CELEX: 51978PC0177
Language: en
Date: 1978-04-28
Title: Proposal for a COUNCIL DIRECTIVE amending the Directive 77/799/EEC concerning mutual assistance by the competent authorities of the Member States in the field of direct taxation (submitted to the Council by the Commission)

ARCHIVES HISTORIQUES
DE LA COMMISSION
COLLECTION RELIEE DES
DOCUMENTS "COM"
COM (78) 177
Vol. 1978/0058
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 ---pagebreak--- COMMISSION OF THE EUROPEAN COMMUNITIES
                                                 COM(78)177 final
 i                                                                        N
                                                 Brussels , 28 April 1978
                              Proposal for a
                             COUNCIL DIRECTIVE
   amending the Directive 77/799/EEC concerning mutual assistance
          by the competent authorities of the Member States
                      in the field of direct taxation      V
              ( submitted to the Council "by the Commission)
COM(78 ) 177 final
 ---pagebreak---                                EXPLANATORY MEMORANDUM
               On 10 February 1975 ( 1 ), the Council adopted a resolution on the
measures to be taken by the Community as regards taxes on income or profits in
order to combat international tax evasion and avoidance .
               On 19 December 1977 , the Council took its first practical step in this
direction by adopting a Directive concerning mutual assistance by the competent
authorities of the Member States in the field of direct           taxation ( 2 ).
               The case for adoption of this measure is also sound in respect of
indirect taxes in general .       However , a nuiriber of factors suggest that Community
action with regard to VAT is a particularly urgent need .
               For one thing , the information received by the Commission from the
Member States shows that there is much illegal practice involving this tax in inter'
national trade , including fraudulent importation and the use of false export
invoices .
                                                      1 .
               Secondly , the implementation of certain provisions of the . sixth VAT
Directive ( 77 / 388 / EEC ), particularly those concerning the location of the supply
of services ( Articles 9 and 26 ) and tax deduction for transactions effected abroad
( Article 17(4 )), makes it highly desirable that there should be close cooperation
between     national tax administrations in order to ensure that VAT is properly
charged and that all cases of non-taxation or double taxation are avoided .
( 1 ) OJ N° C 35 of 14.2.1975 , p. 1
( 2 ) OJ N° L 336 of 27.12.1977 , p. 15
                                                                       m
 ---pagebreak---                                  - ά -
              Because a part of the Community own    resources is to accrue from
VAT , fraud or the non-col Lect ion of this tax may entail losses not only for the
budgets of Member States , but also for the Community budget , so that the drive
to eliminate evasion and avoidance in this field will in future constitute a
direct Community interest .
              Thirdly , closer cooperation between national authorities with regard
co VAT will make it easier , by means of the cross-checks it will allow , to assess
taxes on income and profits accurately .    Such cooperation will therefore be an
extremely useful addition to the mutual assistance procedure already adopted by
the Council with regard to direct taxes .
              A scheme for mutual assistance between the tax administrations of the
Member States in the VAT field is , for the above reasons , clearly needed without
delay .  For this purpose , certain technical changes to the arrangements of the
Directive of 19 December 1977 oh direct taxes , are all that is necessary .
 ---pagebreak--- Proposal for a Council Directive amending the Directive 77/799/EEC concerning
mutual assistance "by the competent authorities of the Member States in the
                          field of direct taxation
THE COUNCIL OP THE EUROPEAN COMMUNITIES ,
Having regard to the Treaty establishing the European Economic Community , and
in particular Article 100 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 , as a rule , practices of tax evasion and tax avoidance lead to budget-
losses and violations of the principle of fair taxation , and jeopardize sound
competition , thereby affecting the operation of the common market ;
Whereas , in order to combat these practices more effectively , cooperation between
tax administrations within the Comrunity should be strengthened in accordance
with common principles and rules ;
Whereas , on 19 December 1977 , the Council adopted Directive 77/799/SEC concerning
mutual assistance by the competent authorities of the Member States in the field
                    1
of direct taxation ; whereas such mutual assistance arrangements should also cover-
indirect taxes , not only in order to ensure that these are correctly assessed and
collected , but also in order to make the measures taken with regard to direct
taxes more effective ;
Whereas , as a matter of particular urgency , mutual assistance must be extended to
cover VAT , both because it is a general tax on consumption and "because it plays an
important part in the Community 's own resources ;
 0J No L 336 . 27.12.1977 , p. 15
 ---pagebreak--- Whereas the provisions of Directive 77/799/EEC are also suitable for VAT ,
subject to certain amendments and additions ; whereas it is therefore
appropriate to extend the scope of this Directive ,
                                                                        I
KAS ADOPTED THIS DIRECTIVE î
                                     Article 1
Directive 77/ 799/ EEC is hereby amended as follows :
1.     The title shall read : "Council Directive of 19 December 1977 concerning
mutual assistance by the competent authorities of the Member States in the fields
of direct taxation and value added tax".
2.     In Article 1 ,
       (a) the following words are added at the end of paragraph 1s
            "... and of value added tax ."
       (b ) as regards the United Kingdom , the following alteration is made in
paragraph 5 :
            " in the United Kingdom : The Commissioners of Inland Revenue and of
             Customs and Excise or an authorized representative ."
3.      The following subparagraph (f ) is added to Article 4 ( 1 ) s
        "(f ) as regards value added tax , the competent authority of the one
               Member State has grounds for supposing that in the context of intra-
               Community transactions VAT due is being reduced or unjustifiably
               refunded or that fiscal provisions are not being applied in the
               other Member State ."
                                     Article 2
This Directive is addressed to the Member States .