to: Working Party on Tax Questions – Indirect Taxation (VAT)
Subject: Proposal for a Council Directive on the common system of value added tax
= Presidency compromise
(74) The application of the normal VAT rules to gold constitutes a major obstacle to its use for financial investment purposes and therefore justifies the application of a specific tax scheme, with a view also to enhancing the international competitiveness of the Community gold market.
(75) The supply of gold for investments purposes is inherently similar to other financial investments which are exempt from VAT. Consequently, exemption appears to be the most appropriate tax treatment for supplies of investment gold.
(76) The definition of investment gold should cover gold coins the value of which primarily reflects the price of the gold contained. For reasons of transparency and legal certainty, a yearly list of coins covered by the investment gold scheme should be drawn up, providing security for the operators trading in such coins. That list should be without prejudice to the exemption of coins which are not included in the list but which meet the criteria laid down in this Directive.
(77) Although a tax exemption does not, in principle, allow for the deduction of input tax, it is appropriate, in view of the fact that tax on the value of the gold may be charged on previous transactions, to allow the deduction of such input tax in order to guarantee the advantages of the special scheme and to prevent the distortion of competition with regard to imported investment gold.
(78) Since gold may be used for both industrial and investment purposes, operators should be able to opt for normal taxation.
(79) In order to prevent tax evasion common it is desirable to lay down rules concerning the minimum obligations incumbent upon operators as regards accounting and the records to be kept.
(80) In order to prevent tax evasion while at the same time alleviating the financing charge for the supply of gold of a degree of purity above a certain level, it is justifiable to allow Member States to designate the customer as the person liable for payment of VAT.
(81) In view of the huge number of transactions carried out on a regulated bullion market and the speed with which they are effected, Member States must be allowed to disapply the special scheme, to suspend collection of VAT and to relieve operators of certain accounting requirements.
(82) In order to facilitate compliance with fiscal obligations by operators providing electronically supplied services, who are neither established nor required to be identified for VAT purposes within the Community, a special scheme should be established. Under that scheme it should be possible for any operator supplying such services by electronic means to non-taxable persons within the Community, if he is not otherwise identified for VAT purposes within the Community, to opt for identification in a single Member State.
(83) If a non-established operator wishes to be covered by the special scheme, he must comply with the requirements laid down therein, and with any relevant provision in force in the Member State where the services are consumed.
(84) It should be possible, in certain circumstances, for the Member State of identification to exclude a non-established operator from the special scheme.
(85) Where the non-established operator opts for the special scheme, any input VAT that he has paid with respect to goods or services used by him for the purposes of his taxed activities falling under the special scheme must be refunded by the Member State in which the input VAT was paid, in accordance with the arrangements laid down in Council Directive 86/560/EEC of 17 November 1986 on the harmonisation of the laws of the Member States relating to turnover taxes – arrangements for the refund of value added tax to taxable persons not established in Community territory1. The optional restrictions on refund provided for in that Directive must not be applied.
(86) Save in the case of provisions pertaining to the lodging of electronic tax returns and statements, it is desirable to adopt temporary provisions concerning radio and television broadcasting and certain electronically supplied services. Those temporary provisions should, in any event, be reviewed in the light of experience within three years of 1 July 2003.
Exemptions on importation
Exemptions for other activities
1. Member States shall exempt the following transactions:
(k) the importation of gold by central banks;
Exemptions relating to certain transactions treated as exports
Member States shall exempt the supply of gold to central banks.
[Mrt: ...& much more! There are very many issues covered in this document. The picked parts are just a teaser for checking it out.]
[Mrt: This is a 345 pages huge doc which has GREAT deal of information....!!!]
[Mrt: Got Dean´s prize for comparative study of EU 2 members tax systems, but the first theme of my thesis was EU tax harmonization so this paper is close; nostalgia :o)]