Keywords
Summary

Keywords

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Tax provisions ° Harmonization of laws ° Turnover taxes ° Common system of value added tax ° Sixth Directive ° Territorial scope ° Transport services carried out in the territory of the Member States ° Round trips within territorial and international waters ° Requirement to tax that part of the journey within territorial waters ° Failure to fulfil obligations ° Justification ° None

(Council Directive 77/388, Arts 2, 9(2) and 28(5))

Summary

The specific connection rule for transport services laid down in Article 9(2)(b) of the Sixth Directive 77/388 on the harmonization of the laws of the Member States relating to turnover taxes is intended to ensure that each Member State taxes transport services as regards the parts of the journey carried out in its territory. Accordingly, a Member State fails to fulfil its obligations under that provision and Article 2 of the directive where it exempts from value added tax sea voyages in vessels flying the national flag which do not put in at a foreign port as regards the part of the journey within its territorial waters. The defaulting Member State cannot justify its failure in that respect by relying on the practical difficulties confronting it, on the fact that the taxable amounts in question would be negligible, on the absence of the definitive rules for charging VAT on passenger transport provided for in Article 28(5) of the Sixth Directive or on the exemption applying to international maritime transport and trips organized by undertakings from non-member countries.