kom (1965) 0144 - Ingen titel

Markedsudvalget 1965
KOM (1965) 0144
Offentligt

Proposal for a second directive for the harmonization among Member States

of turnover tax legislation, concerning the form and the methods of application

of the common system of taxation on value added

(submitted by the Commission to the Council)

Supplement

BULLETIN

·ofthe European Economic Community

No. 5-1965

Pages 26-35

EXECUTIVE SECRETARIAT OF THE COMMISSION

OF THE EUROPEAN ECONOMIC COMMUNITY

kom (1965) 0144 - Ingen titel

a purpose of social policy, in so far as

agricultural products, as products of prime

necessity, will be taxed but lightly, and

an aspiration of agricultural policy, in

so far as reduced rates could actually be

so fixed that the tax generally does not

exceed the burden of taxes now paid by

farmers on their purchases. Thus the total

tax burden on agriculture would not

increase.

Article 12, paragraph 2

To avoid the difficulties which the immediate

application of the provisions of paragraph 1

might entail, transitional arrangements may

be introduced until the abolition of fiscal

boundaries.

For the afore-mentioned reasons the Com-

mission is directed to submit relevant pro-

posals to the Council not later than 1 April

1966.

in re Article 13

With the introduction of common price

systems on 1 July 1967, a Common Market

will be created for the majority of agricul-

tural products. To prevent the introduction

of the common TV A system from causing

distortions of competition, common rules

need to be established for the list of agri-

cultural products as well as for the rates

which Member States apply within the

common TVA system until the abolition

of fiscal boundaries.

Furthermore, care must be taken lest the

application of TVA according to the pro-

posed system disturb the functioning of the

common organization of agricultural mar-

kets and, in particular, of the price systems

involved therein. For this reason, it may

become necessary to adopt special arran-

gements to take account of these require-

ments of the common agricultural policy.

The prior consultations with which this

provision is concerned, are required in the

following cases :

deviation from the rule of Article 1,

paragraph 3, concerning the territorial

scope (Annex A, point 1);

application of the so-called

Organschaft

system (Annex A, point 2);

delimitation of the stage of retail trade,

if this stage is excluded from the scope of

TVA (Annex A, point 2);

application of certain customs rules to

the collection of TV A on imports (Annex A,

point 12);

exemptions (Article 8, paragraph 3);

adoption of special arrangement for small

firms (Article 11).

Proposal for a second directive for the harmonization among Member States

of turnover tax legislation, concerning the form and the methods of application

of the common system of taxation on value added

(submitted by the Commission to the Council)

Tbe Council

Community

of tbe

European

Economic

Having regard to

the opinion of the Economic

and Social Committee;

Having regard to

the opinion of the European

Parliament;

Whereas

the replacement of turnover taxes

now current in Member States by a common

system of taxation on value added is intend-

ed in particular to achieve two main pur-

poses, namely, first, neutrality of tax

effects on competition both nationally

and on the Community level, and secondly,

the establishment, during a first stage, of

one of the preconditions for the abolition

ot taxation on imports and exemption for

exports in trade among Member States -

Having regard to

the provlSlons of the

Treaty setting up the European Economic

Community and in particular to those of

Articles 99 and 100 thereof;

Having regard to

the provisions of the first

Directive for the harmonization among

Member States of turnover tax legislation

adopted by the Council on .................. ,

and in particular those of Articles 1, 2 and

3 thereof;

Having regard

Commission;

the

proposal of the

kom (1965) 0144 - Ingen titel

nereafter called "abolition of fiscal bounda-

ries" - which is envisaged as the ultimate

aim of turnover tax harmonization;

Whereas

the common system of taxation

on value added is initially to be applied

during a period when fiscal boundaries

still subsist and it is, in these circumstances,

possible to concede to Member States

far-reaching discretion in the determination

of tax rates or differential tax rates;

Whereas

the temporary subsistence of fiscal

boundaries does not, as such, preclude the

continued existence, for the time being,

of certain differences in the methods of

taxing value added in Member States, but

whereas it is nevertheless highly desirable

to limit these differences to the extent

possible, lest the achievement of the

ultimate aim require further major changes

in national legislation;

Whereas

it was found necessary to make

provision for the possibility of deviating

from the common methods of application

in certain special cases where the introduc-

tion of the new system raises particularly

serious difficulties in certain Member

States;

Whereas

this right of deviation must,

however, obviously not lead to

regu~ations

which might entail disturbances

the

conditions of competition among Member

States and divergent regulations must

not on the other hand, be allowed to

codtpromise the achievement of the

u~ti

mate aim whence it is necessary to provide

for prior

~onsultation betw~en

the

~ommis

sion and Member States

certam cases,

so as to forestall the afore-mentioned

consequences;

Whereas

the common system of taxation

on value added, to be as unadulterated and

as neutral as possible and to achieve maxi-

mum simplicity, must have the broadest

possible scope, which means that an

attem~t

must be made to achieve complete generali-

zation of the tax, this being in any case

implicit in the very nature of

~he

tax

conceived as a general consumption tax

on goods and services ;

Whereas

in this view it is highly expedient

to encompass within the scope of the tax

all economic activities in the field of ser-

vices no less than in the fields of production

and distribution and thus to extend the

levy of the tax as far as the stage preceding

end-use;

Whereas,

to make the system simple and

neutral in application and to keep the

general tax rate within reasonable

limi~s,

it is therefore necessary to oppose

principle any claims for preferential and

exceptional treatment in any particular

field;

Whereas

the system of taxation on value

added certainly leaves room for a differ-

entiation of tax rates by which the tax

burden on certain goods and services may,

in case of need, be diminished or increased

for social or economic reasons, but whereas

the system does not readily lend itself to

the introduction of zero rates, so that it is

highly desirable strictly to limit

~ases

C?f

exemption and to afford such rehef as is

deemed necessary by reducing of the tax

rates to the minimum that still allows of

the normal deduction of the tax paid at

the preceding stage, the result, for the

rest, being generally the sat?e as that n?w

achieved by ·exemptions

cumulative

multi-stage systems;

Whereas

it was found feasible to leave

Member States free to determine their own

system of taxa!ion for

th~

large

categ~ry

of services havmg no beanng on the price

of goods as well as their own

a.rrang~

ments for taxing small firms, subject, m

this latter case, to prior consultations;

Whereas

it was found necessary to make

special provisions with respect to taxation

on value added in agriculture, such that

they shall not disturb the common market

for the majority of agricultural

produ~ts

which is to be created on 1 July 1967 with

the introduction of common prices, and

whereas, therefore, the Commission is

directed to submit relevant proposals to

the Council forthwith;

Whereas

there is need for a fairly large num-

ber of detailed provisions dealing with

interpretation, exceptions

an~

certain det.ails

of application, and for .a hst of

servi~es

subject to the Commumty

~ystem,

whic?

provisions and list are contamed, respecti-

vely, in Annex A and Annex B;

Has adopted the present directive :

Article 1

1. Member States shall levy a turnover

tax to be termed "tax on value added"

or '"TVA" in this directive.

2. Tax on value added shall be charged on

the delivery of goods and the perform-

ance of services effected by a taxpayer

kom (1965) 0144 - Ingen titel

against remuneration

country,

the import of goods.

and

within

the

the consignment of construction work

including work to incorporate a movable

into an immovable good (');

3. Regardless of legal or contractual pro-

visions, a delivery shall be deemed to be

located:

in case the good is despatched or trans-

ported by the supplier, the buyer or a third

person, at the place where the good is

located at the moment when its despatch

or transport to the buyer begins;

in case the good is not despatched or

3. The term "within the country" shall

be understood to mean the territory in

which the Member State concerned applies

TVA and which, in principle, should

encompass the whole of the national

territory (

1).

Article 2

The term "taxpayer" within the meaning

of Article 1, paragraph 2,a, shall be under-

stood to mean anyone who on his own

account carries out an activity of production,

trade or performance of services, whether

he does so regularly or occasionally, with

or without intent to earn a profit

(2).

transported, at the place where the good

is located at the moment of transfer of the

title to dispose of the good as owner.

4. The operative fact, that is, the creation

of the tax liability, takes place at the moment

of delivery. In case of a delivery involving

advance payments, the operative fact exists

already at the moment of invoicing or, at

the latest, at the moment of cash receipt,

with reference to the amount of this invoice

this receipt (

8).

Article 3

1. The term "delivery of goods" shall be

understood to mean the transfer of the

title to dispose of any tangible good as

owner (

3).

2. The following shall be deemed taxable

deliveries :

the actual handing over of a good by

virtue of a hire-purchase contract (

4 );

the conveyance of title to property

against payment of a compensation, by

virtue of official requisition;

Article 4

1. The term "service" shall be understood

to mean any transaction other than a deliv-

ery of goods in the meaning of Article

(9).

2. The provisions of this Directive regard-

ing the taxation of services shall apply only

to the services enumerated in Annex B

(1°).

3. A service shall in principle be deemed

to be located at the place where the service

rendered, the right assigned or granted,

or the good leased is to be used or exploi-

ted (

11).

4. The operative fact, that is, the creation

of the tax liability, takes place at the moment

of the performance of the service. In case

of services of indeterminate duration, or of

those lasting longer than a certain period

or involving advance payments, the opera-

tive fact exists already at the moment of

invoicing or, at the latest, at the moment

of cash receipt, with reference to the

amount of this invoice or this receipt.

a taxpayer's withdrawal of a good from

his firm for private use, or for use as a

gift (

5 );

in certain cases, a taxpayer's use, for

purposes of his firm, of a good produced

or extracted by himself or on his account

by a third person (

6);

the transfer of a good by virtue of a

contract for purchase or sale on commission;

the consignment of made-to-order work,

that is, the contractor's delivery to his

client of a movable good which the con-

tractor has manufactured from materials

furnished to him by the client to this end,

regardless of whether the contractor has,

or has not, furnished some part of these

materials

(7);

. ( 2)

Article 5

1. The term "import" shall be understood

to mean the introduction of a good into

See Annex A, point 7.

See Annex A, point 8.

( )

See Annex A, point 9.

(1°)

See Annex A, point 10.

(") See Annex A, poiot 11.

( 8)

See Annex A, point 1.

See Annex A, point 2.

(') See Annex A, point 3.

( 4 )

See Annex A, point 4.

( 5)

See Annex A, point 5.

( 6)

See Annex A, point 6.

( )

Sec Annex A, point 7.

( 1)

( 7)

kom (1965) 0144 - Ingen titel

the territory in which the Member State

concerned applies TV A.

2. As regards imports, the operative fact

is the introduction of the good into the

territory in which the Member State con-

cerned applies TV A. This provision does

not, however, preclude the operative fact

and/or the due date ot TV A being linked

with the operative fact andfor the due

date ot customs duties and, as the case may

be, of other taxes, dues and levies to which

the imported good is subject (

12).

Article 8

Exemption from TVA shall be granted,

in conditions to be determined by each

Member State, for deliveries of goods

despatched or transported outside the

territory within which the Member State

concerned applies TV A (17).

2. Exemption from TVA may be granted,

in conditions to be determined by each

Member State, for services in connection

with taxable goods despatched or trans-

ported outside the territory within which

the Member State concerned applies TV A.

3. Each Member State may, subject to

consultations as under Article 13, grant

such other exemptions as it deems neces-

sary (

18).

Article 6

The tax base shall be as follows (

13)

for deliveries and services, everything

which constitutes the counterpart for the

delivery of the good or for the service,

including all expenses and taxes, except

TVA itself (14);

for the transactions mentioned in

Article 3, paragraph 2,

and

the purchase

price of the goods or similar goods, or,

failing a purchase price, their cost of

production;

Article 9

A taxpayer shall be entitled to deduct

from TVA calculated on his turnover :

the amount of TV A for which he is

charged with respect to goods delivered

to him and services rendered to him (

19),

TV A paid for imported goods,

to the extent to which the goods and ser-

vices referred to under

and

are used

for the purposes of his firm;

TVA which he has paid with respect to

withdrawals as under Article 3, para-

graph 2,

for the import of goods, their customs

value as assessed for purposes of the appli-

cation of ad valorem duties, plus all duties,

taxes, dues and other levies payable on the

import, except TV A itself. The same tax

base shall be applicable when the good is

free of customs duties or is not subject to

ad valorem duties (1

5 ).

Article 7

The standard rate of TVA shall be

fixed by each Member State as a percentage

of the tax base, which percentage shall be

the same for delivery of goods and perform-

ance of services.

2. Certain transactions may, however, be

made subject to increased or reduced rates.

Every reduced rate shall be so calculated

that the amount of TVA due by virtue

of the application of this rate normally

allows of deduction of the whole TV A

levied at the preceding stage (

16).

3. The rate applied to• imports of a good

shall be the same as the rate applied within

the country to deliveries of a like good.

See

(")See

( 16)

See

( 10)

See

( 13)

2. TVA levied on goods and services

used for non-taxable or exempted trans-

actions shall not be deductible. Deduction

is allowable, however, with respect to

deliveries of goods and to services which

would be taxable within the country but

are not taxable because effected abroad, or

which are exempted by virtue of.Article 8,

paragraphs 1 and 2.

As regards goods and services used both

in transactions creating a claim for deduc-

tion and in transactions creating no claim

for deduction, deduction shall be allowable

only with respect to that proportion of

TVA which corresponds to the value of

the first-named transactions (pro rata

rule) (

20).

3. TVA levied on the acquisition of

goods and services shall be deductible

from TVA due for the period in the course

( 17)

See Annex A, point 17.

(18) See Annex A, point 18.

( 19)

See Annex A, point 19.

(") See Annex A, point 20.

( 13)

Annex

point 12.

point 13.

point 14.

point 15.

point 16.

kom (1965) 0144 - Ingen titel

of which the invoice for these goods and

services is received (immediate deduc-

tion)

1).

In the case of partial deduction in accord-

ance with paragraph 2, the amount to be

deducted shall be provisionally determined

on the basis of the general pro rata appli-

cable to the preceding year and shall be

adjusted at the end of the year, once the

pro rata proportion for the year of acquisi-

tion has been calculated. With respect to

capital goods, the adjustment shall be

spread over a five-year period, including the

year in which the goods were acquired, and

shall relate each year to only one fifth of

the tax levied on the capital goods con-

cerned

2).

4. Certain goods and certain services may

be excluded from the system of dedudctions,

and especially such goods and services as

are apt to be used exclusively or partially

for the private purposes of the taxpayer or

his staff.

5. Whenever in any one monthly, quarterly

or half-yearly period of declaration the

amount of deductions exceeds the amount

of TVA calculated on turnover, the excess

shall be carried torward to the following

period. At the end of the calendar year

any such excess then outstanding shall be

refunded (

23).

the date of the invoice as well as that

of the delivery or the service, or, as the

case may be, the period over which the

delivery or service is spread;

the net price and the tax corresponding

to each relevant tax rate, as well as exemp-

tions, if any

6).

3. Every taxpayer shall every month file

a declaration containing, for the transactions

of the preceding month, all the information

necessary for the calculation of the tax and

the deductions to be made.

However,

each Member State is free to authorize

certain taxpayers for practical reasons to

file their declarations quarterly, half-yearly

or yearly. During the first six months of

each year every taxpayer shall, if need be,

make a declaration concerning the preced-

ing year's transactions for purposes of the

calculation of such rectification as may be

necessary.

4. When filing his monthly, quarterly,

half-yearly or yearly declaration, every tax-

payer shall pay the corresponding amount

of TV A to the tax collector.

5. Rules for declarations and payments

of TVA with respect to imports shall be

established by each Member State.

Article 11

Article 10

Every taxpayer shall keep accounts in

sufficient detail to allow of the application

of TV A and of inspection by the tax

administration.

2. Every taxpayer shall make out an

invoice for deliveries of goods, as well as

for services, to another taxpayer

4).

This invoice shall contain the following

details (

25 ) :

the personal name, or the name of the

firm, and the address of the supplier and

the client;

the nature, quantity and customary

commercial designation of the goods deliv-

ered or of the services rendered;

Each Member State is free, subject to

consultation in accordance with Article 13,

to apply to small firms, with respect to

which the application of the normal TVA

system would encounter difficulties, such

particular arrangements as may be most

suitable in the light of national requirements

and possibilities (27).

Article 12

The agricultural products to be enu-

merated in a common list shall be taxed at

a reduced rate or possibly at differential

reduced rates, in accordance with Article 7,

paragraph 2.

2. The Commission shall submit to the

Council, not later than 1 April 1966, pro-

posals concerning :

the common list of agricultural products

and the reduced rates applicable to these

products;

)

( 27 )

( 21)

See

(22) See

8 )

See

(") See

5 )

See

Annex

point 21.

point 22.

point 23.

point 24.

point 25.

(

See Annex A, point 26.

See Annex A, point 27.

kom (1965) 0144 - Ingen titel

methods of applying taxation on value

added such that they do not impair the

functioning of the common organization

of agricultural markets nor, in particular,

of the price systems involved therein;

transitional measures which Member

States may apply until the abolition of

fiscal boundaries.

2. After consultation with the Member

States, the Commission shall address to

the Member State concerned an appropriate

recommendation, if any.

3. If the Member States does not comply

with the recommendation addressed to it,

the Council shall, by qualified majority and

upon a proposal of the Commission, adopt

such measures as may be necessary to

obtain the objectives named in paragraph

of this Article, without prejudice to the

procedures provided for in the Treaty.

The Council shall take its decision prior

January

1967.

Article 13

In cases when a Member State is to

engage in consultations in accordance with

the provisions of this Directive itself or of

Annex A thereto, the Member State shall

refer the matter to the Commission in good

time to enable it to examine in advance,

together with the Member States, whether

the measures proposed by the Member

State concerned are not such as to distort

the conditions of competition among Mem-

ber States and to render subsequent har-

monization more difficult.

Article 14

The prov1s1ons contained in the Annexes

are integral parts of the present Directive.

Article 15

The present Directive is addressed to all

Member States.

ANNEX

Detailed Provisions

1. (referring to Article 1, paragraph 3)

a Member State intends to apply TV A in

an area not fully coinciding with the na-

tional territory, this Member State shall

engage in consultations in accordance with

Article

13.

2. (referring to Article 2)

The term "activity of production, trade or

performance of services" shall be understood

in the broad sense as encompassing all

possible economic activities, including,

therefore, those ot mining and quarrying,

agriculture, and the liberal professions.

Should a Member State propose, in the

framework of this Directive, not to tax

certain activities, it will be better to provide

for exemptions rather than to exclude the

persons exercising these activities from the

scope of the tax.

Member States have full discretion in inter-

preting the words "carries out an activity

of... occasionally".

The expression "On his own account" is

intended particularly to preclude taxation

of wage and salary earners bound to their

employer by a labour contract, including

persons working in their own home. This

wording also leaves each Member State

free to treat persons who are independent

from a juridical point of view but interlinked

by economic, financial or organizational

ties not as separate taxpayers, but as one

single taxpayer.

However, a Member

State proposing to adopt such treatment,

shall engage in consultations as under

Article 13.

The state, provinces, municipalities and

other bodies in public law are in principle

not to be regarded as liable to the tax, to

the extent that they exercise activities deriv-

ing from their functions as public author-

ities. However,' should these bodies exercise

activities of an industrial or commercial

nature such as could be exercised by private

enterprise, then they are liable to the tax

with respect to these activities.

Should a Member State propose, under

Article 2, paragraph 3 of the Directive of...,

kom (1965) 0144 - Ingen titel

to limit the scope of TVA to the stage up to

and including wholesale trade, this State

should engage in consultations as under

Article 13 with respect to the rules of

delimitation which are to be introduced in

national legislation in this connection.

3. (referring to Article 3, paragraph 1)

The term "tangible goods" shall be under-

stood to encompass both movable and

immovable tangible goods.

Deliveries of electricity, gas, heat, cold and

similar goods which are regarded as tan-

gible goods in the economy, are to be

treated as deliveries of goods.

4. (referring to Article 3, paragraph 2, a)

The term "hire-purchase" shall be under-

stood to mean a contract providing for

rent of a good during a certain time, and

containing a clause to the effect that

ownership of the good is to be acquired

on payment of the last instalment due.

However, for fiscal purposes this contract

shall not be considered as being partly a

letting and partly a sales contract, but shall,

from the moment of its conclusion, be

regarded as a sale involving taxable delivery.

5. (referring to Article 3, paragraph 2, c)

As regards the withdrawal of a good

purchased by a taxpayer, Member States

are free not to apply the tax but instead to

disallow the deduction or to rectify the

assessment in case the deduction has already

been allowed. Withdrawals for publicity

gifts of small value and for samples, which

may be imputed to overhead costs for

fiscal purposes, should not be treated as

taxable deliveries. Furthermore, the pro-

visions of Article 9, paragraph 2, shall

not be applicable to such withdrawals.

(referring to Articles 3, paragraph 2,j and g)

Member States which, for specific national

reasons, consider the transactions described

under

and

not as deliveries but

as services, are free to classify them as

services, subject to the explicit condition

of applying to them the standard tax rate

for deliveries.

The term "construction work" shall apply

in particular to :

the construction of buildings, bridges,

roads, ports, etc. in fulfilment of a works

contract;

earth works, and the making of gardens;

installation of plant and equipment

(central heating, baths, telephone exchanges,

shop counters, refrigerated show-cases,

etc.);

repairs to buildings, other than current

maintenance.

(referring to Article 3, paragraph 4)

In cases where there is an obligation to

deliver an invoice, the operative fact may

be connected with the moment when the

invoice is delivered or, at the latest, with

the moment when it should have been

delivered. ·

(referring to Article 4, paragraph

The definition of the term service given in

this provision implies that, among others,

the following should also be counted as

services :

cession of incorporeal goods;

fulfilment of an obligation to refrain

from doing something;

performance of a service by virtue of

official requisition;

6. (referring to Article 3, paragraph 2, d)

This provision is to be applied only in

order to establish tax equality, on the one

hand, for goods purchased and intended tor

the purposes of the firm and creating no

claim for immediate and full deduction,

and on the other hand, fot goods manu-

factured or extracted by the firm itself or

on its account by a third person and also

used for the same purposes.

work done to a movable good other

than made-to-order work within the

meaning of Article 3, paragraph 2,

such

as repairs, the services of a laundry, etc.

The definition of services in this paragraph

does not prejudge the right ot Member

States to tax certain services performed by

a taxpayer as "services to self", whenever

this should be found necessary in order to

prevent distortions in competition.

kom (1965) 0144 - Ingen titel

10. (referring to Article 4, paragraph 2)

Member States shall as far as possible

abstain from exempting any of the services

enumerated in Annex

As regards other services, Member States

shall be free to apply, without prior con-

sultation, either the provisions of this

Directive concerning the taxation of ser-

vices or any other

~ystem.

11. (referring to Article 4, paragraph 3)

A service shall be deemed to be located

within the country of the performer of the

service so long as the performer of the

service does not prove that the service

rendered, the right assigned or granted, or

the good leased is used or exploited abroad.

Services consisting of a repair or some

other material work done to a tangible good

shall be deemed to be used or exploited at

the place where the good is intended to be,

wholly or mainly, used or exploited.

Transport services shall be deemed to be

used or exploited within the territory of

the Member State where the transport takes

place, and, when transport takes place in

the territory of two or more Member

States, within the territories of these

Member States in proportion to the respec-

tive distances covered in each.

For services performed in intra-Community

relations, it is provided that, notwithstand-

ing anything to the contrary laid down in

Article 4, paragraph 3 :

services performed by brokers, forward-

ing and other agents, and other inter-

mediaries shall be deemed to be located at

the place where the intermediary concerned

wholly or mainly performs the service;

the beneficiary of the service may be

held jointly responsible for payment of the

tax due, whenever this beneficiary is liable

to TVA, without prejudice to other meas-

ures which the Member State to which

the tax is due might adopt to ensure

payment.

The criteria laid down in these provlSlons

for the determination of the location of a

service shall be without prejudice to the

criteria used ±or the abolition of rectrictions

on the freedom to provide services within

the meaning of Articles 59 to 66 of the

Treaty.

12. (referring to Article 5, paragraph 2)

Without prejudice to the provisions of

Article 1, paragraph 2,

Article 5, Article

Article 7, paragraph 3, and Article 10,

paragraph 5, each Member State may,

subject to consultations in accordance

with Article 13, apply to the collection of

TV A on imports the rules governing

collection of customs duties, including

levies, provided the character of the tax is

preserved.

13. (referring to Article 6)

A Member State which levies TV A only

up to and including the stage of wholesale

trade may provide that, for a taxpayer's

sale of goods at retail, the tax base shall

be reduced by a certain percentage; however,

this reduced base shall not be less than the

purchase price or cost of production in-

creased, as the case may be, by all duties,

taxes, dues and other levies to which the

good is subject, except TVA itselt, even in

case of suspended payment.

It is left to Member States to define the

concept of "sale of goods at retail" in

accordance with national conceptions.

14. (referring to Article 6, a)

The term "counterpart" shall be understood

to mean everything given in counterpart

for a delivery of goods or a service, that is,

not only agreed sums of money including

incidental expenses (for packing, transport,

insurance, etc.), but also, for example,

the value of goods given in exchange or,

in case of requisition, the amount of com-

pensation actually received.

The preceding provision does not pre-

clude that any Member State which consid-

ers it necessary in the interest of more

publicity services shall be deemed to be

located at the place of the establishment on

whose account the service was ordered.

In case a service is deemed to be located

in a Member State other than that where

the establishment performing the service

is situated,

the latter Member State may consider

the service to be located at the place of

this establishment whenever the performer

of the service cannot prove that TVA due

in the other Member State has already been

paid; the application of this provision does

not, however, preclude taxation by that

other Member State;

kom (1965) 0144 - Ingen titel

neutrality of tax effects on competition,

may, if need be, exclude from the tax base

such incidental expenses as arise beyond

the location of delivery as defined in

Article 3, paragraph 3, and may tax these

incidental expenses instead as the counter-

part of a service.

Expenses paid in the name, for account

and on the order of the buyer and carried

in the books of the supplier in contra

accounts shall not enter into the tax base.

Similarly, customs duties and other dues,

taxes, etc., on imports, paid in their own

name by agents and other intermediaries

in customs clearence, including forwarding

agents, may be excluded from the tax base

for their services.

goods are not yet delivered or the services

not yet performed.

20. (referring to Article 9, paragraph 2)

The pro rata rule shall in principle be

applied on the basis of the general turnover

proportions as determined for the whole

of a taxpayer's transactions. Exceptionally,

a taxpayer may be authorized by the admin-

istration to apply special turnover pro-

portions for certain sections of his activities.

21. (referring to Article 9, paragraph 3)

During a certain transitional period each

Member State shall be free to apply deduc-

tions for capital goods in annual instal-

ments (pro rata temporis deductions).

15. (referring to Article 6, c)

After the abolition of customs duties in

intra-Community trade, each Member State

can apply to imports of goods within such

trade a tax base corresponding as closely

as possible to the tax base adopted for

deliveries within the country.

16. (referring to Article

paragraph 2)

To the extent of recourse to the provisions

of this paragraph with respect to transport

services as under Annex B, point 5, these

provisions shall be so applied as to safe-

guard equal treatment for different mean

of transport.

22. (referring to Article 9, paragraph 3)

Member States have discretion to fix cer-

tain tolerances in order to limit the occur-

rence of cases of rectification arising from

changes in the annual turnover proportions

in relation to the initial turnover propor-

tions underlying deductions with respect to

capital goods.

17. (referring to Article 8, paragraph 1)

Exemption under this provision is intended

to apply to the delivery of a good exported

directly, that is, to the last delivery prior

to despatch or transport of the good out-

side the country. Member States are free,

however, to extend exemption also to

delivery at the preceding stage.

23. (referring to Article 9, paragraph 5)

Member States are free

adopt special

provisions to the effect that any excess

accumulated by taxpayers whose business

is mainly in export shall be refunded before

the end of the calendar year.

24. (referring to Article 10, paragraph 2)

18. (referring to Article 8, paragraph 3)

To the extent of recourse to the provisions

of this paragraph with respect to transport

services as under Annex B, point 5, these

provisions shall be so applied as to safe-

guard equal treatment for different means

of transport.

Member States shall themselves fix, in

accordance with their established practice

and on the basis of usage and custom in

different branches of the economy, the

time limits within which invoices are to

be delivered to buyers.

19. (referring to Article 9, paragraph 1 a)

In cases provided for in Article 3, para-

graph 4, second sentence, and in Article 4,

second sentence, deductions may be effected

as of receipt of the invoice even if the

25. (referring to Article 10, paragraph 2)

Each Member State may, in special cases,

provide for waivers to the provisions of

the second sentence of this paragraph, but

these waivers should be strictly limited.

kom (1965) 0144 - Ingen titel

26. (referring to Article 10, paragraph 2 d)

Notwithstanding any other measures to be

taken by Member States to enforce payment

of the tax and to prevent tax evasion, every

person, whether a taxpayer or not, shall

pay the amount of TV A he records in any

invoice.

2 7. (referring to Article 11)

To the extent of recourse to the provisions

of this Article with respect to transport

services as under Annex B, point 5, these

provisions shall be so applied as to safeguard

equal treatment for different means of

tiansport.

ANNEX

List of services referred to in Art. 4, par. 2

Assignment of patents, trade marks and

similar rights, as well as the granting of

licence concerning these rights.

7. Making personnel available to a tax-

payer.

8. Banking transactions on behalf of a

taxpayer.

Services of consultants, engineers,

planning bureaux and similar offices, in the

technical, economic and scientific field.

10. Fulfilment of an obligation not to

exercise, wholly or partly, a professional

activity or a right enumerated in this list.

11. Services of brokers, independent inter-

mediaries, commercial agents and for-

warding agents in connection with trans-

actions involving goods or the services

enumerated in this list.

2. Work done to tangible goods and on

behalf of a taxpayer, other than provided

for in Article 3, paragraph 2,

3. Services in preparation, or concerned

with the progress, of construction work,

such as the services of architects, on-site

supervision of construction work, etc.

Commercial advertising.

5. Transport of goods and their storage,

together with ancillary services.

6. Leasing of movable tangible goods to a

taxpayer.

Proposal for a Council directive

concerning measures to prevent the importation

of plant pests into Member States

(submitted by the Commission to the Council on 31 March 1965)

The Council

Community,

of the

European

Economic

Whereas

the yields ot plant production are

continually compromised by plant pests

of animal or vegetable origin as well as by

viruses;

Whereas

protection against plant pests

serves not only to prevent any diminution

of productive capacity, but also to raise

the productivity of agriculture;

Whereas

pest control through methodical

destruction on the spot within any one

country would be of limited effectiveness

in the absence of simultaneo\l'S measures

to prevent the importation of pests from

outside;

Having regard to

the provisions of the

Treaty setting up the European Economic

Community and in particular Article 43

thereof;

Having regard to

the proposal of the

Commission;

Having regard to

the opinion of the European

Parliament;

Whereas

plant production is of eminent

importance in the European Economic

Community;