WRITTEN QUESTION P-0162/00 by Françoise Grossetête (PPE-DE) to the Commission. Common VAT system ‐ Deductions.
C 280 E/190 Official Journal of the European Communities EN 3. 10. 2000 How does the Commission plan to proceed with this study? Will it ask an external body to carry out the study? If not, which service or directorate-general will be responsible for the study? Will the Commission involve the European Parliament? If so, in what way, and which bodies or committees will it contract? How will the Commission coordinate this study and its recommendations with the work done by Commissioner Kinnock on a Communication on Strategic Reform? What is the timetable for the study? Answer given by Mrs Reding on behalf of the Commission (23 February 2000) The Commission has taken note of the conclusions regarding information policy as agreed at the European Council meeting in Helsinki of 10-11 December 1999 and has started its preparations for a communica- tion on the Dialogue with Citizensí. The new strategy will be based on partnerships with Member States and the civil society and make use of appropriate decentralized networks in the Member States. The Parliament will be fully associated in the process. The new communication strategy which will be developed in the perspective of the broader reform of the Commission will be presented in the near future. (2000/C 280 E/221) WRITTEN QUESTION P-0162/00 by Françoise GrossetŒte (PPE-DE) to the Commission Subject: Common VAT system ü Deductions (26 January 2000) Articles 17-19 of Directive 77/388/EEC (1) constitute a major source of controversy and interpretational problems for businessmen. Does the Commission agree with the interpretations put forward in respect of the following issues: ü Article 17 of Directive 77/388/EEC would never authorise the deduction of VAT charged on expenditure incurred with a view to the acquisition of shares in another company; ü when a taxable personís business activities involve simultaneously activities which are exempt from taxation and activities which are subject to taxation, the structure of Directive 77/388/EEC is such that, as regards the calculation of the proportion which is VAT deductible, the criterion of actual assignment must be applied rather than a general proportion for deduction calculated; ü while, pursuant to Article 17(6) of Directive 77/388/EEC, deduction of VAT on the purchase of cars is restricted, even where such vehicles are used exclusively for a business activity subject to taxation, delivery or subsequent hire to which VAT is applied by the taxable person must take account of the VAT not deducted at the previous stage; ü Directive 77/388/EEC provides for a common system for deliveries of goods or provision of services for the taxable personís own use, but the Member States may derogate from that common system in application of Article 17(6) of the Directive; ü the deduction of VAT provided for in Article 17 of Directive 77/388/EEC may be subject to an act of the tax authorities subsequent to the time when the right of deduct arose, determining the amount of the VAT due and authorising reimbursement of the tax paid; ü where a retailer decides to embellish the pavement area outside his shop by installing a bench and plant containers with a view to attracting customers, the VAT payable on the cost of such embellish- ment of the pavement area is deductible, even though the work involved does not exclusively benefit his customers; 3. 10. 2000 EN Official Journal of the European Communities C 280 E/191 ü a Member State may not extend the period for monitoring the correct collection of the tax to 8 years from the date on which VAT became chargeable while simultaneously restricting the right to VAT deduction claimed by the tax authorities following such monitoring to no more than 5 or 3 years from the date on which VAT became chargeable. (1) OJ L 145, 13. 6. 1977, p. 1. Answer given by Mr Bolkestein on behalf of the Commission (17 February 2000) As the Commission informed the Honourable Member in its answer to Written Questions P-2500/99 and P-2751/99 (1), the issue it raises concerns a number of very specific and complex cases of interpretation of Community VAT legislation. A detailed analysis of Articles 17 to 19 of the Sixth VAT Directive (2) is therefore required to decide what tax treatment to apply. A detailed case-by-case examination will have to be made given the size and specific nature of the request which covers a vast list of transactions and practical cases. The Commission would point out to the Honourable Memberís that such a detailed reply will require lengthy and painstaking research that it is unable to undertake at present and which goes far beyond the scope of an answer to a written question. (1) OJ C 225 E, 8. 8. 2000, p. 152. (2) OJ L 145, 13. 6. 1977. (2000/C 280 E/222) WRITTEN QUESTION E-0166/00 by Rosa Díez GonzÆlez (PSE), Fernando PØrez Royo (PSE) and Luis Berenguer Fuster (PSE) to the Commission (31 January 2000) Subject: Effects of state aid on the Spanish electricity sector Given the enviable economic and financial situation of Spanish electricity companies receiving competition transition costs (CTC), what measures will the Commission take to link the payment of eligible CTC to the financial and economic viability of companies? Does it plan to assess the impact of and need for CTC at the level of consolidated companies or by individual assets? Answer given by Mr Monti on behalf of the Commission (9 March 2000) The Commission takes the view that, to rank as a stranded cost, a given investment or contract must become uneconomic as a result of the liberalisation of the electricity market provided for in Parliament and Council Directive 96/92/EC of 19 December 1996 concerning common rules for the internal market in electricity (1) and must significantly affect the competitiveness of the company concerned. The Com- mission analyses stranded costs on an asset-by-asset basis before determining their impact on the competitiveness of consolidated companies. (1) OJ L 27, 30. 1. 1997