CELEX: 51988PC0846
Language: en
Date: 1989-02-03
Title: PROPOSAL FOR A COUNCIL DIRECTIVE SUPPLEMENTING THE COMMON SYSTEM OF VALUE ADDED TAX AND AMENDING ARTICLES 32 AND 28 OF DIRECTIVE 77/388/EEC - SPECIAL ARRANGEMENTS FOR SECOND-HAND GOODS, WORKS OF ART, ANTIQUES AND COLLECTOR' S ITEMS

No C 76/10                              Official Journal of the European Communities                                   28. 3. 89
              Proposal for a Council Directive supplementing the common system of value added tax and
               amending Articles 32 and 28 of Directive 77/388/EEC — Special arrangements for second-hand
                                      goods, works of art, antiques and collector's items
                                                      COM(88) 846 final
                                     (Submitted by the Commission on 11 January 1989)
                                                         (89/C 76/02)
THE COUNCIL OF THE EUROPEAN COMMUNITIES,                           Whereas the aim of the elimination of double taxation and
                                                                   distortion of competition may be achieved by providing for
                                                                   the same system both for the period before and for the
Having regard to the Treaty establishing the European              period after the realization of the single market, which
Economic Community, and in particular Article 99                   would in any event be a simpler solution;
thereof,
                                                                   Whereas, for certain items of a cultural nature, a special
                                                                   measure should be envisaged to promote the conservation
Having regard to the proposal from the Commission,
                                                                   and enrichment of the cultural heritage of the Community,
Having regard to the opinion of the European Parliament,
                                                                   HAS ADOPTED THIS DIRECTIVE:
Having regard to the opinion of the Economic and Social
Committee,
                                                                                              Article 1
Whereas, in accordance with Article 32 of Sixth Council            Directive 77/388/EEC is hereby amended as follows:
Directive 77/388/EEC of 17 May 1977 on the harmoni-
zation of the laws of the Member States relating to turnover
                                                                   1. Article 32 is replaced by the following:
taxes — Common system of value added tax: uniform
basis of assessement (*), as last amended by the Act of
Accession of Spain and Portugal, the Council is to adopt a
Community taxation system to be applied to used goods,
works of art, antiques and collector's items;                                                 'Article 32
                                                                        Special arrangements for second-hand goods, works
Whereas the present situation, in the absence of Com-                           of art, antiques and collector's items
munity legislation, continues to be marked by the
application of very different systems which cause distortion
of competition and deflection of trade both internally and
between Member States; whereas these differences also                                          A. Scope
include a lack of harmonization in the levying of the own
resources of the Community; whereas consequently it is                 1. Member States shall apply value added tax to
necessary to bring this situation to an end as soon as                supplies of second-hand goods, works of art, antiques
possible;                                                             and collector's items, in accordance with the following
                                                                      provisions.
Whereas the Court of Justice has, in a number of
judgments, noted the need to attain a degree of harmoniz-             The special arrangements shall not cover precious
ation which allows double taxation in intra-Community                 metals and precious stones. However, they shall apply
trade to be avoided;                                                  to supplies of objects as referred to in the previous
                                                                      subparagraph made of gold or any other precious metal
                                                                      or containing precious stones, where the value of such
                                                                      materials incorporated does not exceed 50 % of the
Whereas the objective of achieving a single market by
                                                                      selling price of those objects.
31 December 1992 means that Community rules with the
purpose of avoiding as far as possible double taxation and
distortion of competition between taxable persons, must be            2.   For the purposes of this Directive:
adopted before that date;
                                                                      (a) 'second-hand goods' means movable property that
                                                                          has been used and is suitable for further use as it is or
(!) OJ No L 145, 13. 6. 1977, p. 1.                                       after repair, including all means of transport;
 ---pagebreak--- 28. 3. 89                                Official Journal of the European Communities                                No C 76/11
   (b) 'works of art' means the objects listed at 1 in                 consultation provided for in Article 29, take as the
       Annex H, with the exception of those supplied by                taxable amount the difference recorded over each tax
       their creator or his successors in title;                       period between the total amount of supplies before tax
                                                                       and the total amount of purchases after tax. The
                                                                       application of this provision must not have the effect of
                                                                       giving rise to distortions of competition.
   (c) 'collector's items' means the objects listed at 2 of
       Annex H, except when first supplied;
                                                                       2. The taxable dealer shall not have the right to deduct
                                                                       any tax paid at the time of purchase of the goods which
   (d) 'antiques' means the objects listed at 3 of Annex H.            are the subject of supply by him. The tax relating to that
                                                                       supply may not be stated separately on the invoice or
                                                                       any document serving as an invoice.
   3. The special arrangements shall apply to supplies of
   goods as referred to in paragraph 1 where they are
   effected by a taxable person ('taxable dealer') who
   acquires such goods in the course of his business from a                   C. Rules for application to particular goods
   private person or from a taxable person who was not
   entitled to deduct VAT when he acquired them, with a
   view to resale. Any taxable person engaged in the                   For works of art, collector's items and antiques as
   occupation of intermediary shall also be deemed to be a             referred to in A(2) (b) (c) and (d) the following shall also
   taxable dealer if, in accordance with Article 5(4)(c), he           apply:
   dispatches goods as referred to in paragraph 1 under a
   sales or purchase commission contract.
                                                                        (a) by way of derogation from Article 15(1) and (2),
                                                                            supplies of these goods by a taxable dealer shall not
                                                                            be exempt from tax where they are dispatched or
   4. The special arrangements shall not apply to                           transported to a third country;
   supplies of goods by a taxable dealer where he has
   acquired them from a taxable person who has invoiced
   the VAT in accordance with Article 22(3) or where they               (b) by way of derogation from Article 2(2), these goods
   have been imported by a taxable dealer and were subject                  shall be exempt where they are imported from a
   to value added tax on importation.                                       third country by a taxable dealer.
                                                                            However, works of art and collector's items which
   Where his activities lead him to use the normal                          have been exported with exemption from value
   arrangements at the same time as the special arrange-                    added tax during the 36 months preceding their
   ments, the taxable dealer shall keep separate accounts,                  importation by a taxable dealer shall not qualify for
   according to the rules laid down by the Member States,                   exemption from tax on import;
   for operations coming under one or other arrangement.
                                                                        (c) these goods shall be exempt from tax where they are
   Member States may oblige taxable dealers to exercise                     imported by cultural organizations recognized as
   their right to deduction for operations carried out under                such by the Member State concerned under the same
    the normal arrangements only at the moment of supply.                   conditions as those set out under (b) for taxable
                                                                            dealers.
                                                                                                D. Option
                 B. General rules of application
                                                                        Taxable dealers who qualify for the special arrange-
    1. The taxable amount shall be the difference, for each             ments may for each supply to taxable persons opt for
    transaction, between the selling price and the purchase             application of the normal value added tax arrange-
    price. The selling price shall be the price charged by the          ments. In this case the conditions set out under A(4),
    taxable dealer without value added tax. The purchase                second subparagraph, shall apply.'
    price shall be the tax-inclusive price paid by the taxable
    dealer.
                                                                    2. The following paragraph 6 is added to Article 28:
    However, Member States may, in order to simplify the                '6. Until the date of abolition of taxation on
    procedure for levying the tax and subject to the                    importation and remission of tax on exportation in
 ---pagebreak--- No C 76/12                                Official Journal of the European Communities                                          28. 3. 89
  trade between Member States, the latter shall apply the                        VAT and show that it has been paid so that double
  provisions set out below:                                                      taxation can be avoided.'
  (a) By way of derogation from Article 15 (1) and (2), the              3. The Annex hereto is added as Annex H.
      supply by a taxable dealer of goods as referred to in
      Article 32 A(2) shall be taxed, in accordance with
      the provisions of that Article, where those goods are                                           Article 2
      dispatched or transported to another Member State.
                                                                         1. Member States shall take the measures necessary to
  (b)By way of derogation from Article 2(2), goods as
                                                                         comply with this Directive not later than 1 January 1990.
      referred to in Article 32 A(2) shall be exempt where
      they are imported from another Member State by a                   2. Member States shall inform the Commission of the
      taxable dealer of the Member State of importation.                provisions they have adopted for the application of this
  (c) Member States shall apply to the supply of goods as                Directive.
      referred to in Article 32 A(2) a rate equal to that
      applied to the equivalent new goods.
                                                                                                      Article 3
  (d) The invoice supplied by the taxable dealer within the
      meaning of Article 32 B(2) shall state the rate of                 This Directive is addressed to the Member States.
                                                                 ANNEX
                                                               'ANNEX    H
                                       Definitions of works of art, collector's items and antiques
             1. Works of art are those falling within the following categories:
                — paintings, collages and similar decorative plaques, drawings and pastels, executed entirely by hand,
                    other than plans and drawings for architectural, engineering, industrial, commercial, topographical or
                    similar purposes, hand painted or hand decorated manufactured articles, theatrical scenery, studio
                    backcloths or the like of painted canvas,
                — original engravings, prints and lithographs, being impressions produced directly in black and white or in
                    colour of one or of several plates wholly executed by hand by the artist, irrespective of the process or of
                    the material employed by him, but not including any mechanical or photomechanical process,
                — original sculptures and statuary, in any material, but not including mass-produced reproductions as
                    works of conventional craftmanship of a commercial character.
             2. Collector's items are those falling within the following categories:
                — postage or revenue stamps, stamp-postmarks, first-day covers, postal stationery (stamped paper), and
                    the like, used, or if unused not of current or new issue in the country to which they are destined,
                — collections and collector's pieces of zoological, botanical, mineralogical, anatomical, historical,
                    archaeological, palaeontological, ethnographic or numismatic interest.
             3. Antiques are items, other than works of art or collector's items, of an age exceeding 100 years.'