Nieuwe Europese regelgeving voor BTW op elektriciteit en gas (en)

The European Commission has welcomed the Council's adoption of a Directive that modifies the rules for applying value added tax (VAT) to the supplies of gas and electricity so as to facilitate the Internal Market for energy. The new rules, based on a Commission proposal of 5 December 2002 (see IP/02/1823), will eliminate current problems of double taxation and non-taxation and distortions of competition between traders. They will do so by changing the place of taxation of natural gas in pipelines and of electricity from the place of supply to the place of consumption. The current rules worked adequately in a national context but are not appropriate now with market liberalisation and increasing cross-border supplies of gas and electricity. Member States must implement the new measures by 1 January 2005.

European Commissioner for Taxation Frits Bolkestein commented "I welcome the decision of the Council to adopt new rules on applying VAT to the supplies of gas and electricity. These changes will be in place by the deadline agreed by Energy Ministers in July this year on completely open gas and electricity markets for non-household customers by 2004 and for household customers by 2007".

The new rules

The new rules provide, in the case of supplies of gas through the natural gas distribution system and of electricity, a departure from the basic principle governing the VAT treatment of goods which is that the place of taxation is the place where the goods are physically located.

The rules distinguish between two categories of supplies for gas and electricity: supplies to traders buying with a view to resale and supplies to final consumers, whether or not they are traders.

Supplies of gas and electricity to traders are taxable at the place where this person is established or has a fixed establishment for which the goods are supplied. If the buyer is not established in the same Member State as the supplier, the buyer is liable to pay the VAT through an obligatory reverse charge system. As a result the gas and electricity traders will not have to register for VAT purposes in other Member States which is a major simplification.

Supplies to final consumers are taxable at the place of consumption of the gas and electricity. This is normally the place where the customer's meter is located. This will ensure that the VAT accrues to the Member State where the final consumption takes place.

In order to harmonise and simplify the taxation of the costs of access and use of distribution networks, the Directive also changes the place of supply of services directly connected to the supply of gas and electricity (such as use of the pipeline/cable network to transport the gas or electricity). The place of supply and therefore taxation will be the place of establishment of the customer, where the services are performed for EU traders established in countries other than that of the supplier or for traders outside the Community.

Gas traded in bottles will continue to be subject to the normal VAT because in this case the problem of establishing where the place of supply is does not occur so there is no justification for departing from the normal rules.

The new Directive will take effect on 1 January 2005 by which time all Member States will be required to have brought into force the necessary national implementing legislation.

The full text of the Directive will soon be available on the Europa internet site:

http://europa.eu.int/comm/taxation_customs/whatsnew.htm

For further information concerning the legislative package on the European single market in energy see IP/03/1302.