WRITTEN QUESTION E-0119/00 by Michl Ebner (PPE-DE) to the Commission. Turnover tax on passenger transport ‐ EU Directive 77/388/EEC of 17 May 1977.
28. 12. 2000 EN Official Journal of the European Communities C 374 E/25 (2000/C 374 E/030) WRITTEN QUESTION E-0106/00 by Juan Ojeda Sanz (PPE-DE) to the Commission (26 January 2000) Subject: Financial support for infrastructure in the applicant countries of Central and Eastern Europe ü quality of projects Given that the European Union provides considerable economic support to the applicant countries in Central and Eastern Europe in order to improve the level and quality of their infrastructure in preparation for an enlarged single market (Phare programme, Ispa instrument), will the Commission draw up technical recommendations to be taken into account in infrastructure projects for which funding is provided so as to ensure a level of quality which will guarantee interoperability between those networks and Union networks? Answer given by Mr Barnier on behalf of the Commission (24 March 2000) Assistance under the Instrument for structural policies for pre-accession (ISPA) is available for transport infrastructure projects that also promote sustainable mobility, as well as for environment measures. Energy and telecommunications projects can be financed through PHARE. Transport projects eligible for support from ISPA will enable beneficiary countries to comply with the acquis that exists in this sector. ISPA will also contribute to achieving the objectives of the accession partnerships as well as to the interconnection and interoperability of national transport networks and the construction of the Trans-European transport networks together with access to these networks. The Commission has drawn up a reference framework for the funding of transport infrastructure under ISPA. This document, which was examined by the ISPA management committee in December 1999, sets out conditions determining the eligibility of projects for funding under ISPA. All modes of transport are eligible for assistance, although railway transport will be favoured on the grounds of encouraging sustainable mobility. Priority will be given to projects to improve interconnection and interoperability. Assistance for the technical preparation of projects for assistance is available in an effort to improve quality. In the telecommunications sector, candidate countries are required to adopt the acquis which includes the relevant European and international standards. The Phare multi-country programmes have provided training in this area. Community policy in this field is to encourage private capital participation in the development of the sector such as the international financial institutions and commercial banks. The risks to investors are reduced by the insistence on the adoption of the stable regulatory framework defined in the acquis. Interoperability with and between candidate countries has largely been achieved. (2000/C 374 E/031) WRITTEN QUESTION E-0119/00 by Michl Ebner (PPE-DE) to the Commission (27 January 2000) Subject: Turnover tax on passenger transport ü EU Directive 77/388/EEC of 17 May 1977 Directive 77/388/EEC (1) of 17 May 1977 refers to turnover tax on passenger transport. At present only three of the fifteen Member States (Austria, Germany and Belgium) have transposed this directive and levy turnover tax on passenger transport through their territory. This imposes extra red tape and cost on passenger transport operators offering passenger transport through these three countries. This state of affairs is hardly compatible with the principles of freedom of movement and the promotion of cross- border activities. C 374 E/26 Official Journal of the European Communities EN 28. 12. 2000 ü The aim of the European Community is harmonisation and the creation of equal conditions for all Member States. Is this being achieved with the transposition of Directive 77/388 of 17 May 1977? ü Is it conducive to European integration for only three of the fifteen Member States to have transposed Directive 77/388/EEC? ü Transport operators from Austria, Germany and Belgium are able to cut costs as they do not have to pay turnover tax on passenger transport through other EU countries. Does the implementation of this EU directive therefore constitute a distortion of free competition? (1) OJ L 145, 13. 6. 1977, p. 1. Answer given by Mr Bolkestein on behalf of the Commission (14 March 2000) The basic rule for the taxation of passenger transport is Article 9. 2(b) of Directive 77/388/EEC (1) which states that The place where transport services are supplied shall be the place where transport takes place, having regard to the distance travelledí. Under this rule Member States can apply a positive rate of VAT to intra-Community and international passenger domestic passenger transport and to domestic legs of transport. However, there are a certain number of derogations from this basic rule, including those negotiated by Member States when joining the Community. The main causes of variation are that the Sixth Directive permits Member States to apply one or two reduced rates of VAT (of not less than 5 %) to supplies of specific goods and services (passenger transport services are included in this category ü Article 12, 3, (a) and Annex H, 5) and that Member States applying reduced rates lower than the minimum fixed by the Directive are permitted to continue to do so provided those rates were in force on 1 January 1991 (this enables Member States to retain zero rates or super-reduced rates for passenger transport ü Article 28, 2) and finally that a Member State may continue to exempt passenger transport services, under the conditions existing in that Member State (Article 28, 3, (b) and Annex F, 17). All Member States have transposed the Sixth VAT Directive into their national legislation, but there may still be different rules of application in the Community. Because of this disparity of treatment of passenger transport, the Commission presented a proposal for a Council directive (2) in 1992, which aimed to establish detailed rules for the common application of VAT to passenger transport services on the roads and internal waterways of the Community. The proposal was to maintain existing VAT rates and exemptions but to determine the place of taxation as the place from where the passenger transport started. Unfortunately, the proposal was not adopted by the Council, and the Commission withdrew its proposal by Decision 97/C 2/02. In view of the difficulties encountered when trying to create a uniform taxation scheme for all kind of passenger transport, the Commission decided to launch a study to gain a better understanding of the economic data and practical consequences of taxation in the whole field of passenger transport. The study was to aid the Commission in preparing a report for Parliament and Council on the overall situation regarding VAT and passenger transport, taking into account the developments in the transport sector and having regard for the proper functioning of the single market. The report by the consultant in charge of this study was presented in 1998 and has been made public by the Commission. In the framework of reviewing the overall VAT strategy in order to improve the functioning of the VAT system, the Commission will take this question into account when preparing this new programme and determining its future priorities in the field of VAT. (1) The Sixth Council Directive of 17 May 1977 on the harmonization of the laws of the Member States relating to turnover taxes ü common system of value added tax: uniform basis of assessment ü OJ L 145, 13. 6. 1977. (2) COM(92) 416 final