Directive 2003/92 - Amendment of Directive 77/388/EEC as regards the rules on the place of supply of gas and electricity - Main contents

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Legal instrument	Directive
Number legal act	Directive 2003/92
Original proposal	COM(2002)688
CELEX number i	32003L0092

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Council Directive 2003/92/EC of 7 October 2003 amending Directive 77/388/EEC as regards the rules on the place of supply of gas and electricity

Official Journal L 260 , 11/10/2003 P. 0008 - 0009

Council Directive 2003/92/EC

of 7 October 2003

amending Directive 77/388/EEC as regards the rules on the place of supply of gas and electricity

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article 93 thereof,

Having regard to the proposal from the Commission(1),

Having regard to the opinion of the European Parliament(2),

Having regard to the opinion of the European Economic and Social Committee(3),

Whereas:

• (1) 

  Increasing liberalisation of the gas and electricity sector, aimed at completing the internal market for electricity and natural gas, has revealed a need to review the current VAT rules on the place of supply of those goods, set out in the Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes - Common system of value added tax: uniform basis of assessment(4), in order to modernise and simplify the operation of the VAT system within the context of the internal market, a strategy to which the Commission is committed.

• (2) 

  Electricity and gas are treated as goods for VAT purposes, and, accordingly, the place of their supply with respect to cross-border transactions has to be determined in accordance with Article 8 of Directive 77/388/EEC. However, since electricity and gas are difficult to track physically it is particularly difficult to determine the place of supply under the current rules.

• (3) 

  In order to attain a real internal market for electricity and gas without VAT obstacles, the place of supply of gas through the natural gas distribution system and of electricity, before the goods reach the final stage of consumption, should be determined to be the place where the customer has established his business.

• (4) 

  The supply of electricity and gas in the final stage, from traders and distributors to final consumer, should be taxed at the place where the customer has effective use and consumption of the goods, in order to ensure that taxation takes place in the country where actual consumption takes place. This is normally the place where the meter of the customer is located.

• (5) 

  Electricity and gas are supplied through distribution networks, to which network operators provide access. In order to avoid double or non-taxation, it is necessary to harmonise the rules governing the place of supply of the transmission and transportation services. Access to and use of the distribution systems and the provision of other services directly linked to these services should therefore be added to the list of specific instances set out in Article 9, paragraph 2(e) of Directive 77/388/EEC.

• (6) 

  The import of gas through the natural gas distribution system, or of electricity, should be exempted in order to avoid double taxation.

• (7) 

  Those changes in the rules governing the place of supply of gas through the natural gas distribution system, or of electricity, should be combined with a compulsory reverse charge when the customer is a person identified for VAT purposes.

• (8) 

  Directive 77/388/EEC should therefore be amended accordingly,

HAS ADOPTED THIS DIRECTIVE:

Article 1

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

• 1. 

  in Article 8(1), the following points are added:

"(d) in the case of the supply of gas through the natural gas distribution system, or of electricity, to a taxable dealer: the place where that taxable dealer has established his business or has a fixed establishment for which the goods are supplied, or, in the absence of such a place of business or fixed establishment, the place...

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