Keywords
Summary

Keywords

1 . TAX PROVISIONS - HARMONIZATION OF LAWS - TURNOVER TAXES - COMMON SYSTEM OF VALUE ADDED TAX - SIXTH DIRECTIVE - TERRITORIAL SCOPE - SUPPLY OF SERVICES - PRINCIPLE - EXCEPTIONS

( COUNCIL DIRECTIVE NO 77/388/EEC , ARTS 2 , 3 AND 9 )

2 . TAX PROVISIONS - HARMONIZATION OF LAWS - TURNOVER TAXES - COMMON SYSTEM OF VALUE ADDED TAX - SIXTH DIRECTIVE - TERRITORIAL SCOPE - TAXATION BY A MEMBER STATE OF TRANSPORT SERVICES EFFECTED BETWEEN TWO POINTS WITHIN THE NATIONAL TERRITORY BUT PARTLY OUTSIDE THAT TERRITORY - PERMISSIBILITY - CONDITION - NO ENCROACHMENT ON THE TAX JURISDICTION OF OTHER STATES

( EEC TREATY , ART . 227 ; COUNCIL DIRECTIVE NO 77/388/EEC , ARTS 3 AND 9 ( 2 ) ( B ))

Summary

1 . WITHIN THE GENERAL SCHEME OF THE SIXTH DIRECTIVE ( NO 77/388/EEC ) ON THE HARMONIZATION OF THE LAWS RELATING TO TURNOVER TAXES , ARTICLE 9 , WHICH DETERMINES THE PLACE WHERE SERVICES ARE DEEMED TO BE PROVIDED FOR TAX PURPOSES , IS INTENDED TO AVOID CONFLICTS OF JURISDICTION BETWEEN MEMBER STATES WHERE THE SUPPLY OF SERVICES IS COVERED BY THE LAWS OF MORE THAN ONE STATE . WHERE NO SUCH CONFLICT EXISTS AND THE SERVICES SUPPLIED ARE PURELY INTERNAL AND DO NOT GIVE RISE TO ANY CONFLICT OF JURISDICTION AS FAR AS THE CHARGING OF TAXES IS CONCERNED , THE TERRITORIAL SCOPE OF VALUE ADDED TAX MUST BE DETERMINED IN RELATION TO THE BASIC RULES LAID DOWN IN ARTICLES 2 AND 3 WHICH ESTABLISH THE PRINCIPLE OF STRICT TERRITORIALITY AND NOT TO THE PROVISIONS OF ARTICLE 9 WHICH PROVIDE FOR DEROGATIONS THEREFROM .

2 . ALTHOUGH THE TERRITORIAL SCOPE OF COUNCIL DIRECTIVE NO 77/388 CORRESPONDS TO THAT OF THE EEC TREATY AS DEFINED FOR EACH MEMBER STATE IN ARTICLE 227 , AND ALTHOUGH THE RULES LAID DOWN IN THE DIRECTIVE HAVE BINDING AND MANDATORY FORCE THROUGHOUT THE NATIONAL TERRITORY OF THE MEMBER STATES , THE DIRECTIVE , AND IN PARTICULAR ARTICLE 9 ( 2 ) ( B ) THEREOF , IN NO WAY RESTRICTS THE FREEDOM OF THE MEMBER STATES TO EXTEND THE SCOPE OF THEIR TAX LEGISLATION BEYOND THEIR NORMAL TERRITORIAL LIMITS , SO LONG AS THEY DO NOT ENCROACH ON THE JURISDICTION OF OTHER STATES . ACCORDINGLY , ARTICLE 9 ( 2 ) ( B ) DOES NOT PROHIBIT A MEMBER STATE FROM LEVYING VALUE ADDED TAX ON A TRANSPORT OPERATION EFFECTED BETWEEN TWO POINTS WITHIN ITS NATIONAL TERRITORY , EVEN WHERE PART OF THE JOURNEY IS COMPLETED OUTSIDE ITS NATIONAL TERRITORY , PROVIDED THAT IT DOES NOT ENCROACH ON THE TAX JURISDICTION OF OTHER STATES .