CELEX: 51988PC0099
Language: en
Date: 1988-03-09
Title: PROPOSAL FOR A COUNCIL REGULATION ( ECSC, EEC, EURATOM ) ON THE DEFINITIVE UNIFORM ARRANGEMENTS FOR THE COLLECTION OF VAT OWN RESOURCES

No C 128/4                              Official Journal of the European Communities                               17. 5. 88
                                                               II
                                                       (Preparatory Acts)
                                                  COMMISSION
             Proposal for a Council Regulation (ECSC, EEC, Euratom) on the definitive uniform
                                   arrangements for the collection of VAT own resources
                                                       COM(88) 99 final
                               (Submitted by the Commission to the Council on 11 March 1988)
                                                        (88/C 128/06)
THE COUNCIL OF THE EUROPEAN COMMUNITIES,                          Whereas the revenue method should be chosen as the
                                                                   sole definitive method for determining the VAT
                                                                  resources base, since this method is reliable and already
Having regard to the Treaty establishing the European              applied by most Member States;
Coal and Steel Community, and in particular Article
78h thereof,
                                                                  Whereas the provisions of Regulation (EEC, Euratom,
Having regard to the Treaty establishing the European              ECSC) No 2892/77 may be retained unless they are no
Economic Community, and in particular Article 209                  longer necessary or need to be amended in the light of
thereof,                                                           experience acquired;
Having regard to the Treaty establishing the European
Atomic Energy Community, and in particular Article 183            Whereas amounts of VAT first established as due but
thereof,                                                           subsequently time-barred, written off or waived for
                                                                  whatever reason by the Member States should be re-
                                                                   instated in the VAT revenue from which the VAT own
Having regard to Decision . . . on own resources, and in           resources base is determined;
particular Article . . . thereof,
Having regard to the proposal from the Commission,                Whereas provision should be made for the Commission
                                                                   to examine, in cooperation with the national tax auth-
Having regard to the opinion of the European                       orities, the national procedures for assessing and
Parliament,                                                        recovering VAT and the effectiveness of the VAT
                                                                   control systems applied by the Member States; whereas
                                                                   after this examination the Commission will periodically
Having regard to the opinion of the Court of Auditors,             produce a report on the actual collection of VAT in each
                                                                   Member State,
Whereas pursuant to Article 14 of Council Regulation
(EEC, Euratom, ECSC) No 2892/77 ('), as last amended
by Regulation (ECSC, EEC, Euratom) No 3735/85 (2),                 HAS ADOPTED THIS REGULATION:
that Regulation applies for a transitional period ending
on 31 December 1988;
Whereas the provisions relating to the definitive uniform                                  TITLE I
arrangements for collecting VAT resources and the
detailed rules for giving effect to these arrangements are                             General provisions
to apply from 1 January 1989;
                                                                                           Article 1
                                                                   VAT resources shall be calculated by applying the
                                                                   Community rate, set in accordance with Decision . . . on
 (') OJ No L 336, 17. 12. 1977, p. 8.                              own resources, to the base determined in accordance
 O OJ No L 356, 31. 12. 1985, p. 1.                                with this Regulation.
 ---pagebreak--- 17. 5. 88                              Official Journal of the European Communities                              No C 128/5
                          TITLE II                                If more than one VAT rate is applied in a Member State,
                                                                  the VAT resources base shall be calculated by dividing
                           Scope                                  the total net VAT revenue collected by the weighted
                                                                  average rate of VAT. In this case the Member State shall
                          Article 2                               calculate the weighted average rate, to four decimal
1.     The VAT resources base shall be determined from            places, by the common method defined in Article 4. This
the taxable transactions referred to in Article 2 of              weighted average rate shall be expressed as a percentage.
Council Directive 77/388/EEC ('), with the exception of
transactions exempted pursuant to Articles 13 to 16 of
that Directive.                                                                              Article 4
                                                                  1.    In order to calculate the weighting of the various
2.     For the purposes of applying paragraph 1, the              rates as referred to in Article 3, the Member State shall
following shall be taken into account for determining             break down, by VAT rate applied, all transactions which
VAT resources:                                                    are taxable under its national legislation and which do
                                                                  not entitle the customer to deduction of VAT, account
                                                                  being taken of Article 17 of Directive 77/388/EEC, and
— transactions which, in accordance with Article 28 (2)           consumption on the farm by flat-rate farmers and their
     of Directive 77/388/EEC, are subject to exemption            direct sales to final consumers.
     with refund of the tax paid at the preceding stage,
                                                                  The VAT rates used for the purposes of such calculation
— transactions which Member States continue to subject            shall be those which, in accordance with paragraph 7,
     to tax pursuant to Article 28 (3) (a) of Directive           affect the VAT revenue collected during the year in
     77/388/EEC,                                                  question.
— transactions which Member States continue to
                                                                  Transactions which are subject, pursuant to Article 28
     exempt pursuant to Article 28 (83) (b) of Directive
                                                                  (2) of Directive 77/388/EEC, to exemption with refund
     77/388/EEC,
                                                                  of the tax paid at the preceding stage shall be regarded
                                                                  as taxable transactions subject to a zero rate.
— transactions which are taxed under the right of
     option granted to taxable persons by Member States
     pursuant to Article 28 (3) (c) of Directive                  2.    The breakdown by rate of VAT shall be applied to
     77/388/EEC.                                                  the following categories:
 3.    By way of derogation from paragraph 1, Member              (a) the following categories of transaction, if subject to
 States shall have the option of leaving out of account,               non-deductible VAT:
for the purpose of determining VAT resources, the                      — final consumption of households on the territory
transactions of taxable persons whose annual turnover,                     referred to in Article 3 of Directive 77/388/EEC
 determined in accordance with the rules laid down in                      for the Member State in question, except for the
Article 24 (4) of Directive 77/388/EEC, and annual                         part    covered     by    (b), and    intermediate
 purchases subject to deductible VAT do not exceed                         consumption of private non-profit institutions
 10 000 ECU converted into national currency at the                        and general government,
 average rate for the financial year concerned. Member                 — intermediate consumption of other sectors,
 States may round upwards or downwards, by up to
 10 %, the amounts which result from the conversion.                   — gross-fixed       capital   formation   of    general
                                                                           government,
                                                                       — gross-fixed capital formation of other sectors,
                                                                       — improved and unimproved building land, as
                          TITLE III
                                                                           defined in Article 4 (3) (b) of Directive
                   Method of calculation                                   77/388/EEC,
                                                                       — transactions involving gold other than gold for
                          Article 3                                        industrial use;
 For a given calendar year, and without prejudice to
 Articles 5 and 6, the VAT resources base shall be                 (b) consumption on the farm by flat-rate farmers and
 calculated by dividing the total net VAT revenue                      their direct sales to final consumers.
 collected by a Member State during that year by the rate
 at which VAT is levied during that same year.
                                                                   3.    For the purposes of the breakdown referred to in
                                                                   paragraph 2, transactions by the flat-rate farmers
                                                                   referred to in (b) thereof shall be subject to a rate equi-
 (•) OJ No L 145, 13. 6. 1977, p. 1.                               valent to the charge on inputs.
 ---pagebreak--- No C 128/6                             Official Journal of the European Communities                                  17. 5. 88
4.     The breakdown of transactions by statistical               2.    Each Member State shall deduct from revenue
category shall be effected by means of data taken from            collected an amount corresponding to total input VAT,
national accounts prepared in accordance with the                 with the exception of that relating to consumption on the
European System of Integrated Economic Accounts                   farm and direct sales to final consumers, which flat-rate
(ESA). In order to calculate the VAT own resources base           farmers have not recouped because that Member State
for any given financial year, reference shall be made to          has reduced the flat-rate compensation percentages
the national accounts relating to the last year but one           applicable to transactions carried out by flat-rate farmers
before that financial year.                                       as permitted by Article 25 (3) of Directive 77/388/EEC.
                                                                  The amount of input VAT and the compensated
                                                                  amounts shall be those for the year in question.
A Member State may be      authorized, in accordance with
the procedure provided     for in Article 13, to use data
                                                                  This provision may be applied only if the flat-rate
relating to another year,  which may not be earlier than
                                                                  compensation percentage determined in accordance with
the fifth year before the  financial year in question.
                                                                  Article 25 (3) of Directive 77/388/EEC leaves under-
                                                                  compensation of not less than half a point.
5.     For the purpose of identifying transactions subject
to non-deductible VAT and effecting the breakdown by              3.     For any given year amounts of VAT which become
rate of VAT, Member States may refer to data taken                time-barred, are written off or waived during the year,
from sources complementary to the ESA and capable of              pursuant to national provisions, shall be added to the
being adapted thereto, that is, in the first instance, from       revenue collected by a Member State, with the exception
internal national accounts if they provide the necessary          of amounts which:
breakdown, or, if not, from any other appropriate
source.
                                                                  — could not be recovered despite enforcement action,
6.     In order to determine the weighting of each rate,
Member States shall calculate the relationship between            — were not paid by reason of application of the final
the value of the transactions to which that rate applies              indent of Article 22 (9) of Directive 77/388/EEC.
and the aggregate value of all transactions.
                                                                                             Article 6
7.     Should a Member State amend the VAT rate                    1.    For the purposes of applying Article 2 (1) to trans-
applicable to all or some transactions or the tax                 actions carried out by taxable persons whose annual
treatment for certain transactions in such a way as to            turnover exceeds 10 000 ECU but who are exempted
affect the VAT revenue collected, it shall calculate a new        under Article 24 (2) of Directive 77/388/EEC and to the
weighted average rate. The new weighted average rate              cases referred to in paragraph 2, Member States shall
 shall be applied to the revenue derived from application         determine the VAT resources base from the returns to be
 of the amended rate or tax treatment.                            made by taxable persons in accordance with Article 22 of
                                                                  that Directive or, where there is no return or the return
                                                                  does not contain the necessary information, from appro-
 By way of derogation from the first subparagraph, the            priate data such as other tax returns, professional
 Member State may calculate a single weighted average              accounts or complete statistical series.
 rate. To this end, transactions in respect of which the
 rate or treatment has been changed shall be allocated to
 the old and new rates or to the old and new treatment
                                                                   2.    For the purposes of applying the second, third and
 pro rata temporis, with account being taken of the
                                                                   fourth indents of Article 2 (2):
 average period of time elapsing between entry into force
 of the new rate or treatment and the collection of
 revenue resulting therefrom, calculated over the entire          — with regard to the transactions listed in Annex E to
 year in question. This average period may be rounded to               Directive 77/388/EEC which Member States
 the full month.                                                       continue to tax pursuant to Article 28 (3) (a) of that
                                                                       Directive, Member States shall calculate the VAT
                                                                       resources base as if these transactions were exempted,
                          Article 5
  1.    For the purposes of applying Article 3, each               — with regard to the transactions listed in Annex F to
 Member State shall, if appropriate, add to the revenue                Directive 77/388/EEC which Member States
 collected an amount corresponding to the total VAT                    continue to exempt pursuant to Article 28 (3) (b) of
 which would have been collected but for the application               that Directive, Member States shall calculate the
 of a scheme of graduated tax relief under Article 24 (2)              VAT resources base as if these transactions were
 of Directive 77/388/EEC.                                              taxed,
 ---pagebreak---  17. 5. 88                              Official Journal of the European Communities                               No C 128/7
 — with regard to the transactions referred to in                  the transactions which gave rise to these refunds shall, if
     paragraph     1 (a) of Annex G to Directive                   necessary, be subtracted from the VAT resources base.
     77/38 8/EEC which are taxed under the option given
     to taxable persons by Member States pursuant to
    Article 28 (3) (c) of that Directive, Member States
     shall calculate the VAT resources base as if these
     transactions were exempted.                                                            TITLE IV
                                                                   Provisions relating to accounting and making available of
                                                                                          own resources
 3.    Under the procedure provided for in Article 13, a
Member State may be authorized:                                                             Article 7
                                                                   1.    Before 1 July the Member States shall send the
— either not to take into account in calculating the               Commission a statement of the total amount of the VAT
    VAT resources base:                                            resources base for the previous calendar year, calculated
                                                                  in accordance with Article 3, to which the rate referred
                                                                  to in Article 1 is to be applied.
    (a) one or more of the categories of transactions
         listed in Annexes E, F and G to Directive
         77/388/EEC to which paragraph 2 of this Article
         applies;                                                 2.     The statement shall contain all the data used to
                                                                  determine the base which are required for the control
                                                                  referred to in Article 11. It shall indicate separately the
    (b) the amount corresponding to the tax which                 base resulting from the transactions referred to in
         would have been collected but for the application        Articles 5 and 6 (1) to (4).
         of a scheme of graduated tax relief under Article
         24 (2) of Directive 77/388/EEC,
                                                                  3.    The data to be used to establish the base shall be
— or to calculate the VAT resources base in the cases             the most recent data which exist when the statement is
    referred to in (a) and (b) by using approximate               produced.
    estimates,
                                                                                            Article 8
where precise calculation of the VAT resources base in
these cases would be likely to involve administrative             Member States shall send the Commission by 31 March
burdens which would be unjustified in relation to the             each year an estimate of the VAT resources base for the
effect of the transactions in question on the total VAT           following financial year.
recources base of that Member State.
4.     Where a Member State makes use of the second                                         Article 9
subparagraph of Article 17 (6) and of Article 17 (7) of
Directive 77/388/EEC to restrict the exercise of the              1.    The corrections to the statements referred to in
right to deduct, the VAT own resources base may be                Article 7 (1) for previous financial years shall be made by
determined as if the exercise of the right to deduct had          the Commission in agreement with the Member State.
not been restricted.
                                                                  All the corrections to the statements shall be incor-
The preceding subparagraph shall apply, in relation to            porated in an aggregate statement at 30 June.
the second subparagraph of Article 17 (6) of Directive
77/388/EEC, only in respect of the purchase of
petroleum products and passenger cars used for business
purposes.                                                         If the Member State does not give its agreement, the
                                                                  Commission, after re-examining the matter, shall take
                                                                  whatever measures it considers necessary for correct
                                                                  application of this Regulation.
5.     Where tax refunds are granted by a Member State
pursuant to Article 6 of Council Directive 69/169/EEC
of 28 May 1969 on the harmonization of provisions laid
down by law, regulation or administrative action relating         2.    No further corrections may be made to the annual
to exemption from turnover tax and excise duty on                 statement referred to in Article 7(1) after 30 June of the
imports in international travel ('), the taxable amount of        fourth year following the financial year concerned,
                                                                  unless they concern points previously notified either by
(') OJ No L 133, 4. 6. 1969, p. 6.                                the Commission or by the Member State concerned.
 ---pagebreak---  No C 128/8                             Official Journal of the European Communities                               17. 5. 88
                          TITLE V                                                          Article 12
               Provisions relating to control                      1. The Commission shall examine, with the
                                                                   cooperation of the competent authorities in the Member
                          Article 10                               States, the procedures applied by the Member States for
                                                                   registering taxable persons and determining and
 1. Member States shall inform the Commission by 30                collection VAT, and the effectiveness of their VAT
April of each financial year of the solutions and modifi-          control systems.
cations thereto that they propose to adopt in order to
determine the VAT resources base for each of the
categories of transaction referred to in Articles 5 and
6(1) to (4), indicating, where applicable, the nature of           2. Following this examination the Commission shall
the data which they consider appropriate and an estimate          procedure a report every three years on the actual
of the value of the base for each of these categories of          collection of VAT in each Member State.
transactions.
Within 30 days the Commission shall send the other                 3. The Commission shall present this report to
Member States the information referred to above which             Parliament and the Coucil for the first time by 31
it has received from each Member State.                           December 1991.
2. The Commission shall examine, following the                                            Article 13
procedure laid down in Article 13, the proposed
solutions and modifications.                                       1. The committee referred to in Article 20 of Council
                                                                  Regulation (EEC, Euratom, ECSC) No 2891/77 (2),
                                                                  hereinafter called 'the committee', shall regularly
                                                                  examine, on the initiative of the Commission or at the
                         Article 11
                                                                  request of a Member State, problems arising out of
1. As regards VAT resources, the Commission's                     application of this Regulation.
controls shall be carried out with the competent auth-
orities in the Member States. During these controls, the
Commission shall ensure, in particular, that the oper-
ations to centralize the assessment base and to determine         2. Member States applying for the authorization
the weighted average rate referred to in Articles 3 and 4         provided for in Article 4 (4) or 6 (3) shall refer their
and the total net VAT collected have been performed               application to the Commission as soon as possible and
correctly; it shall also ascertain that the data used were        not later than 30 April of the financial year from which
appropriate and that the calculations made to determine           the authorization is to apply.
the amount of VAT resources resulting from the trans-
actions referred to in Articles 5 and 6 (1) to (4) comply
with this Regulation.                                             The Commission representative shall submit to the
                                                                  committee as soon as possible and not later than
                                                                  31 December of the financial year a draft Decision.
2. Council Regulation (EEC, Euratom, ECSC) No
165/74 of 21 January 1974 determining the powers and
obligations of officials appointed by the Commission
pursuant to Article 14 (5) of Regulation (EEC, Euratom,           3. On the initiative of the Commission or at the
ECSC) No 2/71 O shall apply to VAT resources                      request of a Member State, the committee shall examine
controls. For the purposes of applying Article 5 of that          the solutions referred to in Article 10.
Regulation, is shall be understood that the information
referred to therein may be communicated only to those
persons who, by virtue of their duties in making available        If the committee's examination reveals differences of
and controlling VAT resources, must have knowledge of             opinion as to the solutions envisaged, the Commission
such information.                                                 representative shall submit a draft Decision to the
                                                                  committee as soon as possible and not later than
                                                                   31 December of the financial year from which the
3. Following the controls referred to in paragraph 1,             solution is to apply.
the annual statement for a given financial year shall be
corrected as specified in Article 9.
                                                                   4. The committee shall deliver its opinion on the draft
                                                                   Decisions referred to in paragraphs 2 and 3 within a
O OJ No L 20, 24. 1. 1974, p. 1.                                   O OJ No L 336, 27. 12. 1977, p. 1.
 ---pagebreak--- 17. 5. 88                           Official Journal of the European Communities                           No C 128/9
period which the chairman may lay down according to                                     TITLE VI
the urgency of the matter involved, if necessary, by
taking a vote.                                                                       Final provisions
                                                                                        Article 14
This opinion shall be recorded in the minutes; each            This Regulation shall enter into force on the third day
Member State shall also be entitled to request that its        following its publication in the Official Journal of the
position be recorded in these minutes.                         European Communities.
                                                               It shall apply with effect from 1 January 1989.
The Commission shall take the utmost account of the            It shall not apply, however, to the production or    the
opinion delivered by the committee.                            correction of statements of the VAT resources base   for
                                                               years before 1989 which have been produced            in
                                                               accordance with Regulation (EEC, Euratom, ECSC)      No
                                                               2892/77 which remains in force in respect of         the
5. No later than 60 days after the committee has
                                                               statements concerned.
delivered its opinion, the Commission shall adopt a
Decision which it shall communicate to the Member             This Regulation shall be binding in its entirety and
States.                                                        directly applicable in all Member States.