Brussels, 26/11/2009 (Agence Europe) - On Tuesday 24 November, the European Parliament adopted the consultation report by German Social Democrat Udo Bullmann on a draft Council directive amending various provisions of the VAT Directive on the common system of value added tax, applicable to mixed purpose real estate for professional and private use (see EUROPE 9540). Taking on board the position of its economic and monetary affairs committee, it is opposed to the Council introducing more far-reaching rules concerning the right of deduction for all spending relating to other goods that are part of the business heritage. The scope of the directive would be considerably extended, to the detriment of harmonisation, the rapporteur stressed in its draft legislative resolution. Considering that the Council has not assessed the impact that such extension of the scope of the directive would have on the way the internal market works, MEPs suggest that the European Commission should carry out an analysis.
The proposal for a directive extends the VAT regime applicable to natural gas and electricity to gas deliveries and imports by gas pipeline and tanker carrier vessels. MEPs support the Council's explanation. It is to be noted that the future directive will also apply the same taxation rules to the supply of heat and/or refrigeration as those applicable to natural gas and electricity deliveries. Furthermore, the draft legislation applies tax exoneration foreseen for international bodies to joint companies funded by the EU in the context of Community research and development programmes, which do not exercise any economic activity. Given the lack of such a change, VAT on upstream purchases would unduly fuel the budget of member states for the establishment of joint enterprises. The EP supports this approach. Finally, the directive will integrate into the VAT directive exemption measures negotiated by Bulgaria and Romania during their EU membership, concerning tax relief granted to SMEs and the VAT regime applicable to international passenger transport. (M.B./transl.jl)