CELEX: 51987PC0321
Language: en
Date: 1987-08-21
Title: PROPOSAL FOR A COUNCIL DIRECTIVE SUPPLEMENTING THE COMMON SYSTEM OF VALUE ADDED TAX AND AMENDING DIRECTIVE 77/388/EEC - APPROXIMATION OF VAT RATES - (presented by the Commission)

ARCHIVES HISTORIQUES
DE LA COMMISSION
COLLECTION RELIEE DES
DOCUMENTS "COM"
COM (87) 321
Vol. 1987/0189
 ---pagebreak--- Disclaimer
Conformément au règlement (CEE, Euratom) n° 354/83 du Conseil du 1er février 1983 concernant
l'ouverture au public des archives historiques de la Communauté économique européenne et de
la Communauté européenne de l'énergie atomique (JO L 43 du 15.2.1983, p. 1) modifié en dernier
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In accordance with Council Regulation (EEC, Euratom) No 354/83 of 1 February 1983 concerning
the opening to the public of the historical archives of the European Economic Community and the
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In Übereinstimmung mit der Verordnung (EWG, Euratom) Nr. 354/83 des Rates vom 1. Februar
1983 über die Freigabe der historischen Archive der Europäischen Wirtschaftsgemeinschaft und
der Europäischen Atomgemeinschaft (ABI. L 43 vom 15.2.1983, S. 1), zuletzt geändert durch die
Verordnung (EU) Nr. 2015/496 vom 17. März 2015 (ABI. L 79 vom 25.3.2015, S. 1), ist dieser Akt
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 ---pagebreak--- COMMISSION OF THE EUROPEAN COMMUNITIES
                                                COM(87 ) 321 final / 2
REVISED VERSION
                                                Brussels , 21 August 1987
                   • PROPOSAL FOR A COUNCIL DIRECTIVE
          SUPPLEMENTING THE COMMON SYSTEM OF VALUE ADDED TAX
                     AND AMENDING DIRECTIVE 77 / 388 / EEC
                       - APPROXIMATION OF VAT RATES -
                              ( presented by the Commission )
                                      4
                                 ce i \j
C0M(87 ) 321 final / 2
 ---pagebreak---                   EXPLANATORY MEMORANDUM
The Commission 's White Paper provides that , if frontiers and the controls
associated with them are to be removed and the internal market integrated
there will have to be a considerable measure of approximation of indirect
taxes ( 1 ).
The overall approach towards completing the internal market as far as ind
rect taxation is concerned is described in the general communication to tl
Council ( 2 ). That Communication sets out the reasons underlying the propo
sals which we are making and deploys the arguments in their support . It i
particularly important therefore that the present document should be read
in conjunction with that global Communication .
Since value added tax and excise duties have different characteristics ,
they are the subject of separate proposals for Directives .
Approximation of VAT rates - a key stage in the tax harmonization neces ¬
sary for achieving the internal market - poses three technical problems ,
that is , the number of rates to be applied , their level and allocation
of products to the rates .
A dual rate VAT system has been chosen . This has the advantage of flexi ¬
bility and ease of administration and limits difficulties of interprets -,
tion arising from the criteria for classifying products . It is true that ,
in theory, a single VAT rate system is the most simple . However , since
all the Member States (with the exception of Denmark and the United King¬
dom ) apply at least two VAT rates , a reduced rate and a standard rate ,
it would seem desirable not to upset the tax structures of the majority
of Member States .
In an attempt on the one hand to allow a margin for optimum fiscal manoeu¬
 vrability and on the other hand to minimize budgetary repercussions for
the greatest number of Member States , two rate bands have been fixed, one
for the standard rate and the other for the reduced rate , allowing some
degree of flexibility in the choice of actual rates .
The standard rate in each Member State can thus vary between 14X and 20 X
and the reduced rate between 4 X and 9 X.
The reduced rate , in conformity with the principles of the 6th Council
Directive-on the harmonization of the laws of the
(1 ) Document C0M(85)310 final , paragraph  184
(2 ) Document C0M(87)320 final
 ---pagebreak---                                                                            2.
  Member States relating to turnover taxes , must be so fixed that the
 amount of value added tax resulting from the application of this rate
 shall be such as to permit in normal circumstances the deduction of
 the whole of the value added tax whose deduction has been authorized.
 The list allocating goods and services to the rates has been drawn up
 in order to ensure that the same type of product or service is placed
 under the same category of rate in the various Member States , thus
 avoiding systematic deflections of trade , taking account as much as is
 possible of the division by products and services existing at the present
 time in the majority of Member States. The question of zero-rating is
dealt with in detail in the global Communication .
Commentary on the A'ticles
 Article 1
Paragraph 1
 At the present time , the fixing of VAT rates and their number is
determined by the Member States. The new provisions provide , in this
 regard , that all the Member States must henceforth apply two rates of
VAT , to be known as a normal rate and a reduced rate. ,
In order to allow the greatest freedom possible for the Member States ,
two bands of tax rates have been proposed rather than two fixed
rates. The     rate bands have    been  determined so   that  the maximum
number of Member States should suffer the          minimum of budgetary
repercussions.
Analysis of the current distribution of products by tax rate shows that
most Member States which use a system of multiple rates tax similar
categories of products at reduced rates. These categories have been
reproduced at Community level so that each product or service can - be
taxed in the same tax category in each of the Member States.
Paragraph 2
The provisions of Article 28(2) of the Sixth          Directive have been
deleted.
 ---pagebreak---                                          ь
                          PROPOSAL FOR A
                 COUNCIL DIRECTIVE SUPPLEMENTING
          THE COMMON SYSTEM OF VALUE ADDED TAX AND
                   AMENDING DIRECTIVE 77 / 388 / EEC
                 - APPROXIMATION OF VAT RATES      -
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 ( 1 ) ,
Having regard to        the  opinion     of the    Economic   Social
Committee C 2 ) ,
Whereas completing the internal market , which is one of
the fundamental objectives of the Community , requires
that fiscal frontiers be abolished ,           that is to say that
the system of remission of tax on exportation and the
imposition of tax on importation and of frontier controls
on taxable persons as well as on private persons be
discontinued ;
Whereas ,   if distortions are to be avoided , such abolition
implies in the case of value added tax ,               not only a
uniform    tax base     but also   the same    number of rates and
rate levels which are sufficiently close as between
Member States ; whereas it is therefore necessary to amend
Council Directive 77 / 3 88 / EEC ( 3 ) , as last amended by the
Act of Accession of Spain and Portugal ,
HAS ADOPTED THIS DIRECTIVE       :
( 1 )
(2)
( 3 ) OJ No L 145 , 13.6.1977 , p.1
 ---pagebreak---                                                ч
                                        Artide    1
         Directive 77 / 388 / EEC          is hereby amended as follows:
   • Article 12 ( 3) and (4) are replaced by the following:
    "3 .  Member States shall apply two rates of value added
          tax , namely a standard rate and a reduced rate .
          The reduced rate may not be                less than AX.     or more
          than  9  */. .
          The   standard           rate   may   not be  less  than   1 AX    or
          more   than     20   •/. .
     4.       The        reduced         rate     shall    be    applied     to
              transactions relating to the following goods and
              services       :
              - foodstuffs , excluding alcoholic beverages ,
              - energy products for heating and lighting ,
              - uater suppl ies ,
              - pharmaceutical products ,
              - books , newspapers and periodicals ,
              - passenger transport .
         (b ) The normal rate shall be applied to transactions
              relating to goods and services other than those
              set out in (.a)."
2 . Paragraph 2 of Article 28 is hereby deleted.
                                        Article   2
1 .        Member States shall take the necessary measures to
comply with this Directive not later than 31 December
1992 .    They shall       forthwith inform tne Commission thereof .
2.         Member      States        shall   communicate  to  the  Commission
the texts of all the provisions of national law                           which
they adopt in the field governed by this Directive .
 ---pagebreak---                           Artici e 3
       This Directive is addressed to the Member States .
Done , at Brussels ,                 For the Commission
                                     The President
 ---pagebreak---                                                £>
                                      FICHE D' IMPACT
                  Propositions de directives concernant La suppression
                        des frontières fiscales en matière de TVA
- Proposition de directive du Conseil instituant un processus de convergence
   des taux de la taxe sur la valeur ajoutée et les accises
- Proposition de directive du Conseil complétant le système commun de la taxe
   sur la valeur ajoutée et' modifiant la directive 77 / 388 / CEE
   - Rapprochement des taux de TVA
- Proposition de directive du Conseil complétant et modifiant la directive
   77 / 388 / CEE
   - Suppression des frontières fiscales
- Communication de la Commission :
   Achèvement du marché intérieur - Mise en place d' un mécanisme de compensation
   de la TVA pour les ventes intracommunautaires
1 . CONTRAINTES ADMINISTRATIVES DECOULANT DE L' APPLICATION DE LA LEGISLATION
    POUR LES ENTREPRISES :
    Directives : Néant
    Clearing       : Fournir quelques éléments supplémentaires sur la déclaration
                     TVA périodique
2 . ALLEGEMENTS POUR LES ENTREPRISES :
    - La plupart des Etats membres , à l' exception du Danemark , utilisant un
        système de TVA à deux ou plusieurs taux , la proposition entraînera une
        simplification de la gestion administrative de la TVA . Tous les Etats
        membres utiliseront en effet un système de TVA à deux taux , ce qui
        simplifiera la ventilation entre les taux , la structure des taux sera
        donc identique .
    - De plus , un même produit sera taxé au même type de taux dans tous les
        Etats membres , la classification des produits par taux sera simplifiée .
    - Les formalités d' exportation et d' importation seront supprimées puisque
        le système actuel de la détaxation ( taux zéro ) à l' exportation et de la
        taxation à l' importation sera aboli . Toutes les opérations intra-commu-
        nautaires seront traitées de la même façon que les opérations en régime
        intérieur à l' heure actuelle .
    - Les petites entreprises ayant un chiffre d' affaires annuel inférieur à
        35.000 ECUs sont libérées des obligations découlant du clearing et bénéfi ¬
        cieront donc d' un traitement plus favorable dans ce domaine . Le chiffre
        de 35.000 ECUs correspond à la limite pour la franchise facultative
        prévue dans la proposition de directive en matière d ' harmoni sat i on du
        régime particulier TVA applicable aux PME ( Doc . C0M(86)444 final ).
3 . INCONVENIENTS      POUR LES ENTREPRISES ( coûts sucp lément a î res ) :
    Non
 ---pagebreak---                                   -r
4 . EFFETS SUR L' EMPLOI     :
    Ces directives n' ont pas d' effets directs sur l' emploi . Toutefois , vu
    les allègements procurés aux entreprises ( cf. point 2 ) on peut raison ¬
    nablement espérer- un effet positif sur l' emploi .
    De plus , la création du marché intérieur contribuera à la relance de
    l' économie européenne entière et par conséquent entraînera vraisembla ¬
    blement des effets positifs sur l' emploi .
5 . Y A- T- IL EU CONCERTATION PREALABLE AVEC LES PARTENAIRES SOCIAUX ?
    Non
6 . Y A - T - IL UNE APPROCHE ALTERNATIVE MOINS CONTRAIGNANTE ?
    Non