CELEX: 51979PC0695
Language: en
Date: 1979-12-06
Title: PROPOSAL FOR AN ELEVENTH COUNCIL DIRECTIVE ON THE HARMONIZATION OF THE LAWS OF THE (MEMBER STATES RELATING TO TURNOVER TAXES - EXCLUSION OF THE FRENCH OVERSEAS DEPARTMENTS FROM THE SCAPE OF DIRECTIVE 77/388/EEC (presented by the Commission to the Council)

ARCHIVES HISTORIQUES
DE LA COMMISSION
COLLECTION RELIEE DES
DOCUMENTS "COM"
COM (79) 695
Vol. 1979/0237
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In accordance with Council Regulation (EEC, Euratom) No 354/83 of 1 February 1983
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 ---pagebreak--- COMMISSION OF THE EUROPEAN COMMUNITIES
                                          COM(79)695 final
                                          Brussels / 6th December 1979
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                                                 ■V. - : - '.    ,S
                 PROPOSAL FOR AN ELEVENTH COUNCIL DIRECTIVE
           ON THE HARMONIZATION OF THE LAWS OF THE (MEMBER STATES
                 RELATING TO TURNOVER TAXES - EXCLUSION       OF
                  THE FRENCH OVERSEAS DEPARTMENTS FROM THE
                       SCAPE OF DIRECTIVE 77 / 388 / EEC
                (presented by the Commission to the Council )
COM ( 79 ) 695 final
 ---pagebreak---                                EXPLANATORY I " MGRANDUM
              Article 227 ( 2 ) of the EEC Treaty provided that only some of its
provisions were to take effect immediately in the French Overseas departments .
The Council was to determine before 1 January 1960 the conditions under which
the other provisions of the Treaty, including those relating to tax , were to
apply .    Prior to the judgment of the Court of Justice in case 148 / 77 ( Hansen
and Balle . V.Hauptzollamt Flensburg ) delivered on 10 October 1978, the two-year
period referred to in Article 227 ( 2 ) was not interpreted as a strict time
limit . Accordingly , where no Council decision had been adopted , a Treaty
provision could not , by implication , be applied to the overseas departments ^
              This was the interpretation accepted by the Council when adopting .
the Sixth VAT Directive ( 1 ) on 17 May 1977 .        In this case such an interpreta-v
tion is clear from the work carried out within the relevant Council Working
Party and is to be found in particular in document T / 494/ 76(JUR ) (f in ) of
10 June 1976 .
              Since Article 3 ( 1 ) of the Dire --., we , 'dealing with territorial ,
application , contained a reference to Article 227 of the Treaty for defining
the territory of the country of each Member Sts              it was unnecessary there­
fore to include in Article 3 ( 2 ), as requested c \         he French delegation , the
 French overseas departments among the national territories excluded from the
scope of the VAT .
                                   '  .              -y
              The Court of Justice , setting aside the earlier interpretation ,
held in the abovementioned case that after the expiry of the two-year period
provided for in Article 227 ( 2 ) the provisions of the Treaty and secondary
law apply automatically to the overseas territories , while acknowledging ,
however , that " in order to make due allowance for the special geographic ,
economic and social situation of those departments ", provisions could be
 ( 1 ) 0J n» L 145 of 13 June 1977
 ---pagebreak---                                       - 2 -
adopted after the expiry of the two-year period commensurate to      the specific
requirements of those parts of the French territories ".
             The situation referred to by the Court in its judgment of 10 Oc­
tober 1978 was in essence the reason for the Council 's decision not to include
the overseas departments in the scope of the Sixth Directive .
             The Court 's interpretation of Article 227 of the Treaty therefore
requires , if the Council 's wishes    expressed when adopting the Sixth Direc­
tive are to be observed , an amendment of Article 3 ( 2 ) of the directive by .  ,
adding the French overseas departments to the list of national territories
excluded from the scope of the common system of value added tax .
             This amendment does not however amount to an amendment of the
substance of the directive .    Since it is a purely formal one the proposed
amendment may therefore take effect on the date of entry into force of .the
                                                                     *
Sixth Directive , which was postponed until 1 January 1979 by the . Ninth
       s
Council Directive of 26 June 1978 < 1 ).
( 1 ) 0J n° L 194 of 19 July 1978, p. 16
 ---pagebreak---              Proposal for an Eleventh Council Directive on the harmonization
             of the laws of the Member States relating to turnover taxes -
             Exclusion of the French overseas departments from the scope of
                               Directive 77 / 388 / EEC
THE COUNCIL OF THE EUROPEAN COMMUNITIES ,
Having regard to the Treaty establishing the European Economic Community ,
and in particular paragraph 2 of Article 227 thereof ,
Having regard to the proposal from the Commission ,
jhereas the provisions of the EEC Treaty and secondary legislation apply
in the French overseas departments unless a decision is taken by the Commu­
nity institutions adopting measures particularly suited to the economic and
social conditions of those departments ;
Whereas for reasons connected with their geographic , . economi c and social
situation , the French overseas departments should be excluded from the scope
of the common system of value added tax , as established by Council Directive
77/ 388/ EEC 1 ,
HAS ADOPTED THIS DIRECTIVE      :
                                    Article 1
               A fourth indent as follows is added, to Article 3 ( 2 ) of Directive
77 / 388 / EEC :                                        ;
" - Republic of France :        '
      The overseas departments ".
                      ,             Article 2
               This Directive shall apply with effect from 1 January 1979 .
                                    Article 3
               This Directive is addressed to the Member States .
      OJ n° L 145 of 13 June 1977