WRITTEN QUESTION E-1936/96 by Enrico Ferri (PPE) and Pier Casini (PPE) to the Council (17 July 1996)

Subject: Preventing value-added tax from being charged on national and regional taxes on the consumption of methane gas

The inclusion of value-added tax as well as national and regional consumption taxes in the taxable amount applicable to supplies of methane gas pursuant to Article 10 of Decree Law No 15/977 has led to disparities in treatment at Community level and given rise to serious doubts about the legality of such action at national level.

Italian consumers pay more for methane gas than consumers in any other country owing not only to the cost of the raw material but, above all, to a steady increase in the burden of taxation which, in the space of only a few years, has risen to over half of the consumer price.

The sixth directive on the harmonization of the laws of the Member States with a view to establishing a 'common system of value-added tax' (Directive 77/388/EEC ((OJ L 145, 13.6.1977, p. 1. ))) states explicitly and unequivocally that 'the taxable amount shall include: (a) taxes, duties, levies and charges, excluding the value-added tax itself' (Title VIII, Article 11(2)).

In view of the position regarding legislation in the various Member States, the only way of derogating from the generally accepted principle that taxes may be levied on other taxes is by means of Community legislation.

Given the above, would the Council take the necessary steps with a view to the adoption of a directive amending the relevant national legislation so as to prevent (where possible) VAT from being charged on national and regional consumption taxes applying to supplies of methane gas?

Reply (10 October 1996)

The explanation for the provisions mentioned by the Honourable Members concerning the taxable amount for VAT is that value added tax is a general tax on consumption affecting all the components of the price of a given product apart from VAT itself. The same rules moreover apply not only to transactions within a country but also to the import and purchase of goods within the Community.

Any amendment to that legislation can be envisaged by the Council only on the basis of a Commission proposal but the Council has received no proposal to that effect.