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C 223/4


Official Journal of the European Communities WRITTEN QUESTION E-3490/97 by Giacomo Santini (UPE) to the Commission (3 November 1997)

17. 7. 98

(98/C 223/04)

Subject: Increase in VAT rates in Italy The Italian Government has recently raised the VAT rates, manifestly departing from the EU policy of harmonizing tax percentages. Specifically as far as the Italian wine sector is concerned, wholesale traders are to be treated differently from other taxable persons entitled to benefit from lower VAT rates under Article 34 of Decree 633/72 of the President of the Republic. Can the Commission say: 1. what attitude it will adopt and what measures, if any, it will take vis-a-vis the Italian Government; ` 2. whether the compensation provided for in the above Decree could be harmonized at the present level and extended to other taxable persons?

Answer given by Mr Monti on behalf of the Commission (30 January 1998) According to the information available to the Commission so far, the new Italian measures on value added tax (VAT) rates are fully in line with Directive 77/388/EEC of 17 May 1977 on the harmonization of the laws of the Member States relating to turnover taxes − common system of value added tax: uniform basis of assessment (1) (sixth VAT Directive) and especially with Articles 12(3)(a), 28(2)(i) and Annex H. The Commission welcomes the abolition of the so-called parking rate as a move in the direction of a simpler and more harmonised system of VAT rates which corresponds to its plans for a new common system of VAT. The basis for Article 34 in the Italian Decree 633/72 is Article 25 of the sixth VAT Directive. The special flat-rate scheme for farmers in Article 25, which was devised for small farmers as an alternative to the normal VAT scheme or to the special VAT scheme for small undertakings covered by Article 24 in the sixth VAT Directive, was to apply essentially to small farmers unable to comply with the obligations imposed by the other two schemes. It should be pointed out that the scheme is not seen to be a means of financial support for small farmers. Therefore, the principles for calculating flat-rate compensation percentages are based on the premise that flat-rate farmers should not receive refunds in excess of the VAT actually charged on their inputs. Also, the general aim is to exclude from the flat-rate system those transactions which, though carried out by an agricultural producer, could not be regarded as constituting a typically agricultural activity. If the farmer enters into competition with tradesmen, manufacturers and service undertakings, the farmer should be subject to the normal scheme or the special scheme for small undertakings in Article 24, and only remain subject to the flat rate scheme system for his agricultural activities. Indeed, as the special VAT scheme in Article 25 is an exception to the normal VAT mechanism it should be subject to a narrow interpretation. In the light of the above it seems, according to the Commission, inappropriate to include for example wholesale traders in the wine industry under the special scheme for small farmers.
(1) OJ L 145, 13.6.1977.

(98/C 223/05)

WRITTEN QUESTION E-3499/97 by Nikitas Kaklamanis (UPE) to the Commission (10 November 1997)

Subject: Commission funding of the floating hospital ‘Hippocrates’ The floating hospital ‘Hippocrates’ (formerly the ‘Paros Express’), which was to have come into operation on completion of refitting, is rusting away unused in the port of Piraeus. The conversion of this passenger vessel into a floating health centre with a helicopter pad to serve the isolated islands in the Aegean has already received Commission funding of Drs 580 million (at current prices almost Drs 1 billion) without being made operational