Considerations on COM(2008)753 - Authorisation of the Czech Republic and Germany to derogate from Article 5 of the VAT Directive

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dossier COM(2008)753 - Authorisation of the Czech Republic and Germany to derogate from Article 5 of the VAT Directive.
document COM(2008)753 EN
date February 10, 2009
 
table>(1)By letters registered with the Secretariat-General of the Commission on 19 May 2008, the Czech Republic and the Federal Republic of Germany requested authorisation to apply special tax measures in relation to the construction and maintenance of certain border bridges between the two countries on the basis of the Agreement concluded between the Czech Republic and the Federal Republic of Germany on the responsibility for the construction and maintenance of cross-border bridges (the Agreement).
(2)In accordance with Article 395(2) of Directive 2006/112/EC, the Commission informed the other Member States by letter dated 2 October 2008 of the requests made by the Czech Republic and the Federal Republic of Germany. By letter dated 7 October 2008, the Commission notified the Czech Republic and the Federal Republic of Germany that it had all the information necessary to consider the requests.

(3)The purpose of the special measures is for supplies of goods and services and intra-Community acquisitions of goods intended for the construction and maintenance of the cross-border bridges in question, which according to the VAT rules are to be located in the Member State where the bridge stands, to be subject to the value added tax of the Member State that is responsible for their construction or maintenance in accordance with the Agreement which makes provision for the division of responsibility.

(4)In the absence of special measures it would be necessary, according to the principle of territoriality, for each supply of goods and services and intra-Community acquisition of goods to ascertain whether the place of taxation was the Czech Republic or the Federal Republic of Germany. Work at a border bridge carried out on Czech territory would be subject to value added tax in the Czech Republic while work carried out on German territory would be subject to German value added tax.

(5)The purpose of the derogation is therefore to simplify the procedure for charging value added tax on the construction and maintenance of the bridges in question by considering each bridge as being solely on the territory of the Member State that is responsible for its construction or maintenance in accordance with the Agreement.

(6)The cross-border bridges existing or planned at the time of adoption of the Agreement are set out in the Annex to this Decision. However, additional bridges may be brought within the scope of the Agreement in the future by an exchange of diplomatic notes and the derogation should therefore also apply to such additional bridges in accordance with the Agreement as extended.

(7)The derogation will have no negative impact on the Community’s own resources provided from value added tax,