CELEX: 51982PC0790
Language: en
Date: 1982-11-30
Title: PROPOSAL FOR A COUNCIL DIRECTIVE on a derogation accorded to Denmark relating to the rules governing turnover tax and excise duty applicable in international travel (submitted to the Council by the Commission)

ARCHIVES HISTORIQUES
DE LA COMMISSION
COLLECTION RELIEE DES
DOCUMENTS "COM"
COM (82) 790
Vol. 1982/0238
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 ---pagebreak--- COMMISSION OF THE EUROPEAN COMMUNITIES
                                                         COM(82)790 final
                                                         Brussels , November 30 , 1982
                         PROPOSAL FOR A COUNCIL DIRECTIVE
                        on a derogation accorded to Denmark
                relating to the rules governing turnover tax and
                 excise duty applicable in international travel
                 ( submitted to the Council by the Commission )
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 ---pagebreak---                                 EXPLANATORY MEMORANDUM
Annex VII , Part V , paragraph 1 of the Act of Accession granted a derogation
to Denmark relating to the application of certain provisions of Council
Directive 69/169/EEC of 28 May 1969^^ , as amended by Directives 72/230/EEC
of 12 June 1972^, 78/1032/EEC^ 3\ 78/l033/EEG^ 3\ 8l/933/EEC^4\ and
82/44 3/EEC^^ , on the harmonisation of provisions laid down by law,
regulation or administrative action relating to the rules governing turnover
tax and excise duty applicable in international travel .            The Council was
to decide before 31 December 1975 whether and how far a prolongation of
this derogation appeared necessary , taking into account the extent to which
economic and monetary union , and particularly progress in tax harmonisation .
had been achieved. By directives of 20 Janizary 1976^\ 18 January 1977 ^
and 19 December 1977^ ^he Council accorded three prolongations of the
derogation , respectively up to and including 31 December 1976 ,
31 December 1977 and 31 December 1982 .
The Danish Government has expressed concern at the economic consequences
which full application of the existing directives on travellers * allowances
would present , because of the particularly high level of excises in Denmark ,
and has requested a further prolongation .
The last prolongation of the derogation was accorded by the Council in
 1977 , for a five–year term and included provision for certain relaxations
 in the existing Danish rules .          During this period , the Commission has
 (^O.J. No L 133, 4.6.1969 , P. 6
        T
     O.J.  No TL I139
                   ■JO
                       , tn A 1 010
                         17.6.1972  , p . 28
 (3
     O.J. No L 366 , 28.12.1978 , p . 28 and 31
 (4 '0.J. No L 338 , 25.11.1981, p. 24
 J5 Jo .J. No. L 206, 14.7.1982, p. 35
 (5)
 (6)
 J6Jo.J. No. L 21 , 29.1.1976, p. 9
 (^O.J.
  7)       No. L 23 , 27.1.1977 , p. 50
 ^O.J. No. L 336 , 27.12.1977 , p. 21
 (8)
 ---pagebreak---                                         - 2 -
presented, annual reports        on the evolution of the prices of alcoholic
drinks and. tobacco products in Denmark and Germany , on the evolution of
fares for travellers and on the fiscal policy of the Danish Government .
The fifth report of the Commission , ( COM(82 ) 673 ) submitted to the Council
on 26 October 1982 , includes a general review of the overall changes during
the first four and a half years of the five-year derogation period .       The
report concludes that , during this period , the tax levels in Denmark and
Germany have moved somewhat closer together , and that the weakening of
the Danish crown relative to the DM has also been a factor tending to
reduce the price advantages for Danish travellers making purchases in
Germany .     As a consequence , the price gaps for most products covered by
this report have been substantially reduced, by comparison with the
situation at the end of 1977 •      On the other hand , due largely to the
mixed excise on spirits , introduced in May 1980 following the Court ruling
of 27 February I98O against the Danish two-tier alcohol taxation , the price
gap for many spirits – particularly expensive spirits – remains substantial .
The report also notes , however , that shopping excursions by bus are
continually increasing , suggesting that a large proportion of the cross-
border trips originating in Denmark continue        to be made largely in order
to avoid Danish taxes , and that planned increases in the Danish excises
will offset to some degree the progress made in reducing the price gaps .
 ( The imposition of VAT on the fares for bus excursions may tend to slow
down the growth in this traffic ).
The Commission is naturally concerned that , almost ten years after Denmark 's
 accession to the Community , Danish residents continue to be denied the
 allowances normally granted to travellers elsewhere in the Community . This
 is , to say the least , an unfortunate situation , and one which should be
brought to an end as quickly as possible .       On the other hand , the
 ' Wl(79 ) 774
     C0KÍ80 ) 33
     C0K(80 ) 880
     coxf 81 ) 806
     COMÍ 82 ) 673
 ---pagebreak---                                   - 3 -
Commission acknowledges that , given the present price differentials for
excise products between Denmark and Germany , and in view of the present
economic situation in Denmark , full alignment on the Community allowances
on 1 January 1983 – as had "been foreseen when the derogation was last
prolonged in 1977 - would have unacceptable budgetary and economic
consequences .
In these circumstances , the Commission feels obliged to propose that
the derogation be again prolonged. However , the Commission is firmly of
the view that this prolongation should be accompanied by a programme of
progressive liberalisation of the present Danish rules , so that the
adjustment remaining to be made to the Community rules at the end of the
derogation period should be relatively modest . The alternative to such a
programme is the virtual institutional! sat ion of the derogation , which the
Commission regards as unacceptable .
For these reasons , the attached draft Council directive proposes in
Article 1 a five-year prolongation of the derogation , with provision for
progressive and substantial relaxations , either in the quantitative limits ,
or in the rules governing the period to be spent abroad in order to qualify
for the allowances . It will be seen , in particular , that it is proposed
that minor steps will be taken in the first two years of the proposed
derogation period and after that the quantitative limits will be phased out
quite rapidly . The normal quantitative limits should apply from
1 January 1986 for cigarillos , cigars , normal smoking tobaccos , and beer ,
whereas the limit for cigarettes and hand-rolling tobacco ( at present 60
pieces and 100 g respectively ) should be increased to 200 pieces and 2^0 g
from the same date . In Article 2 is is proposed that the mediunr-term
programme as proposed in Article 1 to align Denmark to the harmonised
Community rules may be taken up for re–examination after one and a half years ,
 if at that time the state of the Danish economy and balance of payments
requires a postponement of the application of all or part of the above
mentioned realignment steps .
Annexed is a table comparing the existing Danish allowances for goods
 covered by the derogation with the normal Community allowances .
                                                                  ./•
 ---pagebreak---                                -4-
                                                       ΑΝΉΕΧ
Excise floods at present Current ( 1982 ) allowances Normal
covered by the           for a Danish resident       Community
derogation               returning after less than   allowances
                         46 hours abroad
                         ( Directive 77 /800/EEC )   ( Directive
                                                     69/169/EEC )
Cigarettes                           60                  300
  or
Cigarillos ( cigars                  20                  150
of a maximum
weight of 3 gm )
  or
Cigars                               20                   75
  or
Smoking tobacco                    100 gm               400 gm
Distilled beverages                 Nil                1.5 litres
and spirits of an
alcoholic strength
exceeding 22 $ volume
Beer                              2 litres             No quant îty
                                                          limit
 ---pagebreak---                                          - 5 -
                          Proposal for a Council Directive
                         on a derogation accorded to Denmark
               relating to the rules governing turnover tax and
                excise duty applicable in international travel
THE COUNCIL OP THE EUROPEAN COMMUNITIES ,
Having regard to the Treaty establishing the European Economic Community ,
and in particular Articles 99 and. 100 thereof ,
Having regard to the proposal from the Commission ,
Whereas , pursuant to Annex VII , Part V 1 ( a ) to Article 133 of the 1979 Act
of Accession , Denmark was granted a derogation regarding the application
of certain provisions of Council Directive 69 / 169 / EEC of May 28 , 1969 on
'he harmoni sat ion of provisions laid down by law , 'regulation on administra-
   :    action relating to exemption from turnover tax and excise duty on
                                      (1 )
imports in international travel            , as last amended by Directive
               (2)
82 / 443 / EEC     ; whereas this derogation was last extended by Directive
77 /800 /EEC ^ adopted pursuant to Annex VII , Part V 1(c ) pf'the said Act
of Accession ;
Whereas the Danish Government has requested a further period in which to
apply the harmonised rules stemming from Directive 69 / 169 / EEC ;
( 1 ) OJ No L 133 , 4.6.1969 , P. 6
 ( 2 ) OJ No L 206 , 14.7.1982
 ( 3 ) OJ No L 336 , 27.12.1977 , p. 21
                                                                         •A
 ---pagebreak--- Whereas the tax system at present applied in Denmark does not yet allow the
full application of such rules in Denmark without the riBk of serious
economic consequences ;
Whereas , therefore , Denmark should be provisionally author i sed to apply
exceptional arrangements ; whereas , however , in order to facilitate
adaptation , provision should be made for the progressive adaptation of
these arrangements to the harmonised Community rules ,
 HAS ADOPTED THIS DIRECTIVE s
 ---pagebreak---                                     Article 1
1 . Notwithstanding Directive 69 / 169 / EEC , Denmark is hereby authorised , in
respect of exemption for imports of tobacco products , alcoholic beverages
( distilled beverages and spirits of an alcoholic strength exceeding 22 %
volume ) and beer to apply the following quantitative limits , where such
goods are imported by travellers resident in Denmark , after a stay in
another country :
     – until 31 December 1985 » when the stay is less than 48 hours , and
     – from 1 January 1986 to 31 December 1987 j when the stay is less than
        24 hours 1
                Until      From 1,1.84    Prom 1.1.85     From 1.1.86   From 1.1 . 87
                 31.12.83       to              to             to            to
                              31.12.84     31.12.85          31.12.86      31.12.87
Cigarettes          60           60              140           200            240
    or
Cigarillos          20           40                60           -              -
( cigars of a
maximum
weight of 3 gm )
    or
Cigars              20           30                40
    or
Smoking            100 gm       200 gm           300 gm         –               –
tobacco where
the tobacco
particles have
a width of at
least 1*5 mm
    or
other smoking      100 gm       100 gm           200 gm        25O gm        300 gm
tobacco ( fine
eut )
Distilled          Nil          Nil            0.35 litre    0.35 litre     0.7 litre
beverages and
 spirits of an
alcoholic strength
exceeding 22$ vol .
Beer                2 litres     4 litres          6 litres     –   •          "~
                                                                                •A
 ---pagebreak---                                        8
2 . Where the traveller is returning from a stay in a third, country , the
allowances may in no circumstances exceed those laid down in Article 4 ( 1 ),
column I of Directive 69 / 169 / EEC .
                                    Article 2
If , in the light of the levels of Danish excise rates then obtaining and of
the expected evolution of the Danish economy and "balance of payments over
the period 1985^-1987 , Denmark presents , by June 30 , 1984 , a request to
postpone the application of all or part of the subsequent changes provided
 for in Article 1 , the Council , acting unanimously on a proposal from the
 Commission , may grant such postponement for a limited period .
                                    Article 3
 Denmark shall communicate to the Commission the texts of the measures which
 it adopts in order to comply with this Directive .
                                    Article 4
This Directive is addressed to the Kingdom of Denmark,
Done at Brussels ,
                                                  For the Council
                                                  The President