Keywords
Summary

Keywords

Tax provisions - Harmonisation of laws - Turnover taxes - Common system of value added tax - Power of Member States to maintain certain exemptions on a transitional basis - Scope - Reduction of the material scope of exemptions - Whether permissible

(Council Directive 77/388, Arts 4(3) and 28(3)(b) and Annex F, point 16)

Summary

$$In relation to the supply of building land, a Member State is entitled to exempt that supply under Article 28(3)(b) of the Sixth Directive 77/388, read in conjunction with point 16 of Annex F thereto, notwithstanding the fact that, on the one hand, it has since the adoption of that directive introduced an election to waive the value added tax exemption in respect of such supplies and, on the other hand, it has reduced the material scope of the exemption applicable to such supplies so that some previously exempt supplies are now subject to value added tax.

The amendments made by the Member State concerned have not widened the scope of the exemption; on the contrary, they have reduced it. Consequently, they were not adopted in disregard of the wording of Article 28(3)(b). Whilst that provision precludes the introduction of new exemptions or the extension of the scope of existing exemptions following the entry into force of the Sixth Directive, it does not prevent a reduction of those exemptions, since their abolition constitutes the objective pursued by Article 28(4) of the Sixth Directive.