(1)

By Decision 2000/746/EC (2), the Council authorised the French Republic, by way of derogation from Article 11(A)(1)(a) of Directive 77/388/EEC, to include in the taxable amount of a supply of goods or a supply of services the value of any gold used by the supplier and provided by the recipient in cases where the supply of the gold to the recipient is exempt in accordance with Article 26b of Directive 77/388/EEC.

(2)

The aim of that derogation was to avoid abuse of the exemption for investment gold and thus to prevent certain types of tax evasion or avoidance.

(3)

By letter registered with the Secretariat-General of the Commission on 6 July 2004, the French Government requested an extension of Decision 2000/746/EC, which expires on 31 December 2004.

(4)

In accordance with Article 27(2) of Directive 77/388/EEC, the Commission informed the other Member States by letter dated 10 August 2004 of the request made by the French Republic and notified the French Republic that it had all the information it considered necessary for appraisal of the request.

(5)

According to the French authorities, the derogation authorised by Decision 2000/746/EC has been effective in achieving the aims stated above.

(6)

The derogations pursuant to Article 27 of Directive 77/388/EEC which counter VAT avoidance linked to the exemption for investment gold may be included in a future proposal for a directive rationalising some of the derogations pursuant to that Article.

(7)

It is therefore necessary to extend the validity of the derogation granted under Decision 2000/746/EC until the entry into force of a directive rationalising the derogations pursuant to Article 27 of Directive 77/388/EEC which covers the avoidance of value added tax linked to the exemption for investment gold or until 31 December 2009, whichever is the earlier.

(8)

The derogation will have no negative impact on the European Communities' own resources provided from VAT,