 1993;
 ---pagebreak--- Whereas Directive 92/12/EEC1 of 25 February 1992 on the general arrangements for
products subject to excise duty and on the holding, movement and monitoring of such
products lays down the procedures and obligations in relation to declarations
particular to the shipment of such products to another Member State; whereas as a
result the method of applying tax to certain supplies and intra-Community acquisitions
of products liable to excise duties can be simplified to the benefit both of the persons
liable to pay tax and the competent administrations;
Whereas it is necessary to define the field of application of the exemptions referred to
in Article 28c; whereas it is also necessary to add to the provisions concerning the
chargeability of the tax and the means for determining the taxable amount of certain
intra-Community operations;
Whereas for the taxable operations in the domestic market which are carried out
during the period laid down in Article 281 by taxable persons not established in that
country, other than supplies of services for which the user is liable, it is necessary to
guarantee an equivalent treatment in all the Member States; whereas to achieve this it
is necessary that the provisions concerning the person liable to tax are harmonised and
that all the Member States apply the normal regime of taxation to these operations;
whereas these provisions allow, under certain conditions, to simplify taxation of intra-
Community acquisitions of goods made in the Member State referred to in Article
28b(A)(l);
 1
   OJ No L 76 of 23.3.92
 ---pagebreak--- Whereas in order to take account of the provisions relating to the person liable to pay
tax in the domestic market and to avoid certain forms of fiscal fraud or evasion, it is
necessary to lay down the Community provisions concerning the repayment of the tax
to taxable persons not resident in the country referred to in Article 17(3) as modified
by Article 28f;
Whereas the suppression as from 1 January 1993 of taxation at import and détaxation
at export for trade between the Member States makes it necessary to have transitional
measures in order to assure the neutrality of the common system of value added tax
and to avoid situations of double-taxation or non-taxation;
Whereas consequently it is necessary to lay down special provisions for the case
where a Community procedure, started before 1 January 1993 for the purposes of a
supply effected before that date by a taxable person acting as such in respect of goods
dispatched or transported to another Member State, is not completed until after 31
December 1992;
Whereas these provisions should also apply to taxable operations made before 1
January 1993 to which particular exemptions were applied which as a result delayed
the taxable event;
Whereas it is also necessary to lay down special measures for means of transport
which, not having been acquired or imported subject to the general domestic tax
conditions of a Member State, have benefited, by the application of national
measures, from an exemption from tax because of their temporary import from
another Member State;
 ---pagebreak--- Whereas the application of these transitional measures, both in relation to trade
between the Member States and operations with third territories, supposes the
finalising of the definition of the operations to be submitted to taxation as from 1
January 1993 and to lay down for them the concepts of the place of taxation, the
taxable event and the chargeability of the tax,
Whereas it is accordingly necessary to amend Directive 77/388/EEC,
HAS ADOPTED THIS DIRECTIVE:
 ---pagebreak---                                           Article 1
Directive 77/388/EEC is hereby amended as follows:
(1) Article 3 (4) shall be replaced by the following:
H
  4. By way of derogation from paragraph 1, in view of the conventions and treaties
     applicable to them, the Principality of Monaco and the Isle of Man shall not be
     treated as third territories.
     Member States shall take the measures necessary to ensure that transactions
     originating in or intended for:
     -the Principality of Monaco are treated as transactions originating in or intended
       for the French Republic,
     -the Isle of Man are treated as transactions originating in or intended for the United
       Kingdom of Great Britain and Northern Ireland."
(2) Article 7(l)(b) shall be replaced by the following:
     "(b) the entry into the Community of goods from a third territory, other than the
       goods covered by (a)."
(3) In Article 7(3):
   • first sub-paragraph add "(a),(b), (c) and (d)H after "Article 16(1)(B)";
 ---pagebreak---       second sub-paragraph, the expression "under a temporary import regime in
      exemption from value added tax or" shall be added after the expression "on
      entry into the Community,";
      the following sub-paragraph shall be added
       "For the application of the second sub-paragraph, "a temporary import regime
       with exemption from VAT" refers to Directive 85/362/EEC 0) as well as to
       the customs regime of temporary importation in total exemption to import
       duties which the goods could have benefited from if they had been imported
       within the meaning of paragraph 1(a).
       (!) OJ No L 192 of 24.7.85, p 20'
(4) Article 8(l)(c) shall be replaced by the following:
"(c) in the case where the supply is made to passengers on board a ship, aircraft or
   train during an intra-Community transport of passengers: at the place of the
   departure of the transport. In the case of a return trip, the return leg is considered
   to be a seperate transport.
   For the purposes of applying this provision:
     •    "intra-Community transport of passengers" shall mean any transport of
          passengers where the place of departure and the point of arrival are situated
          on the territory of different Member States;
 ---pagebreak---       •  "the place of departure of an intra-Community transport of passengers" shall
         mean the first point of passenger embarkation foreseen within the
         Community;
     •   "the point of arrival of an intra-Community transport of passengers" shall
         mean the last point of disembarkation of passengers foreseen within the
         Community
(5) Article 11(B)(1) shall be replaced by the following:
  "1. The taxable amount shall be the value for customs purposes, determined in
     accordance with the Community provisions in force, this shall also apply for the
     import of goods referred to in Article 7(l)(b)."
(6) Article 12(l)(b) shall be replaced by the following:
  "(b) In the cases provided for in the second and third sub-paragraphs of Article
     10(3), the rate applicable shall be that in force at the time when the tax becomes
     chargeable.",
(7) Article 14(l)(c) shall be deleted.
(8) In Article 15 point 2 "The supply of goods dispatched or transported to a
   destination outside the Community by on behalf of a purchaser not established
   within the territory of the country" shall be replaced by "The supply of goods
   dispatched or transported to a destination outside the Community by on behalf of
   a purchaser not established within the Community",
 ---pagebreak--- (9) Article 28a(l)(a) second sub-paragraph shall be replaced by the following:
      "By way of derogation from the first sub-paragraph intra-Community
     acquisitions of goods made under the conditions set out in paragraph la by a
     taxable person or non-taxable legal person shall not be subject to value added
      tax;"
(10) In Article 28a (1) a new point (c) shall be added as follows;
    "(c) The intra-Community acquisition of goods which are subject to excise duties
        effected for consideration within the territory of the country by a taxable
        person, or a non-taxable legal person, who qualifies for the derogation referred
        to in point (a) second sub-paragraph, and for which the excise duties become
        chargeable within the territory of the country pursuant to Directive
        92/12/EEC<1).
   (*)OJNoL24of23.3.1992'
  (11) In Article 28a the following paragraph shall be inserted:
  "(la) The derogation provided for in the second sub-paragraph of paragraph 1(a)
     applies to intra-Community acquisitions of goods effected:
 » by a taxable person who is eligible for the flat rate scheme provided for in
      Article 25, by a taxable person who carries out only supplies of goods or
      services in respect of which value added tax is not deductible, or by a non-
      taxable legal person,
 ---pagebreak---                                                                               10
       •   for a total amount not exceeding, during the current calendar year, a threshold
           which the Member States shall determine but which may not be less than the
          equivalent in national currency of ECU 10 000,
       and
       •   provided that the total amount of intra-Community acquisitions of goods did
          not, during the previous calendar year, exceed the threshold referred to in the
           second indent.
          The threshold which serves as the reference for the application of the above
           shall consist of the total amount, exclusive of value added tax due or paid in the
          Member State from which the goods are dispatched or transported, of intra-
           Community acquisitions of goods other than new means of transport and other
           than goods subject to excise duty."
(12) In Article 28b A(2) the following sub-paragraph shall be added:
  " For the application of the first sub-paragraph, the intra-Community acquisition of
   goods is deemed to have been subject to tax in the Member State of arrival of the
   dispatch or transport of the goods insofar as the person acquiring the goods establishes
   that he has made a subsequent taxable supply in that Member State for which the
   purchaser has been designated liable for the tax due. "
 ---pagebreak---                                                                               11
(13) In Article 28c (A):
        • point (c) shall be replaced by the following:
              "(c) the supply of goods subject to excise duty dispatched or transported to
                   the purchaser, by the vendor, by the purchaser or on his behalf, outside
                   the territory referred to in Article 3 but inside the Community, effected
                   for taxable persons or non-taxable legal persons who qualify for the
                  derogation set out in Article 28a(l)(a) second sub-paragraph, when the
                  dispatch or transport of the goods is carried out in conformity with
                   Article 7(4) and (5), or Article 16 of Directive 92/12/EEC.
                  This exemption shall not apply to supplies of goods subject to excise
                   duty effected by taxable persons who benefit from the exemption from
                   tax set out in Article 24";
               •   the following shall be added:
                      "(d) the supply of goods, in the sense of Article 28a(5)(b), which
                           benefit from the exemptions set out above if they have been made
                           on behalf of another taxable person. "
 ---pagebreak---                                                                         12
    14) Article 28c(E) shall be replaced by the following:
         "E. Other Exemptions
         (1) The following paragraph shall be added to Article 16:
         "(la) When they take up the option provided for in paragraph 1, the Member
             States shall take the measures necessary in order to ensure that the intra-
             Community acquisitions of goods placed under one of the regimes or in
             one of the situations foreseen in Article 16(1)(B) benefit from the same
             provisions as supplies of goods carried out within the territory of the
             country under the same conditions."
(2) In Article 16(2):
•    -"intra-Community acquisitions of goods made by a taxable person and" shall be
     added after "may opt to exempt" and "outside the Community" shall be added
     after "export them";
•    -the following sub-paragraphs shall be added:
     "When they take up this option the Member States shall, subject to the
     consultation provided for in Article 29, extend the benefit of this exemption to
     intra-Community acquisitions of goods by a taxable person, imports for and
     supplies of goods to a taxable person intending to supply them, as they are or
     after processing, under the conditions laid down in Article 28c(A), as well as
     supplies of services relating to such supplies, up to a maximum equal to the
     value of his supplies of goods effected under the conditions laid down in Article
     28c(A) during the preceding 12 months.
 ---pagebreak---                                                                       13
    The Member States may set a unique maximum amount for transactions which
    they exempt under the previous sub-paragraphs."
(15) Article 28d(3) shall be replaced by the following:
        "(3) By way of derogation from paragraph 2, tax shall become chargeable on
            the issue of the invoice provided for in Article 22(3)(a) first sub-
            paragraph where the invoice is issued to the person acquiring the goods
            after the date of the taxable event but before the 15th day of the month
            following that during which the taxable event occurs."
(16) In Article 28d(4) second sub-paragraph "after the date of the taxable event but"
    shall be added after "the invoke is issued".
 ---pagebreak---                                                                        14
(17) In Article 28e(l);
    -first sub-paragraph, the second sentence shall be replaced by:
             "In particular, in the case of the intra-Community acquisition of goods
             referred to in Article 28a(6), the taxable amount shall be determined in
             accordance with Article 11 (A)(1)(b),(2) and (3)."
    -second sub-paragraph, the following sentence shall be added:
             "When, after the moment the intra-Community acquisition of goods was
             effected, the acquirer obtains the refund of excise duties paid in the
             Member State from which the goods were dispatched or transported, the
             taxable amount shall be reduced accordingly in the Member State where
             the acquisition took place. "
 (18) In Article 28e paragraphs(2) and (3) shall be renumbered (3) and (4) and a
        new paragraph (2) shall be inserted as follows:
      "(2) For the supply of goods referred to in Article 28d(A)(d), the taxable
         amount shall be determined in accordance with Article 11(A)(1)(b), (2) and
         (3)."
 ---pagebreak---                                                                      15
(19)The following sub-paragraph shall be added to Article 17(4) as modified by
   Article 28f:
    "For the application of the above:
        (a) the taxable persons referred to in Article 1 of Directive 79/1072/EEC
           shall also be considered for the application of the said Directive as
           taxable persons who are not established in the country when, inside the
           territory of the country, they only carry out supplies of goods and
           services to a person who has been designated as the person liable to pay
           the tax in accordance with Article 21(l)(a),
        (b) the taxable persons referred to in Article 1 of Directive 86/560/EEC
           shall also be considered for the application of the said Directive as
           taxable persons who are not established in the Community when, inside
           the territory of the country, they only carry out supplies of goods and
           services to a person who has been designated as the person liable to pay
           the tax in accordance with Article 21(l)(a),
        (c) Directives 79/1072/EEC and 86/560/EEC shall not apply to supplies of
           goods which are, or may be exempted under Article 28c(A) when the
           goods supplied are dispatched or transported by the acquirer or for his
           account."
 ---pagebreak---                                                                         16
(20) In Article 28g:
  .— Article 21(l)(a) shall be replaced by the following:
   "(a) taxable persons who carry out taxable transactions other than supplies of
      services referred to in (b).
      Where the taxable supply of goods or services is effected by a taxable person
      not established in the country :
         -the Member States shall authorise this taxable person to designate another
           taxable person, or a non taxable legal entity, established or identified for
           value added tax purposes in that country as liable for the tax. A tax
           representative or the person for whom the taxable transaction was carried
           out may be designated for this purpose;
         -if this designation is not made the Member States may take measures to
           ensure that the tax is payable by another taxable person, or a non taxable
           legal entity, established or identified for value added tax purposes in that
           country. Inter alia a tax representative or the person for whom the
           taxable transaction was carried out may be designated for this purpose.
  Member States may also provide that someone other than the taxable person
  shall be held jointly and severally liable for payment of the tax;"
 ---pagebreak---                                                                       17
- Article 21(l)(b) shall be replaced by the following;
"(b) persons to whom services covered by Article 9(2)(e) are supplied, or
persons, identified for value added tax purposes in the country, to whom
services referred to in Article 28b (C),(D) or (E) are supplied, when the service
is carried out by a taxable person established abroad; however, Member States
may require that the supplier of the service shall be held jointly and severally
liable for payment of the tax;"
~ Article 21(l)(d) shall be replaced by the following:
"(d) any person effecting a taxable intra-Community acquisition of goods.
Where an intra-Community acquisition of goods is effected by a taxable person
or a non-taxable person established abroad:
     - the Member States shall authorise this person to designate another taxable
        person, or non taxable legal entity, established or identified for value
         added tax purposes in that country as liable for the tax. A tax
        representative may be designated as that other person;
     - if this designation is not made, the Member States may take measures to
         ensure that the tax is payable by another taxable person, or a non taxable
         legal entity, established or identified for value added tax purposes in that
         country. Inter alia a tax representative may be designated for this
        purpose.
 ---pagebreak---                                                                         18
   Member States may also provide that someone other than the person who has
   carried out the intra-Community acquisition shall be held jointly and severally
   liable for payment of the tax;"
(21) In Article 28h:
      — in Article 22(l)(c) first indent "and other than a supply of goods or
         services to a person who has been designated as the person liable for the
         tax in accordance with Article 21(l)(a)" shall be added after "in
         accordance with Article 21(l)(b)";
- in Article 22(l)(c) the following indent shall be inserted after the second indent:
        "-every taxable person who, within the territory of the country, effects
           intra-Community acquisitions of goods for the purposes of his operations
           relating to the economic activities referred to in Article 4(2) carried out
           abroad,"
~ in Article 22(11) the following shall be added at the start of the
  paragraph:
          "In the case of intra-Community acquisitions of products subject to
           excise duty referred to in Article 28a(l)(c) as well as"
 ---pagebreak---  (22) Article 23? shall be replaced by the following:
                                    "Article 28i
   Special scheme for small undertakings
   The following sub-paragraph shall be added to Article 24(3):
   "In all circumstances supplies of new means of transport effected under
     the conditions laid down in Article 28c (A) as well as supplies of goods
     and services effected by a taxable person who is not established in the
     territory of the country shall be excluded from the exemption from tax
     under paragraph 2."
(23) The following Article shall be added:
                                   "Article 28n
 Transitional measures
  1. When goods:
           —entered the territory of the country within the meaning of Article
            3 before 1 January 1993,
           and
           —were placed, on entry into the territory of that country, under one
            of the arrangements referred to in Article 14(l)(b) or (c), or
            under one of the regimes referred to under Article 16(1)(A),
 ---pagebreak---                                                                           20
               and
               —have not left this regime before 1 January 1993,
                 the provisions in force at the moment the goods were placed
                 under that regime shall continue to apply for the period, as
                 determined by those provisions, the goods remain under that
                 regime.
2. The following shall be deemed to be an import within the meaning of Article
 7(1):
      (a) the removal, including irregular removal, of goods from the regime
         referred to in Articlel4(l)(c) under which the goods were placed before
         1 January 1993 under the conditions set out in paragraph 1;
      (b) the removal, including irregular removal, of goods from the regime
         referred to in Article 16(1)(A) under which the goods were placed before
         1 January 1993 under the conditions set out in paragraph 1;
     (c) the termination of a Community internal transit operation started before
         1 January 1993 in the Community for the purpose of the supply of goods
         for consideration made before 1 January 1993 in the Community by a
         taxable person acting as such,
     (d) the termination of an external Community transit operation started
         before 1 January 1993;
 ---pagebreak---                                                                       21
(e) any irregularity or offence committed during a Community internal
   transit operation entered into under the conditions set out in (c)) or any
   Community external transit operation referred to in (d).
3. In the cases referred to in paragraph 2, the place of import, in the
   meaning of Article 7(2), shall be the Member State within the territory
   of which the goods cease to be covered by the regime under which they
   were placed before 1 January 1993.
4. By derogation to Article 10(3), the import of the goods in the sense of
   paragraph 2 shall terminate without the occurrence of chargeable event
   when:
          (a) the imported goods are dispatched or transported outside the
            Community within the meaning of Article 3;
          or
          (b) the imported goods, within the meaning of paragraph 2(a), are
            other than a means of transport and are dispatched or transported
            to the Member State from which they were exported and to the
            person who exported them;
           or
           (c) the imported goods, within the meaning of paragraph 2(a), are
             means of transport which were acquired or imported, before 1
             January 1993 in accordance with the general conditions of
             taxation in force on the domestic market of a Member State,
             within the meaning of Article 3, and/or have not been subject by
             reason of their exportation to any exemption from or refund of
             VAT.
 ---pagebreak---                                                                 22
    This condition is deemed to be fulfilled when the date of the first
    use of the means of transport was before 1 January 1988 or when
    the amount of tax due because of the importation is insignificant.
  (24) The third indent of Article 33a (l)(b) shall be deleted.
                                Article 2
  1. The Member States shall bring into force such laws, regulations
     and administrative provisions as are necessary to conform with
     this Directive on 1 January 1993.
 2. Member States shall inform the Commission of the provisions
     which they adopt to apply this Directive.
 3. Member States shall communicate to the Commission the texts
     of the provisions of national law which they adopt in the field
     governed by this Directive.
4. When Member States adopt such measures they shall include a
   reference to this Directive or shall accompany them by such a
   reference on the occasion of their official publication. The
   manner in which such references shall be made shall be laid down
   by the Member States.
 ---pagebreak---                                                                 23
                                    Article 3
This Directive is addressed to the Member States.
Done at Brussels,
                                                  For the Council
                                                  The President
 ---pagebreak---                                                           ÎA -
        STATEMENT OF IMPACT ON SMEs AND EMPLOYMENT
Council Directive 91/680/EEC of 16 December 1991
supplemented, with a view to completing the internal
market, the common sustem of value added tax with the
provisions necessary for the abolition of the fiscal
frontiers.   Major changes have thus been made to the
sixth VAT Directive (77/388/EEC). In order to facilitate
implementation on 1 January 1993, it is appropriate to
refine and expand some of these new provisions.
This is purpose of this Directive. Therefore, the impact
on SMEs of the proposed Directive is identical to that
set out in the proposal for a Directive on the removal of
fiscal frontiers (see statements of impact annexed to the
documents COM(87)S22 final/2 and COM(90) 182 final).
                    FINANCIAL STATEMENT
Application of this Directive       will not   affect the
Community's own ressources.
 ---pagebreak---  ---pagebreak---                                             ïï.
                                                                     ISSN 0254-1475
                                                              COM (92) 448 final
                                                      DOCUMENTS
                                                                                09
                                 Catalogue number : CB-CO-92-466-EN-C
                                                             ISBN 92-77-48692-9
Office for Official Publications of the European Communities
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