Legal provisions of COM(2003)397 - Amendment of Directive 77/388/EEC as regards reduced rates of VAT

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dossier COM(2003)397 - Amendment of Directive 77/388/EEC as regards reduced rates of VAT.
document COM(2003)397 EN
date February 14, 2006

Contents

Article 1

Directive 77/388/EEC is hereby amended as follows:

1.Article 12 shall be amended as follows:

(a)paragraph 3(b) shall be replaced by the following:

‘(b)Member States may apply a reduced rate to supplies of natural gas, electricity and district heating provided that no risk of distortion of competition exists. A Member State intending to apply such a rate must inform the Commission before doing so. The Commission shall give a decision on the existence of a risk of distortion of competition. If the Commission has not taken that decision within three months of the receipt of the information a risk of distortion of competition is deemed not to exist.’;

(b)in paragraph 4, the following subparagraph shall be inserted:

‘By 30 June 2007 at the latest the Commission shall present to the European Parliament and the Council an overall assessment report on the impact of reduced rates applying to locally supplied services, including restaurant services, notably in terms of job creation, economic growth and the proper functioning of the internal market, based on a study carried out by an independent economic think-tank.’;

2.Article 28(6) shall be amended as follows:

(a)the first subparagraph shall be replaced by the following:

‘The Council, acting unanimously on a proposal from the Commission, may authorise any Member State to apply until 31 December 2010 at the latest the reduced rates provided for in the third subparagraph of Article 12(3)(a) to services listed in a maximum of two of the categories set out in Annex K. In exceptional cases, a Member State may be authorised to apply the reduced rates to services belonging to three of the aforementioned categories.’;

(b)the fourth subparagraph shall be replaced by the following:

‘Any Member State wishing to apply for the first time after 31 December 2005 a reduced rate to one or more of the services mentioned in the first subparagraph pursuant to this provision shall inform the Commission before 31 March 2006. It shall communicate to it before that date all relevant particulars concerning the new measures it wishes to introduce, and in particular the following:

(a)scope of the measure and detailed description of the services concerned;

(b)particulars showing that the conditions laid down in the second and third subparagraphs have been met;

(c)particulars showing the budgetary cost of the measure envisaged.’

Article 2

This Directive shall enter into force on the day of its publication in the Official Journal of the European Union.

It shall be applicable as from 1 January 2006.

Article 3

This Directive is addressed to the Member States.