CELEX: 51987PC0324
Language: en
Date: 1987-08-21
Title: Proposal for a Council Directive instituting a process of convergence of rates of value-added tax and excise duties (presented by the Commission)

ARCHIVES HISTORIQUES
DE LA COMMISSION
COLLECTION RELIEE DES
DOCUMENTS "COM"
COM (87) 324
Vol. 1987/0189
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 ---pagebreak--- COMMISSION OF THE EUROPEAN COMMUNITIES
                                                         COM(87 ) 324 final / 2
 REVISED VERSION
                                                         Brussels , 21 August 1987
                               Proposal for a Council Directive
                            instituting a process of convergence of
                          rates of value-added tax and excise duties
                                       ( presented by the Commission )
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                              EXPLANATORY MEMORANDUM
The overall approach towards completing the internal market as far as indi ¬
rect taxation is concerned is described in the Commission 's Global Communi ¬
cation to the Council' 1 ’ . That Communication sets out the reasons underly¬
ing the proposals which the Commission is making and deploys the arguments
in their support . It is particularly important therefore that the present
document should be read in conjunction with the Global Communication .
On 21 November 1985 , the Commission submitted to the Council a proposal for
a Directive' 31 which instituted within the framework of the White Paper on
the completion of the internal market'*’ a standstill on VAT and any new
excise duties in order to prevent any further increase in the existing dif ¬
ferences between national systems of indirect taxation .
On 22 May 1986 , the Economic and Social Committee delivered a favourable
opinion on the proposal'*’ .     The European Parliament was also in principle
in favour of the proposal , but in its opinion of 9 October 1986'*’ put for ¬
ward a number of amendments which led the Commission to amend its original
proposal     .
Now that the Commission has presented its detailed proposals in the field
of indirect taxation described in the Global Communication , the proposed
standstill Directive as at present drafted         is no   longer appropriate .
Instead , the Commission proposes a new draft Directive which would prohibit
any divergence in the number and level of VAT rates at present applied by
the Member States whilst at the same time allowing , and indeed encouraging ,
convergence towards the number and level of VAT rates which the Commission
proposes should apply by 31 December 1992 at the latest .
' ■•* Document C0M187 ) 320 final
t3 > O.J. Nr . C 313 of 4.12.1985
'*’ Bulletin CE 6/ 1985 , points 1.3.1 and following
'*’ O.J. Nr . C 207 of 18.08.1986
*•> O.J. Nr . C 283 of 10.11.1986
< d )
      O.J. Nr . C 30  of 07.02.1987
 ---pagebreak---                                       3
 Similarly , for excise duties on alcoholic drinks , tobacco products and
mineral oils , only changes which converge towards the rates of duty pro ¬
 posed by the Commission would be allowed .  The introduction of new excise
duties which give rise to controls at internal frontiers would be prohib ¬
ited .
Commentarv on the Articles
Article 1
Provisions relating to VAT
Paragraph 1 proposes , as a general rule , a prohibition on changes to the
number and rates of tax except within the conditions fixed by paragraphs 2
and 3 .
Paragraph 2 establishes the provisions which concern the number of rates to
be retained .
Paragraph 3 provides that the Member States can alter their normal and
reduced tax rates on condition that they do so within the terms provided
for in the Directive .  The higher tax rates must be abolished , or reduced
in such a way as to align themselves on the VAT system of two rates
proposed by the Commission .
Article 2
Provisions relating to excise duties
Paragraph 1 provides for a prohibition against the introduction by Member
States of new excise duties which give rise in trade within the Community
to the system of taxation of imports and refunds on export or to internal
frontier controls .
 ---pagebreak---                                       4
Paragraphs 2 and 3 provide for a standstill for the excise duties which
relate to tobacco products , alcoholic drinks and mineral oils as set out in
paragraph 4 . The standstill includes a prohibition against any increase in
the scope of these duties .
Paragraph 4 provides that the Member States can alter their excise duties
which apply to alcoholic drinks , tobacco products and mineral oils provided
that they move towards the Community rates .
 ---pagebreak---                                 Proposai for a
                   Council Directive instituting a process of
                convergence of rates of value added tax and
                                 excise duties
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 of the opinion of the Economic and Social Committee' 25 ,
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 the measures to be taken to accomplish that objective ought
to be spread over a period of time , but it is necessary at present to
avoid an increase in the existing divergence between the fiscal systems of
the Member States and on the contrary to encourage their convergence ;
Whereas, in order to attain this objective, it is necessary for the Member
States to refrain from altering the number and          the rates of value added
tax ; whereas   it  is on the other hand desirable that the Member States
should , if they wish ,   be authorized to alter the number and the rates of
tax which they apply in each situation so that the substantial differences
that currently exist within the Community maybe reduced ;
 ---pagebreak---                                           6
Whereas only the excise duties on tobacco products, alcohoiic drinks
and mineral oils ought to be maintained at a Community level ; whereas the Mem
ber States ought therefore to commit themselves not to introduce new
excise duties or to increase the rates or the scope of existing excise
duties; whereas it is appropriate, however , to allow them to move
their main excise duty rates towards the Community rates ,
HAS ADOPTED THIS DIRECTIVE :
                                     Article 1
                            Value-Added Tax provisions
1 . Standstill
    Pending the adoption of provisions concerning the number and level of
    the rates which will have to be applied in the Community in order to
     permit the abolition of the remission of tax on exportation and of the impo¬
     sition of tax on importation insofar as trade between Member States is con¬
     cerned, Member States shall refrain from altering the number and level of
     rates which they apply at the date of adoption of this Directive, subject to
     the rights provided for in the paragraphs below.
2.  Optional convergence of the number of tax rates
          Member States which apply :
    a)    three rates or more, may reduce that number to two rates ,        to be
          called a reduced rate and a normal rate ,
    b)    one rate, may increase    that number to two rates ,   to be called a
          reduced rate and a normal rate .
 ---pagebreak---                                             7
3•  Opt iona l converg ence of the tax rates
          Member States may :
   (a)    alter the levels of their reduced and normal tax rates on condition
          that they move towards or within the following limits :
        ( aa )    for reduced rates : between 4% and 9%
        (ab )     for normal rates : between 14% and 20 %
   (b )   reduce or abolish their increased tax rates .
                                       Article 2
                                Excise Du ty provis ions
1.        Member States shall refrain from introducing new excise duties or
    indirect taxes which give rise ,          in trade between Member States ,   to
    taxation on importation and remission of tax on exportation or to fron ¬
    tier controls .
2.  Member States shall refrain from increasing the rates or enlarging the
    scope of those excise duties or indirect taxes which give rise to taxation on
    importation and remission of tax on exportation or to frontier controls.
3.  Paragraphs 1 and 2 shall not apply to the excise duties on manufactured
    tobacco , alcoholic beverages and mineral oils .
4.  Pending the adoption of provisions concerning the rates and/ or amounts
    of excise duty which will have to be applied in the Community in order
    to permit the abolition of import taxation and of export tax remission
    in trade between Member States ,          the latter may alter the rates of
    excise duty applied to the products set out below on condition that
    they move towards the following levels or amounts:
    Alcoholic Beverages
    Potable Spirits ( per hi of pure alcohol )                           1271     ECU
    Intermediate products ( per hi )                                         85   ECU
    Uines                                                                    1 7  ECU
    Beers      oer ° Plato p^r h !                                        -,  -   Í-CU
 ---pagebreak---                                      8
Manufactured tobacco
Cigarettes : spécifie excise in (pCU per 1.000 )         19,5 ECU +
   + ad valorem duty plus VAT
      ( as a % of the retail price )                between 52% and 54%
Cigars and cigarillos
     ad valorem duty plus VAT
     ( as a % of the retail price )                 between 34% and 36%
Smoking tobacco
     ad valorem duty plus VAT
     ( as a % of the retail price )                 between 54% and 56%
Other manufactured tobacco
     ad valorem duty plus VAT
     ( as a % of the retail price )                 between 41% and 43%
Mineral oils
Leaded petrol and medium oils used as propellant
per 1.000 1                                                     340 ECU
Unleaded petrol per 1.000 1                                     310 ECU
Liquified Petroleum gas ( LPG ) per 1.000 1                      85 ECU
Diesel oil per 1.000 1                                          177 ECU
Heating gas-oil and medium oils used as fuels other than
propellants per 1.000 1                                          50 ECU
Heavy fuel oil per 1.000 kg                                      17 ECU
 ---pagebreak---                                           9
                                     Artide 3
     The Member States shall communicate to the Commission the text of all
     the provisions of national law which they adopt in the field covered by
     this Directive .
                                     Article 4
      This Directive is addressed to the Member States.
Done at Brussels ,                                For the Council
                                                   The President
 ---pagebreak---                                           te
                                       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 cleoring 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' harmonisation du
         régime particulier TVA applicable aux PME ( Doc . C0M(86)444 final ).
 3 . INCONVENIENTS      POUR LES ENTREPRISES ( coûts supplémentaires ) :
     Non
 ---pagebreak---                                          H
A. 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