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Taking EU-Africa dialogue forward

Taking EU-Africa dialogue forward

Outline of the Community (European Union) legislation about Taking EU-Africa dialogue forward

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Development > African Caribbean and Pacific states (ACP)

Taking EU-Africa dialogue forward

Document or Iniciative

Communication from the Commission to the Council: The EU-Africa dialogue [COM(2003) 316 final – Not published in the Official Journal].

Summary

The communication looks at how the EU can mainstream the new pan-African dimension into its cooperation and speaks of the need to build bridges between the different agreements that already exist between the EU and Africa: Cotonou, Euro-MED agreements and the Trade, Development and Cooperation Agreement with South Africa (TDCA). This could apply to the area of trade, to procurement rules for EU-funded projects, and to the programming of aid.

OBJECTIVES AND PRIORITY THEMES

The main aims of the EU-Africa dialogue are:

  • to strengthen political, economic and socio-cultural EU-Africa relations;
  • to eradicate poverty and attain the Millennium Development Goals in Africa, as well as implementing commitments recently made in international conferences (Doha, Monterrey and the World Summit on Sustainable Development);
  • to promote human rights, democracy and the rule of law in Africa.

The EU-Africa dialogue is organised around eight priority themes in order to achieve concrete outcomes:

  • human rights, democracy and good governance;
  • prevention and settlement of conflicts;
  • food security;
  • HIV/AIDS and other pandemics;
  • environment;
  • regional integration and trade;
  • external debt;
  • the return of illicitly exported cultural goods.

The communication takes each theme in turn, reports on the progress achieved and considers what future progress might be made.

Human rights, democracy and good governance

Dialogue on these themes is conducted around the topics of human trafficking, support for African institutions and the fight against corruption.

The Commission adopted a further communication in October 2003 on governance and development which proposes a new, more pragmatic approach to the promotion of good governance.

With a view to promoting good governance, the EU also proposed an action plan to combat illegal logging in its October 2003 communication on forest law enforcement and forestry management. Illegal logging in some countries has become such a chronic problem that it undermines the rule of law and principles of good governance.

The EU also wishes to deepen cooperation with Africa in the area of human resource development, especially universal primary education for both boys and girls, which is an essential element of the promotion of good governance.

Prevention and settlement of conflicts

The African Union gives priority to addressing conflicts, as shown by the decision taken by the African Union (AU) in July 2002 on setting up a Continent-wide Peace and Security Council and the adoption of a work programme on peace and security by all AU Member States.

In November 2003, the EU Council approved a draft decision on the financing of a Peace Facility for Africa from the European Development Fund (EDF) in response to a request made by the AU summit in Maputo in July 2003. This initiative, designed to support African institutions and measures to promote peace-keeping, will require cooperation between the AU, African regional organisations, the EU and the United Nations.

It is also essential to include measures to improve governance of natural resources within the framework of the EU-Africa dialogue on conflict prevention. Wars are actually waged to gain control of valuable resources for the purposes of private gain and natural resources, which could be exploited to raise money for the public purse, have frequently been used to fund and prolong armed conflict. This phenomenon is now acknowledged as being a major cause of conflicts in Africa.

Food security

The EU-Africa dialogue adopted a joint document reflecting a shared understanding of food security and the role of food aid which provided a basis for developing common positions in the areas of biotechnology, sanitary and phytosanitary standards, animal diseases and agricultural research.

The future dialogue should focus more on the political dimensions of food security, tackling such issues as access to productive resources (land, water) and equity.

HIV/AIDS and other pandemics

The EU and the countries of Africa agree that there is a need to strengthen health systems in African countries within a comprehensive framework of prevention, treatment and care and to increase health financing by the national governments and the international donor community. They also agree on the need for a joint approach in the areas of tiered pricing arrangements, technology transfer and local production so as to improve access to affordable medicines.

Environment

While the fight against drought and desertification is considered the main priority, other priorities under this heading include:

  • international environmental governance;
  • cooperation in preparing national strategies;
  • the link between poverty and the environment;
  • the regional dimension of environmental issues;
  • strengthening the capacity of the African countries to negotiate and implement international environmental agreements;
  • jointly looking for ways to improve the Global Environmental Facility;
  • integrated water resources management;
  • the prevention of natural disasters.

Note the EU Water Initiative which promoted the setting up of a European Water Facility to help give people in the African Caribbean and Pacific States (ACP) access to safe drinking water and adequate sanitation. Similarly, the creation of a European Energy Facility for ACP countries demonstrates the commitment of the EU to supporting the provision of adequate, affordable, sustainable energy services.

Mainstreaming of environmental issues into poverty eradication efforts should be a basic principle in EU-Africa cooperation considering that environmental protection is not a limitation to development but the base for sustainable livelihoods.

Regional integration and trade

Since the first EU-Africa summit, the EU has stepped up its support for regional integration by contributing to the integration of African countries into the world economy.

The Cotonou Agreement, signed in June 2000, for example, attaches a high priority to promoting regional cooperation and integration. It made substantial changes to the existing system to bring it into line with World Trade Organisation (WTO) rules and to allow the ACP States to participate fully in international trade. October 2003 saw the opening of negotiations on new regional economic partnership agreements with CEMAC (the Economic and Monetary Community of Central Africa) and ECOWAS (the Economic Community of West African States).

The EU and Africa will continue their cooperation and regular dialogue on WTO matters notably in the context of the Doha Development Agenda with a view to mainstreaming the development dimension in all areas of negotiations.

External debt

This sensitive issue has generated considerable debate and arguments on either side. As a contribution to the dialogue on debt, the Commission has decided to finance a study that will investigate the sustainability of the heavily indebted poor countries (HIPC) initiative. The Commission will ensure that the study reflects the views of the Member States, African countries, World Bank/IMF and other interested partners. Once this study is completed, the Commission is willing to table the relevant elements as a contribution to the EU-Africa dialogue.

The return of illicitly exported cultural goods

A set of guiding principles and concrete recommendations for action has been drawn up in the framework of the EU-Africa dialogue. The EU has established a preliminary inventory of all relevant ongoing cooperation activities between EU and African stakeholders.

The dialogue fosters adherence by all countries in the EU and Africa to the relevant international conventions, in particular the 1970 UNESCO Convention on the Means of Prohibiting and Preventing the Illicit Import, Export and Transfer of Ownership of Cultural Property and the 1995 UNIDROIT Convention on Stolen or Illegally Exported Cultural Objects.

IMPROVING THE QUALITY OF THE DIALOGUE

The communication also highlights ways in which Europe and Africa could initiate a more flexible, simplified, direct and political dialogue.

Potential lines of action are envisaged for strengthening institutional ties between the European Community and the AU:

  • at senior official level;
  • in bi-regional working parties;
  • between the AU and the EU Heads of Mission based in Addis Ababa in the framework of the regular dialogue and coordination for peace and security;
  • between the Brussels-based African Heads of Mission;
  • and, lastly, between the AU/EU Commissions.

Background

The dialogue at continental level between the EU and Africa began in Cairo in April 2000 at the first EU-Africa summit. The aim of the dialogue is to build a strategic partnership with the whole continent based on shared objectives and common values. These can be found in the Treaty of the European Union, the Cotonou Agreement and the Barcelona process, as well as in the Constitutive Act of the African Union (AU), created in 2002, and in the manifesto of NEPAD, the New Partnership for Africa’s Development, launched in 2001.

At a crucial point in time for EU-Africa relations, this communication takes stock of the dialogue between the two parties and proposes ways of taking it forward.

Tax-free allowances: permanent imports of personal property

Tax-free allowances: permanent imports of personal property

Outline of the Community (European Union) legislation about Tax-free allowances: permanent imports of personal property

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Taxation

Tax-free allowances: permanent imports of personal property

Document or Iniciative

Council Directive 2009/55/EC of 25 May 2009 on tax exemptions applicable to the permanent introduction from a Member State of the personal property of individuals.

Summary

This directive provides an exemption for personal property which is permanently introduced from another European Union (EU) country by private individuals from consumption taxes which would normally apply to such property. Personal property refers to property for the personal use of the persons concerned or the needs of their household. Such property must neither have a commercial nature nor be intended for an economic activity. The tools necessary for exercise of a person’s trade or profession are, however, to be treated as personal property.

Riding horses, motor-driven road vehicles (including their trailers), caravans, mobile homes, pleasure boats and private aircraft may only be granted exemption if the private individual concerned transfers his normal residence to the EU country of destination. For the purposes of this directive, ‘normal residence’ is defined as the place where a person usually lives (for at least 185 days in each calendar year) because of personal and occupational ties, or in the case of a person with no occupational ties, because of personal ties which show close links between that person and the place where he/she is living.

Motor-driven road vehicles (including their trailers), caravans, mobile homes, pleasure boats and private aircraft must not be disposed of, hired out or lent during the 12 months following their tax exempt introduction, except in circumstances justified to the satisfaction of the competent authorities in the EU country of destination.

The introduction of the property may be undertaken all at once or in stages, and for any of the following reasons:

  • in connection with a transfer of normal residence: all of the property must be introduced within 12 months of the transfer of normal residence;
  • in connection with the furnishing or relinquishment of a secondary residence: the property must correspond to the normal furniture of the secondary residence and the person concerned must be the owner of the secondary residence or be renting it for a period of at least 12 months;
  • on the occasion of a marriage: the property must be introduced between two months before the marriage date envisaged and four months after the actual marriage date, and proof of marriage must be provided;
  • acquired by inheritance: the property must be introduced within two years of the date on which the person concerned enters into possession of the property, and proof must be provided that the property was acquired by inheritance.

With the exception of certain goods, EU countries have the right to retain or introduce more liberal conditions for granting tax exemptions than those provided for in this directive.

References

Act Entry into force Deadline for transposition in the Member States Official Journal

Directive 2009/55/EC

30.6.2009

OJ L 145, 10.6.2009

Tackling climate change

Tackling climate change

Outline of the Community (European Union) legislation about Tackling climate change

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Environment > Tackling climate change

Tackling climate change

Climate change is one of the biggest challenges facing mankind in the coming years. Rising temperatures, melting glaciers and increasingly frequent droughts and flooding are all evidence that climate change is really happening. The risks for the whole planet and for future generations are colossal and we need to take urgent action.
For several years now the European Union has been committed to tackling climate change both internally and internationally and has placed it high on the EU agenda, as reflected in European climate change policy. Indeed, the EU is taking action to curb greenhouse gas emissions in all its areas of activity in a bid to achieve the following objectives: consuming less-polluting energy more efficiently, creating cleaner and more balanced transport options, making companies more environmentally responsible without compromising their competitiveness, ensuring environmentally friendly land-use planning and agriculture and creating conditions conducive to research and innovation.

EU CLIMATE CHANGE POLICY

A realistic long-term policy framework
Following on from work under the European Climate Change Programme (ECCP), the European Union has come up with a realistic climate change strategy, advocating practical action to prevent temperatures from increasing to more than 2°C above pre-industrial levels.

  • Strategy on climate change: foundations of the strategy
  • Strategy on climate change for 2020 and beyond
  • Launching the European Climate Change Programme (ECCP)

Reduction in greenhouse gas emissions as priority objective
Reducing greenhouse gases is a key component of European action. The EU has a monitoring mechanism in place to keep regular track of emissions and the absorption of these gases. With a view to gradually reducing emissions the EU has also established a system based on market rules, a greenhouse gas emissions trading scheme and specific rules on fluorinated greenhouse gases.

  • Reducing greenhouse gases by 2020
  • Greenhouse gas: reducing emissions by 20 % or more by 2020
  • Mechanism for monitoring greenhouse gas emissions
  • Greenhouse gas emission allowance trading scheme
  • Reduction in fluorinated greenhouse gases

Monitoring and adapting to the inevitable consequences of climate change
We are already feeling the effects of climate change. The extent of these effects can be measured thanks to the GMES monitoring system, while a number of European measures provide for an emergency response. These include, in particular, the Community Civil Protection Mechanism and specific measures concerning floods and droughts. In 2007, the Commission adopted a Green Paper on adapting to climate change in Europe.

  • European Earth monitoring programme (GMES)
  • Adapting to Climate Change
  • Civil Protection Mechanism
  • Flood management and evaluation
  • Combating deforestation
  • Fight against illegal logging

The Kyoto Protocol and the EU’s commitment in international negotiations
In the international arena, the EU is at the very forefront of the fight against climate change and takes an active part in negotiations on the subject. The EU signed up in 1998 to the Kyoto Protocol to the United Nations Framework Convention on Climate Change, which deals with six greenhouse gases. Moreover, to help developing countries meet the challenge of climate change, the EU has adopted a strategy on climate change in the context of development cooperation.

  • Kyoto Protocol on climate change
  • Implementing the Kyoto Protocol
  • Global climate change alliance
  • Climate change in the context of development cooperation

LESS POLLUTING, MORE EFFICIENT ENERGY

Focusing the energy market on security and sustainability of supply
With a package of measures adopted in 2007, the EU laid the foundations for a genuine common energy policy. This series of measures also focuses the energy market more on sustainability, particularly by means of tax measures.

  • An Energy Policy for Europe
  • Community framework for the taxation of energy products and electricity
  • Sustainable power generation from fossil fuels
  • Demonstration of the capture and storage of CO2

Controlling and rationalising energy consumption thanks to energy efficiency
The EU has launched a large-scale consultation based on a Green Paper and has adopted an Action Plan for 2007-2010 to make energy efficiency and energy saving a key component of European energy policy. It has also adopted specific measures, in particular on energy efficiency and the labelling of energy-using products.

  • Energy efficiency for the 2020 goal
  • Action Plan for Energy Efficiency (2007-12)
  • Green Paper on energy efficiency
  • Towards a European Strategic Energy Technology Plan

Making renewable energy a genuine and affordable alternative
A total of 20% of European energy consumption to be met from renewable sources by 2020: this is the target the EU set itself in 2007. To achieve this objective the EU has adopted measures aimed at promoting renewable energy sources and developing the markets in the biomass and biofuel sectors, among others.

  • Promotion of the use of energy from renewable sources
  • Renewable Energy Road Map
  • Biomass Action Plan
  • EU strategy for biofuels

CLEANER BETTER-BALANCED TRANSPORT

Achieving transport policy objectives
The ambitious revitalisation of EU transport policy, through the White Paper adopted in 2001, will make a significant contribution towards reducing the impact of transport on climate change. Achieving this objective will require, in particular, better management of freight transport and the harnessing of technology.

  • Freight transport logistics in Europe
  • White paper: European transport policy for 2010

Reconciling road and air transport with the environment
The EU has adopted a wide range of measures to reduce the impact of road and air transport, including measures reducing levels of polluting emissions, traffic management measures and tax measures.

  • Taxation of heavy goods vehicles: Eurovignette Directive
  • Passenger car related taxes
  • Aviation and climate change
  • Framework for creation of the Single European Sky (SES)
  • Single European Sky II
  • Clean Sky
  • Internalisation of external transport costs

Promoting transport by rail and waterways and intermodality
To improve the balance between transport modes and to promote less polluting means of transport, the EU supports the development of measures to promote rail, maritime and waterway transport and to join up different modes of transport (intermodality).

  • White Paper: A strategy for revitalising the Community’s railways
  • Promotion of inland waterway transport “NAIADES”
  • Programme for the promotion of short sea shipping
  • Strategy to reduce atmospheric emissions from seagoing ships
  • The Marco Polo II programme
  • Maritime Policy Green Paper

COMPETITIVE, RESPONSIBLE COMPANIES
Companies are obliged to take into consideration – and reduce – the impact of their activities on the environment (according to the “polluter pays” principle). A number of environmental management instruments are available to assist them in this.

  • Environmental liability

AGRICULTURE AND LAND-USE PLANNING TO BENEFIT THE ENVIRONMENT
Man-made greenhouse gas emissions can be reduced by proper land and land-use management, including, among other things, carbon storage and the promotion of low-emission activities.

  • Carbon dioxide capture and geological storage
  • Thematic strategy for soil protection
  • Landfill of waste
  • Production and labelling of organic products

ADAPTED FRAMEWORK FOR INNOVATION
The EU has set up a raft of direct and indirect financial assistance packages, particularly to support innovative projects and technological development.

  • SET-Plan for the development of low carbon technologies
  • Seventh Framework Programme (2007 to 2013)
  • Competitiveness and Innovation Framework Programme (CIP) (2007-2013)
  • Action plan in favour of environmental technologies
  • Strategic Energy Technology Plan (SET Plan)

Tax governance in developing countries

Tax governance in developing countries

Outline of the Community (European Union) legislation about Tax governance in developing countries

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Development > Sectoral development policies

Tax governance in developing countries

Document or Iniciative

Communication from the Commission to the European Parliament, the Council and the European Economic and Social Committee of 21 April 2010 – Tax and Development Cooperating with Developing Countries on Promoting Good Governance in Tax Matters [COM(2010) 163 final – Not published in the Official Journal].

Summary

The improvement of economic and social conditions in developing countries is related to good tax governance and the strengthening of their tax systems. Furthermore, good international financial governance should allow funding destined for development to be mobilised and used more effectively.

Thus, the European Union (EU) encourages both tax cooperation with developing countries and the fight against tax evasion and avoidance.

Tax governance in developing countries

Development aid policies should contribute to the effectiveness of tax systems and an increase in tax revenue in EU partner countries. Taxes are essential for sustainable development, the legitimacy of the State, economic stability, and the financing of public services and infrastructures.

However, developing countries are subject to several types of difficulty, particularly due to:

  • the fragility of their economic structures and their low level of competitiveness;
  • their political instability, bad governance and the weakness of the rule of law;
  • bad tax management and unequal tax burden distribution among taxpayers;
  • the weakness of tax administrations lacking means and skills.

Furthermore, in the context of globalisation, several international factors form barriers to the effectiveness of national tax systems:

  • the implementation of domestic tax rules becomes difficult in a world with a high geographical mobility of taxpayers, high volumes of trade and capital flows and the use of new technologies for fraudulent purposes;
  • the transition from revenue systems largely dependent on customs revenue to broader and more modern ones;
  • a wish to attract sustainable foreign investments;
  • the use of bad tax practices, including in developed countries.

In order to overcome these tax reform difficulties, partner countries should:

  • distribute the tax burden fairly, particularly by balancing direct and indirect taxes;
  • take account of the specific nature of the informal economy (i.e. non-structured economic activities) and support micro and small enterprises;
  • stabilise the legal framework and improve the transparency of tax systems;
  • enhance the skills and capacities of administrations collecting taxes and reporting expenditure.

Transparency and international tax cooperation

The international context should also be improved by promoting and adopting international principles and standards as regards transparency and the exchange of tax information. This action should be taken in order to combat tax evasion and avoidance, money laundering, corruption and the financing of terrorism. It is also important to enhance the participation of developing countries in international fora dealing with tax governance issues.

The Commission also wishes to carry out its action as part of regional cooperation partnerships with the African, Caribbean and Pacific (ACP) countries, Latin American and European Neighbourhood regions.

Using European Union instruments

Each partner country is to define their policies and reforms. Development aid should be adapted to each country according to its economic situation, international position and policies. Several aid instruments can be used to support these reforms:

  • budget support programs and public finance management tools;
  • technical cooperation with tax administrations;
  • regional cooperation with the African, Caribbean and Pacific (ACP) countries, Latin American and European Neighbourhood regions;
  • support for the capacities of oversight bodies, national parliaments and Non-State Actors in developing countries in the field of tax.

These instruments must be established as part of existing programmes (the European Development Fund (EDF), the Development Cooperation Instrument (DCI), or the European Neighbourhood Policy and Partnership Instrument (ENPI)).

In addition, the Commission encourages donor coordination in each partner country, as well as closer international cooperation when international standards on tax cooperation are defined. These standards should take into account the needs and capacities of developing countries.

Context

The Commission’s action is in line with the Monterrey Consensus and the Doha Declaration adopted by the UN.

The second amendment to the Cotonou Agreement takes account of good tax governance principles.

Taxation of savings income

Taxation of savings income

Outline of the Community (European Union) legislation about Taxation of savings income

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Internal market > Single market for capital

Taxation of savings income

Document or Iniciative

Council Directive 2003/48/EC of 3 June 2003 on taxation of savings income in the form of interest payments.

Summary

The aim of the Directive is to enable savings income, in the form of interest payments made in one Member State to “beneficial owners” * who are individual residents for tax purposes in another Member State, to be made subject to effective taxation in accordance with the laws of the latter Member State. The automatic exchange of information between Member States concerning interest payments * is the means chosen to achieve effective taxation of these “interest payments” in the Member State where the beneficial owner is resident for tax purposes. Member States must therefore take the necessary measures to ensure that the tasks necessary for the implementation of this Directive – cooperation and exchange of banking information – are carried out by paying agents established within their territory, irrespective of the place of establishment of the debtor of the debt claim producing the interest.

Income concerned

The scope of this Directive is limited to taxation of savings income in the form of interest payments on debt claims, to the exclusion of the issues relating to the taxation of pension and insurance benefits. At territorial level, the Directive applies to interest paid by a “paying agent” * established within the territory to which the Treaty applies.

The general system: exchange of information

  • Information reporting by the paying agent

Where the beneficial owner is resident in a Member State other than that in which the paying agent is established, the Directive stipulates that the latter must report to the competent authority of its Member State of establishment a minimum amount of information, such as the identity and residence of the beneficial owner, the name and address of the paying agent, the account number of the beneficial owner or, where there is none, identification of the debt claim giving rise to the interest, and information concerning the interest payment.

Moreover, the minimum amount of information concerning interest payment to be reported by the paying agent must distinguish between the specific categories of interest listed in the Directive. However, Member States may restrict the minimum amount of information to the total amount of interest or income and to the total amount of the proceeds from sale, redemption or refund.

  • Automatic exchange of information

Under the Directive, the competent authority of the Member State of the paying agent must communicate – at least once a year, within six months following the end of the tax year of the Member State of the paying agent – the information referred to above to the competent authority of the Member State of residence of the beneficial owner.

Context

As part of the “tax package” aimed at combating harmful tax competition, the European Union (EU) decided to draw up a legislative instrument to overcome existing distortions in the effective taxation of savings income in the form of interest payments.

This Directive builds on the consensus reached at the Feira European Council of 19 and 20 June 2000. During this Council, it was decided to set up of an automatic exchange of information system between all Member States. Belgium, Luxembourg and Austria benefited from a transitional period for the implementation of this measure during which, instead of providing information to the other Member States, they had to apply a withholding tax to the savings income covered by this Directive.

Key terms used in the act
  • Beneficial owner: any individual who receives an interest payment or any individual for whom an interest payment is secured, unless he provides evidence that it was not received or secured for his own benefit.
  • Paying agent: any economic operator who pays interest to or secures the payment of interest for the immediate benefit of the beneficial owner, whether the operator is the debtor of the debt claim which produces the interest or the operator charged by the debtor or the beneficial owner with paying interest or securing the payment of interest. In specific cases set out in Article 4 of the Directive, any entity established in a Member State to which interest is paid or for which interest is secured for the benefit of the beneficial owner is also considered a paying agent upon such payment or securing of such payment.
  • Interest payment: interest paid or credited to an account, relating to debt claims of every kind, whether or not secured by mortgage and whether or not carrying a right to participate in the debtor’s profits, and, in particular, income from government securities and income from bonds or debentures, including premiums and prizes attaching to such securities, bonds or debentures; penalty charges for late payments are not regarded as interest payments; interest accrued or capitalised at the sale, refund or redemption of the debt claims referred to above; income deriving from interest payments either directly or through certain entities set out limitatively, distributed by undertakings for collective investment in transferable securities (UCITS) or certain undertakings for collective investment; income realised upon the sale, refund or redemption of shares or units in UCITS, if they invest directly or indirectly, via other undertakings for collective investment or entities, more than 40 % of their assets in debt claims.

References

Act Entry into force Deadline for transposition in the Member States Official Journal
Directive 2003/48/EC

16.7.2003

Date of application: 1.7.2005

OJ L 157 of 26.6.2003

The successive amendments and corrections to Directive 2003/48/EC have been integrated into the original text. This consolidated versionis for reference only.

RELATED ACTS

Proposal for a Council Directive of 13 November 2008 amending Directive 2003/48/EC on taxation of savings income in the form of interest payments [COM(2008) 727 final – Not published in the Official Journal].
This Proposal for a Directive aims at offsetting the shortcomings in the current directive, with a view to taxing savings income more effectively and eliminating the undesirable distortions of competition.

In this perspective, the main amendments proposed concern the following points:

  • the definition of the beneficial owner: a proposal for a ‘look-through’ approach to cover interest payments made to legal persons or arrangements held by individuals (the current directive only covers interest payments made for the immediate benefit of individuals);
  • the identification of beneficial owners: the recording of the date and place of birth of the beneficial owner in all cases and in addition the tax identification number of the beneficial owner when this number appears on documents presented for identification purposes is proposed;
  • the definition of the notion of paying agent: clarification of the notion of ‘paying agent on receipt’ and the introduction of a ‘positive’ definition of intermediary structures established in Member States and bound to act as ‘paying agents on reception’;
  • the definition of interest payment, in order to cover financial instruments that are equivalent to those which are explicitly covered: structured products that are equivalent in substance to debt commodities and some insurance products that are directly comparable to undertakings for collective investment since their performance is linked to debt claims or equivalent income;
  • the extension of the scope to all undertakings for collective investment in transferable securities (UCITS);
  • the communication of information by paying agents;
  • the introduction of a comitology procedure so as to quickly decide implementation measures related to the Directive.

 

Tax-free allowances: administrative cooperation in the field of indirect taxation

Tax-free allowances: administrative cooperation in the field of indirect taxation

Outline of the Community (European Union) legislation about Tax-free allowances: administrative cooperation in the field of indirect taxation

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Other

Tax-free allowances: administrative cooperation in the field of indirect taxation

1) Objective

Establishment of a common system of administrative cooperation and information exchange between the competent authorities of the Member States in the field of indirect taxation.

2) Document or Iniciative

Council Regulation (EEC) No 218/92 of 27 January 1992 on administrative cooperation in the field of indirect taxation (VAT) [Official Journal L 24 of 01.02.1992].

Amended by the following:

Council Regulation (EC) No 792/2002 of 7 May 2002 [Official Journal L 128 of 15.05.2002].

3) Summary

The Regulation lays down the ways in which the administrative authorities in the Member States responsible for the application of laws on VAT must cooperate with each other and with the Commission to ensure compliance with those laws. It lays down procedures for the exchange by electronic means of VAT information relating to intra-Community transactions and for any subsequent exchange of information in this field.

It stipulates that the competent authorities must exchange any information necessary to determine and collect indirect taxes. They must also provide the Commission with any particular or general information of interest to the Community.

It also lays down that the competent authority must maintain an electronic database containing VAT information relating to intra-Community transactions. It specifies the particulars that the competent authorities must communicate automatically to the other Member States as well as the particulars to which the other Member States may also have direct access. Where such information is insufficient, the competent authorities may, in specific cases, request further information.

Each Member State must maintain an electronic database containing a register of persons to whom VAT identification numbers have been issued. The competent authorities may obtain directly or have communicated to them confirmation of the validity of a VAT identification number of a person established in another Member State.

The Regulation lays down the conditions governing the exchange of information, particularly as regards the number and nature of requests for information, the use of usual sources of information, etc. The Commission will present before July 1994 general criteria for defining the scope of these commitments. The Regulation also contains provisions on the confidential nature of information exchanged under the administrative cooperation arrangements.

The Regulation provides for consultation and coordination procedures. It sets up a Standing Committee that will examine matters relating to the exchanges of information referred to above and adopt implementing measures. In addition, the Member States and the Commission will examine and evaluate the operation of the administrative cooperation arrangements with a view to improving them, notably in the light of Member States’ experience of new means of tax avoidance and evasion. Every two years, the Commission must draw up a report on the conditions of application of the Regulation.

Under the Regulation, Member States must inform the Commission of any administrative cooperation agreements in the field of indirect taxation that they have concluded with third countries.

Act Date of entry into force Deadline for implementation in the Member States
Regulation (EEC) N° 218/92 04.02.1992 04.02.1992
Regulation (EC) N° 792/2002 22.05.2002 01.07.2003

4) Implementing Measures

List of competent authorities – Official Journal C 302 of 28.10.1994

The Commission published a list of the competent authorities notified in accordance with Article 2(2) of the Council Regulation (EEC) No 218/92 of 27 January 1992 on administrative cooperation in the field of indirect taxation (VAT).

Second Commission report to the Council and the European Parliament of 8 January 1997 submitted in accordance with Article 14 and concerning the application of Council Regulation (EEC) No 218/92 [COM(96)681 final – Not published in the Official Journal].

The report describes developments in administrative cooperation since 1993, evaluates its effectiveness and makes recommendations for improvements. Administrative cooperation is becoming an increasingly common practice in Member States and is a source of reliable data. Nonetheless, the situation is not satisfactory. Although this can be attributed mainly to the current arrangements for charging VAT, the Member States must make efforts to build administrative cooperation into their national VAT control procedures.

Third Commission report to the Council and the European Parliament of 28 January 2000 submitted in accordance with Article 14 and concerning the application of Council Regulation (EEC) No 218/92 and Fourth report under Article 12 of Regulation (EEC, Euratom) No 1553/89 on VAT collection and control procedures [COM(2000)28 final – Not published in the Official Journal].

This is a joint report which was written in application of Regulation (EEC) No 218/92 and Regulation (EEC, EURATOM) No 1553/89, because of the close link between administrative cooperation and VAT checks. The Commission notes that the Member States are far from making the best possible use of the options available under the administrative cooperation and mutual assistance arrangements and that this results in few VAT checks being carried out across the board. In spite of the new challenges of the internal market, nothing has changed where carrying out VAT checks is concerned. The Commission therefore proposes a number of measures to fill the gaps, e.g.:

  • a common anti-fraud policy to combat the fraud perpetrated on the VAT system;
  • root and branch re-examination of the national VAT auditing systems;
  • monitoring and analysis of fraud;
  • review of the administrative cooperation and mutual assistance systems and procedures;
  • the Member States to invest in new technologies for their administrations and improve their procedures for carrying out VAT checks.

The Commission is considering amending Regulation (EEC) No 218/92 so as to ensure better operation of the administrative cooperation and mutual assistance arrangements.

5) Follow-Up Work

Council Regulation (EC) No 792/2002 of 7 May 2002 amending temporarily Regulation (EC) No 218/92 on additional measures regarding electronic commerce [Official Journal L 128 of 15 May 2002].

This text provides for the application of VAT to electronic services offered for consumption in the Community. It also exempts these same services from VAT when they are offered outside the EU. These rules update the existing VAT rules in order to take account of the developments in electronic commerce and to offer service providers a clear and definite regulatory framework, whether or not they are established in the EU. Measures to facilitate and simplify procedures are also envisaged with a view to reducing the administrative burden on enterprises. Member States must implement these new provisions no later than 1 July 2003.

 

Tackling tax obstacles to the cross-border provision of occupational pensions

Tackling tax obstacles to the cross-border provision of occupational pensions

Outline of the Community (European Union) legislation about Tackling tax obstacles to the cross-border provision of occupational pensions

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Internal market > Single market for capital

Tackling tax obstacles to the cross-border provision of occupational pensions

Document or Iniciative

Communication from the Commission to the Council, to the European Parliament and to the European Economic and Social Committee, of 19 April 2001, entitled, “The elimination of tax obstacles to the cross-border provision of occupational pensions” [COM(2001) 214 final – Not published in the Official Journal].

Summary

Through this communication the Commission:

  • seeks a coordinated approach adapted to the diversity of Member States’ rules rather than attempting to achieve harmonisation;
  • calls for the elimination of unduly restrictive or discriminatory tax rules;
  • presents measures to safeguard Member States’ tax revenues.

To do this, the Commission proposes to monitor Member States’ national rules in this field and take the necessary steps to ensure their compliance with the EC Treaty, in particular with the rules on non-discrimination. It reserves the right to initiate legal action against any Member State failing to comply with the rules.

The Commission also proposes adopting measures to maintain the tax revenues of Member States for the cross-border provision of pensions. It further proposes a coordinated approach to eliminating the tax obstacles, in particular double taxation, which result from the different taxation systems for occupational pensions in the Member States.

Application of the EC Treaty rules

The Commission notes that the EC Treaty rules on the free movement of capital, labour and services must be applied in the area of cross-border pension provision. Member States are consequently required to eliminate all discrimination against occupational schemes established in other Member States.

Discrimination means privileged treatment of domestic schemes, in particular more favourable rules on deductibility of contributions or taxation of benefits.

The Commission accordingly intends to examine the compliance of the relevant national rules with the fundamental freedoms of the EC Treaty and, where necessary, to bring cases before the Court of Justice so as to allow the emergence of a fully functioning single market for occupational pensions.

Exchange of information

A Community legislative framework for information exchange already exists, in particular under the Directive on mutual assistance between Member States in the field of direct taxation. In the interests of better coordination between Member States on the collection of taxes applicable to cross-border pensions, the Commission recommends that Member States agree on an automatic exchange of information on occupational pensions.

The Council has already decided upon the principle of automatic information exchange in the area of taxation of savings income. The extension of that principle to pensions will help prevent distortions by ensuring the same level of information exchange for comparable products.

Mismatch of tax systems

Different Member States have different rules in terms of whether they tax or exempt pension contributions, investment income and capital gains of the pension institution, and pension benefits. These differences can create problems where employees spend their working careers in one Member State but retire to another. Pensions are sometimes taxed, for example, even though the contributions are not tax deductible or the pension is not taxed even though the contributions are deductible.

Concerning problems of double taxation and non-taxation arising from the mismatch of tax systems, the Commission recommends wider application of the “EET system” (Exempt contributions, Exempt investment income and capital gains of the pension institution, Taxed benefits) already applied in eleven Member States, entailing the deductibility of pension contributions and investment income coupled with the taxation of benefits, together with better coordination of Member States’ taxation rules.

The Commission acknowledges that completely uniform rules for occupational pensions will not be easy to achieve while the reliance on social security and occupational pension schemes varies so significantly from one Member State to another.

The Commission therefore explores how double taxation and double non-taxation problems can be addressed by better coordination of Member States’ taxation rules.

Solutions could include unilateral tax relief, bilateral agreements or a multilateral convention or coordinating measures at European Union level.

Background

Pensions are an issue of universal concern: for individual citizens who want adequate provision for their retirement; for employers who seek cost-effective pension provision for their employees and for governments who, throughout the Union, are seeking to maintain adequate pension provision in the face of ageing populations.

The potential benefits of better cross-border pension provision are substantial. At present citizens who take up employment or residence outside their home State are often unable to remain in their existing occupational pension schemes. The number of European citizens aged 15 years and over residing in a Member State other than their Member State of origin is increasing, and enlargement of the Union will contribute further to this trend. Impediments to cross-border pension provision may also prevent European businesses from choosing the most efficient way of providing pensions for their employees by centralising their pension provision.

At the Stockholm European Council of 23 and 24 March 2001, as part of the new strategy to open up pan-European labour markets, the Commission promised an initiative in the tax field to complement the Directive on occupational retirement provision that would facilitate cross-border pension provision and investment.

 

Taking account of convictions in Member States in the course of new criminal proceedings

Taking account of convictions in Member States in the course of new criminal proceedings

Outline of the Community (European Union) legislation about Taking account of convictions in Member States in the course of new criminal proceedings

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Justice freedom and security > Judicial cooperation in criminal matters

Taking account of convictions in Member States in the course of new criminal proceedings

Document or Iniciative

Council Framework Decision 2008/675/JHA of 24 July 2008 on taking account of convictions in the Member States of the European Union in the course of new criminal proceedings.

Summary

This Framework Decision establishes the criteria whereby previous convictions * delivered by any Member State are taken into account during criminal proceedings in another Member State against the same person, but for different facts.

The information regarding previous convictions can be obtained under applicable instruments on mutual assistance in criminal matters between Member States or on the exchange of information extracted from the criminal record. In the context of new criminal proceedings, Member States must ensure that previous convictions handed down in another Member State are duly taken into consideration under the same conditions as the previous national convictions.

The previous convictions are to be taken into account at the pre-trial and trial stage, as well as when the conviction is executed. They should be given due consideration especially in relation to the applicable rules of procedure concerning:

  • provisional detention;
  • definition of the offence;
  • type and level of the sentence;
  • execution of the decision.

When previous convictions are taken into consideration by the Member State conducting the new proceedings, this shall not have the effect of interfering with, revoking or reviewing the previous convictions.

In instances where the previous conviction was not handed down or fully executed by another Member State prior to the commission of the offence for which the new proceedings are conducted, it is not required to comply with national rules on imposing sentences, if the application of the national rules to previous foreign convictions limits the judge in imposing a sentence. Nevertheless, the previous convictions must be taken into consideration by other means.

This Framework Decision replaces Article 56 of the European Convention of 28 May 1970 on the International Validity of Criminal Judgements as between the Member States. The Article provides for the possibility to take into consideration criminal judgements handed down in other states that are parties to the Convention.

Background

The programme of measures to implement the principle of mutual recognition of decisions in criminal matters was adopted by the Council on 29 November 2000. This programme also provides for the establishment of the principle by which a Member State must take into account previous criminal judgements rendered by the courts in other Member States, in order to assess the offender’s criminal record, establish whether s/he has reoffended and decide on the type of sentence and its execution.

Key terms used in the act
  • Conviction: any final decision of a criminal court establishing guilt of a criminal offence.

References

Act Entry into force Deadline for transposition in the Member States Official Journal

Council Framework Decision 2008/675/JHA

24.7.2008

15.8.2010

OJ L 220 of 15.8.2008

Tax-free allowances: permanent or temporary importation of private motor vehicles

Tax-free allowances: permanent or temporary importation of private motor vehicles

Outline of the Community (European Union) legislation about Tax-free allowances: permanent or temporary importation of private motor vehicles

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Internal market > Motor vehicles > Interactions between the automobile industry and specific policies

Tax-free allowances: permanent or temporary importation of private motor vehicles

To remove the tax obstacles to the permanent or temporary importation of private motor vehicles into another Member State.

 2) Proposal

Proposal for a Council Directive of 10 February 1998 governing the tax treatment of private motor vehicles moved permanently to another Member State in connection with a transfer of residence or used temporarily in a Member State other than that in which they are registered [COM(98) 30 final – Official Journal C 108 of 07.04.1998].

 3) Summary

This proposal is intended to replace Council Directives 83/182/EEC and 83/183/EEC, which deal respectively with the temporary importation of certain means of transport and with the permanent importation from another Member State of the personal property of individuals.

Since the inception of the single market, the taxation of personal property following a transfer of residence has been confined to motor vehicles. The rules applicable to other types of goods, such as those laid down in those two directives, have become obsolete. What is more, the rules set out in those directives in respect of motor vehicles do not cover all aspects of the tax regimes currently in force in the Member States. In order to permit genuine free movement of persons and, more particularly, of their property, it is important to remove the tax obstacles that can still impede the movement of motor vehicles (especially double taxation or unnecessary administrative requirements).

The new Directive is intended to prohibit the imposition of excise duty, registration taxes or other consumption taxes (cf. Annex I to the Directive) on private motor vehicles registered in other Member States and brought permanently into the Member State to which the private individual has transferred his normal residence. Taxes on the use of the vehicle, such as periodic road taxes (cf. Annex II to the Directive), are, however, permissible.

None of these taxes may be imposed by a Member State on private motor vehicles registered in other Member States and used temporarily on its territory (cf. point 8 below).

The provisions governing the permanent transfer of residence or the temporary use of vehicles are also applicable to the normal spare parts, accessories and equipment of any motor vehicle.

The general rules for determining “normal residence” are as follows:

  • “normal residence” means the place where a person lives for at least 185 days in each calendar year because of personal and occupational ties;
  • in the case of a person who lives in turn in two or more Member States, his place of “normal residence” is regarded as the place of his personal ties provided that he returns there regularly;
  • where a person is living in a Member State in order to carry out a task of a set duration, his place of residence is still regarded as being the place of his personal ties, irrespective of whether he returns there during the course of this activity;
  • attendance at a university or school in another Member State does not constitute a transfer of normal residence.

Individuals can give evidence of their place of residence by presenting their identity card or any other valid document. Where the competent authorities of the Member State of destination have doubts regarding such evidence, or for the purpose of certain specific controls, they may request whatever additional information or evidence they require, either from the individual or from the competent authorities of the other Member State.

N.B.: The rules for determining the normal residence were laid down in the two 1983 Directives that are due to be replaced by this new proposal. The concept of “normal residence” has been the subject of several court actions, and even the Court of Justice of the European Communities has been called upon to hand down a judgment interpreting and supplementing the provisions determining normal residence. A person’s place of normal residence can therefore be defined as the permanent centre of his interests and must be determined by applying all of the criteria laid down in the Directive (and not just of one or several of them) and any other relevant factors.

Drawing on the case-law of the Court of Justice, the proposal for a Directive introduces a provision specifying that a change in a person’s marital status does not, in itself, imply a change of residence.

Similarly, the proposal contains an important amendment to the current rules in order to enable a decision to be reached more easily where the place of normal residence is in dispute (cf. point 15 below).

In the case of a person’s place of residence being transferred to another Member State, that person will not be liable for extra taxation provided that certain conditions are met:

  • the motor vehicle has been acquired under the general conditions of taxation in force in the domestic market of one of the Member States and is not subject, as a result of its being brought to another Member State, to any exemption from or refund of any of the taxes referred to above (point 3) in the Member State from which it is brought. These two conditions are deemed to be fulfilled if the vehicle bears a standard registration plate of the Member State of registration or if the vehicle was purchased under certain special agreements governing public officials (e.g. diplomats) working abroad;
  • the person transferring residence has had the use of the vehicle for a period of at least six months prior to his arrival in the new Member State;
  • the motor vehicle is brought into the Member State to which the person transfers his residence not later than 12 months after such transfer.

Where a vehicle is used temporarily in another Member State, no extra tax is payable provided that:

  • the vehicle is not used in the other Member State for a continuous period exceeding six months within any twelve-month period (or a continuous period of nine months in the case of a person who is working in another Member State and uses there a vehicle registered in the Member State of his normal residence);
  • the person using the vehicle has his normal residence in a Member State other than the Member State of temporary use;
  • the vehicle is used on an exclusively private basis.

However, during the period of temporary use in another Member State, the vehicle may not be hired out or lent to a resident of that Member State. Exceptions to this rule are listed in point 9 below.

The following are also cases of private use of the vehicle where taxation is not permitted:

  • where a private vehicle belonging to a car rental firm is in the Member State of temporary use as a result of a rental contract which expired in that Member State;
  • where a vehicle is driven temporarily in another Member State by a member of the family of the person benefiting from the provisions governing temporary use (provided that the person who brought the vehicle onto the territory of that Member State is present);
  • where a vehicle is driven temporarily in another Member State by any person (provided that the person who brought the vehicle onto the territory of that Member State is also on board the vehicle);
  • where a vehicle registered in one Member State is used in another Member State by a resident of the latter Member State on a temporary basis (for not more than two months) provided that his vehicle has been immobilised as a result of a breakdown or accident;
  • where an employee is using on a temporary basis in the Member State where he is resident a vehicle belonging to or hired by his company, which itself is located in another Member State;
  • where a vehicle registered in his normal country of residence is used regularly by a person for the journey between his place of residence and his place of work in another Member State;
  • where a vehicle registered in the Member State of his normal residence is used by a student in the Member State in which he is pursuing his studies.

The following cases of temporary business use are also exempted from taxation:

  • where the person using the vehicle has his normal residence in a Member State other than the Member State of temporary use (except in cases where that person is an employee of an undertaking which is established in another Member State and allows him the use of a vehicle registered in the Member State in question);
  • where the vehicle is not used in the Member State of temporary use to carry passengers for hire or material reward of any kind, or for the industrial and/or commercial transport of goods, whether for reward or not;
  • where the vehicle is not hired out or lent in the Member State of temporary use;
  • where the vehicle is registered in the Member State of normal residence of the user;
  • where the vehicle has been acquired under the general conditions of taxation obtaining in the Member State of normal residence of the user;
  • where any periodic vehicle taxes ordinarily payable in the Member State of registration have been paid.

Where a private vehicle registered in another Member State is used temporarily in a certain Member State and becomes badly damaged there, and where the vehicle is disposed of with a view to being scrapped or destroyed, no demand for any of the taxes referred to in Annexes I and II to the Directive may be made by the Member State of temporary use.

Where a person wishes to use a vehicle in another Member State for a period in excess of that specified above (for example, on an ongoing basis in connection with a secondary residence), the Member State in question registers the vehicle and is entitled to impose the normal taxes that are liable upon registration.

Where the conditions for temporary use are not met, the individual concerned can:

  • remove the vehicle from the Member State of temporary use or
  • register it there and pay the normal taxes that are liable upon registration.

In applying sanctions, the Member State must ensure that they are commensurate with the gravity of the infringement and do not constitute an obstacle to the free movement of goods and persons.

In cases where a used motor vehicle is brought permanently from one Member State to another in circumstances other than those governed by the Directive, the latter Member State is entitled to impose a registration tax or similar tax (cf. Annex I to the Directive) on that vehicle provided that it ensures that the amount of tax levied is broadly in line with that levied on vehicles of a similar kind within that Member State.

In the case of disputes, especially regarding the determination of the place of residence for the purpose of taxing the vehicle, the authorities of the two Member States in question should consult each other in order to come to a decision. If they do not reach an agreement within six months of the date of the claim by the individual concerned, they must refer the matter to the Commission.

Member States may retain or introduce provisions which are more favourable to users than those laid down in the Directive. They may not, in any event, apply tax treatment which is less favourable than that applied in connection with imports or the use on their territory of vehicles brought directly from third countries.

In a similar vein, the Commission adopted on 6 September 2002 a communication entitled “Taxation of passengers cars in the European Union – options for action at national and Community levels” [COM(2002) 431 final] in which it proposes a number of policy measures and actions which should be considered in the area of passenger car taxation in order to provide solutions for the problems faced by citizens and the car industry and thus improve the functioning of the Internal Market. It explores possibilities to modernise and simplify the existing vehicle taxation systems and in particular to include new parameters in the tax bases of passenger car related taxes in order to make them partially, or totally, CO2 based. It also explores possibilities to better co-ordinate and, at a later stage, to approximate passenger car taxation systems and to remove tax obstacles and distortions to free circulation of passenger cars within the Internal Market. As registration tax seems to be at the root of most of the problems faced in this area, the Commission suggests, as a valid option for future action, its gradual reduction and stabilisation at very low levels and preferably its total abolition, over a transitional period of around five to ten years. It adds that this action should be accompanied by other actions such as gradually switching over from revenue from registration tax to that from annual circulation tax and fuel taxes.

4) Procedure

Consultation procedure (CNS/1998/0025)

On 27 May 1998 the European Economic and Social Committee gave its opinion [Official Journal C 235 of 27.07.1998].

On 18 June 1998 the European Parliament approved the Commission proposal subject to three amendments [Official Journal C 210 of 06.07.1998].

On 15 April 1999 the Commission adopted an amended proposal [COM(1999) 165 final – Official Journal C 145 of 26.05.1999].

The proposal is currently being examined by the Council with a view to adoption.

 

Taxation of heavy goods vehicles: Eurovignette Directive

Taxation of heavy goods vehicles: Eurovignette Directive

Outline of the Community (European Union) legislation about Taxation of heavy goods vehicles: Eurovignette Directive

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Taxation

Taxation of heavy goods vehicles: Eurovignette Directive

Document or Iniciative

Directive 1999/62/EC of the European Parliament and of the Council of 17 June 1999 on the charging of heavy goods vehicles for the use of certain infrastructures [See amending acts].

Summary

This Directive replaces Directive 93/89/EEC on the application by Member States of taxes on certain vehicles used for the carriage of goods by road and tolls and charges for the use of certain infrastructures (Eurovignette).

The Directive covers vehicle taxes, tolls and user charges imposed on vehicles intended for the carriage of goods by road and having a maximum permissible gross laden weight of not less than 12 tonnes.

It does not cover:

  • vehicles carrying out transport operations exclusively in the non-European territories of the Member States;
  • vehicles registered in the Canary Islands, Ceuta and Melilla, the Azores or Madeira and carrying out transport operations in these territories or between these territories and Spain or Portugal.

Vehicle taxes

The Directive indicates which taxes are concerned in each individual country. Each Member State is responsible for adopting procedures for levying and collecting these taxes, which are charged by the Member State in which the vehicle is registered.

Member States may not set vehicle tax rates any lower than the minimum rates set out in the Directive. Under the Directive, Member States also have the option, in certain cases and subject to certain conditions, of applying reduced rates or granting exemptions.

Tolls and user charges

The Directive lists the conditions to be met by Member States wishing to introduce and/or maintain tolls or introduce user charges. These conditions are as follows:

  • imposition only on users of motorways or similar roads, bridges, tunnels and mountain passes;
  • application of the principle of no discrimination on the grounds of the nationality of the haulier or the origin or destination of the vehicle;
  • no checks at internal borders;
  • re-examination of maximum rates for user charges on 1 July 2002, and every two years thereafter;
  • application of the principle of proportionality of rates for user charges, based on the duration of the use made of the infrastructures;
  • possibility of varying the rates depending on the categories of emissions from the vehicles and/or the time of day;
  • possibility for two or more Member States to cooperate in introducing a common system for user charges, subject to compliance with certain conditions such as the fair sharing of revenue among Member States.

In addition to the taxes provided for by the Directive, Member States may apply:

  • taxes or charges levied upon registration of the vehicle or imposed on vehicles or loads of abnormal weights or dimensions;
  • parking fees and specific urban traffic charges;
  • charges aimed at combating road congestion.

Member States that install electronic toll systems are responsible for ensuring that their systems are compatible.

Revision of the Directive (2006)

Directive 2006/38/EC of 17 May 2006 amends the Directive with a view to establishing a new Community framework for charging for the use of road infrastructure. This makes it possible to improve the efficiency of the road transport system and ensure the proper functioning of the internal market. The Directive lays down rules for the application by Member States of tolls or user charges on roads, including roads on the trans-European road network and roads in mountainous regions.

From 2012 onwards Directive 2006/38/EC will apply to vehicles weighing between 3.5 and 12 tonnes.

Member States are able to differentiate tolls according to a vehicle’s emission category (“EURO” classification) and the level of damage it causes to roads, the place, the time and the amount of congestion. This makes it possible to tackle the problems of traffic congestion, including damage to the environment, on the basis of the “user pays” and “polluter pays” principles.

References

Act Entry into force Deadline for transposition in the Member States Official Journal
Directive 1999/62/EC

20.7.2000

1.7.2000

OJ L 187 of 20.7.1999

Amending act(s) Entry into force Deadline for transposition in the Member States Official Journal
Directive 2006/38/EC

10.6.2006

10.6.2008

OJ L 157 of 9.6.2006

Directive 2006/103/EC

1.1.2007

1.1.2007

OJ L 363 of 20.12.2006

Related Acts

Proposal for a Directive of the European Parliament and of the Council of 8 July 2008 amending Directive 1999/62/EC on the charging of heavy goods vehicles for the use of certain infrastructures [COM(2008) 436 final – Not published in the Official Journal].
The amendment of the “Eurovignette” Directive should allow Member States to internalise the costs related to pollution and congestion caused by heavy goods vehicles (external costs). They will thus be authorised to integrate in tolls levied on heavy goods vehicles an amount corresponding to the cost of the air and noise pollution due to traffic and the cost of congestion imposed upon other vehicles. This amount will vary according to the Euro emission category, the distance travelled, the location and the time of use of roads. Member States will have to allocate the revenue received in this way to projects relating to the sustainable development of transport. Tolls must be collected through electronic systems which do not create hindrance to the free flow of traffic and which do not produce local nuisance at tollbooths. In addition, the scope of the Directive is extended beyond the trans-European transport network.

Council Directive 2003/96/EC of 27 October 2003 restructuring the Community framework for the taxation of energy products and electricity [Official Journal L 283, 31.10.2003].
This Directive establishes a comprehensive taxation system for energy products and electricity.