Article 28c Sixth Directive 77/388/EEC

A. Exempt supplies of goods

Without prejudice to other Community provisions and subject to conditions which they shall lay down for the purpose of ensuring the correct and straightforward application of the exemptions provided for below and preventing any evasion, avoidance or abuse, Member States shall exempt:

(a)supplies of goods, as defined in Article 5, dispatched or transported by or on behalf of the vendor or the person acquiring the goods out of the territory referred to in Article 3 but within the Community, effected for another taxable person or a non-taxable legal person acting as such in a Member State other than that of the departure of the dispatch or transport of the goods.

This exemption shall not apply to supplies of goods by taxable persons exempt from tax pursuant to Article 24 or to supplies of goods effected for taxable persons or non-taxable legal persons who qualify for the derogation in the second subparagraph of Article 28a (1) (a);

(b)supplies of new means of transport, dispatched or transported to the purchaser by or on behalf of the vendor or the purchaser out of the territory referred to in Article 3 but within the Community, effected for taxable persons or non-taxable legal persons who qualify for the derogation provided for in the second subparagraph of Article 28a (1) (a) or for any other non-taxable person;

(c)the supply of goods subject to excise duty dispatched or transported to the purchaser, by the vendor, by the purchaser or on his behalf, outside the territory referred to in Article 3 but inside the Community, effected for taxable persons or non-taxable legal persons who qualify for the derogation set out in the second subparagraph of Article 28a (1) (a), when the dispatch or transport of the goods is carried out in accordance with Article 7 (4) and (5), or Article 16 of Directive 92/12/EEC.

This exemption shall not apply to supplies of goods subject to excise duty effected by taxable persons who benefit from the exemption from tax set out in Article 24;

(d)the supply of goods, within the meaning of Article 28a (5) (b), which benefit from the exemptions set out above if they have been made on behalf of another taxable person.

B. Exempt intra-Community acquisitions of goods

Without prejudice to other Community provisions and subject to conditions which they shall lay down for the purpose of ensuring the correct and straightforward application of the exemptions provided for below and preventing any evasion, avoidance or abuse, Member States shall exempt:

(a)the intra-Community acquisition of goods the supply of which by taxable persons would in all circumstances be exempt within the territory of the country;

(b)the intra-Community acquisition of goods the importation of which would in all circumstances be exempt under Article 14 (1);

(c)the intra-Community acquisition of goods where, pursuant to Article 17 (3) and (4), the person acquiring the goods would in all circumstances be entitled to full reimbursement of the value added tax due under Article 28a (1).

C. Exempt transport services

Member States shall exempt the supply of intra-Community transport services involved in the dispatch or transport of goods to and from the islands making up the autonomous regions of the Azores and Madeira as well as the dispatch or transport of goods between those islands.

D. Exempt importation of goods

Where goods dispatched or transported from a third territory are imported into a Member State other than that of arrival of the dispatch or transport, Member States shall exempt such imports where the supply of such goods by the importer as defined in Article 21(4) is exempt in accordance with paragraph A.

Member States shall lay down the conditions governing this exemption with a view to ensuring its correct and straightforward application and preventing any evasion, avoidance or abuse.

E. Other exemptions

1.In Article 16:

—paragraph 1 shall be replaced by the following:

—‘1. Without prejudice to other Community tax provisions, Member States may, subject to the consultations provided for in Article 29, take special measures designed to exempt all or some of the following transactions, provided that they are not aimed at final use and/or consumption and that the amount of value added tax due on cessation of the arrangements on situations referred to at A to E corresponds to the amount of tax which would have been due had each of these transactions been taxed within the territory of the country:

A. imports of goods which are intended to be placed under warehousing arrangements other than customs;

B. supplies of goods which are intended to be:

(a)produced to customs and, where applicable, placed in temporary storage;

(b)placed in a free zone or in a free warehouse;

(c)placed under customs warehousing arrangements or inward processing arrangements;

(d)admitted into territorial waters:

—in order to be incorporated into drilling or production platforms, for purposes of the construction, repair, maintenance, alteration or fitting-out of such platforms, or to link such drilling or production platforms to the mainland,

—for the fuelling and provisioning of drilling or production platforms;

(e)placed, within the territory of the country, under warehousing arrangements other than customs warehousing.

For the purposes of this Article, warehouses other than customs warehouses shall be taken to be:

—for products subject to excise duty, the places defined as tax warehouses for the purposes of Article 4 (b) of Directive 92/12/EEC,

—for goods other than those subject to excise duty, the places defined as such by the Member States. However, Member States may not provide for warehousing arrangements other than customs warehousing where the goods in question are intended to be supplied at the retail stage.

Nevertheless, Member States may provide for such arrangements for goods intended for:

—taxable persons for the purposes of supplies effected under the conditions laid down in Article 28k,

—tax-free shops within the meaning of Article 28k, for the purposes of supplies to travellers taking flights or sea crossings to third countries, where those supplies are exempt pursuant to Article 15,

—taxable persons for the purposes of supplies to travellers on board aircraft or vessels during a flight or sea crossing where the place of arrival is situated outside the Community,

—taxable persons for the purposes of supplies effected free of tax pursuant to Article 15, point 10.

The places referred to in (a), (b), (c) and (d) shall be as defined by the Community customs provisions in force;

C. supplies of services relating to the supplies of goods referred to in B;

D. supplies of goods and of services carried out:

(a)in the places listed in B (a), (b), (c) and (d) and still subject to one of the situations specified therein;

(b)in the places listed in B (e) and still subject, within the territory of the country, to the situation specified therein.

Where they exercise the option provided for in (a) for transactions effected in customs warehouses, Member States shall take the measures necessary to ensure that they have defined warehousing arrangements other than customs warehousing which permit the provisions in (b) to be applied to the same transactions concerning goods listed in Annex J which are efected in such warehouses other than customs warehouses;

E. supplies:

—of goods referred to in Article 7 (1) (a) still subject to arrangements for temporary importation with total exemption from import duty or to external transit arrangements,

—of goods referred to in Article 7 (1) (b) still subject to the internal Community transit procedure provided for in Article 33a,

—as well as supplies of services relating to such supplies.

By way of derogation from the first subparagraph of Article 21 (1) (a), the person liable to pay the tax due in accordance with the first subparagraph shall be the person who causes the goods to cease to be covered by the arrangements or situations listed in this paragraph.

When the removal of goods from the arrangements or situations referred to in this paragraph gives rise to importation within the meaning of Article 7 (3), the Member State of import shall take the measures necessary to avoid double taxation within the country.’

,

—the following paragraph shall be added:

—‘1a. Where they exercise the option provided for in paragraph 1, Member States shall take the measures necessary to ensure that intra-Community acquisitions of goods intended to be placed under one of the arrangements or in one of the situations referred to in paragraph 1 (B) benefit from the same provisions as supplies of goods effected within the country under the same conditions.’

2.In Article 16 (2):

—‘intra-Community acquisitions of goods made by a taxable person and’ shall be added after ‘may opt to exempt’ and ‘outside the Community’ shall be added after ‘export them’,

—the following subparagraphs shall be added:

—‘When they take up this option the Member States shall, subject to the consultation provided for in Article 29, extend the benefit of this exemption to intra-Community acquisitions of goods by a taxable person, imports for and supplies of goods to a taxable person intending to supply them, as they are or after processing, under the conditions laid down in Article 28c (A), as well as supplies of services relating to such supplies, up to a maximum equal to the value of his supplies of goods effected under the conditions laid down in Article 28c (A) during the preceding twelve months. Member States may set a common maximum amount for transactions which they exempt under the first and second subparagraphs.’

3.Member States shall take specific measures to ensure that value added tax is not charged on the intra-Community acquisition of goods effected, within the meaning of Article 28b (A) (1), within its territory when the following conditions are met:

—the intra-Community acquisition of goods is effected by a taxable person who is not established in the territory of the country but who is identified for value added tax purposes in another Member State,

—the intra-Community acquisition of goods is effected for the purpose of a subsequent supply of goods made by a taxable person in the territory of the country,

—the goods so acquired by this taxable person are directly dispatched or transported from another Member State than that in which he is identified for value added tax purposes and destined for the person for whom he effects the subsequent supply,

—the person to whom the subsequent supply is made is a taxable person or a non-taxable legal person who is identified for value added tax purposes within the territory of the country,

—the person to whom the subsequent supply is made has been designated in accordance with Article 21(1)(c) as the person liable for the tax due on the supplies effected by the taxable person not established within the territory of the country.