First report from the Commission to the Council on the application of the common system of value added tax, submitted in accordance with Article 34 of the Sixth Council Directive (77/388/EEC) of 17 May 1977.

Abstract

The final provisions of the Sixth Council Directive of 17 May 1977 on the common system of value added tax (1) stipulate, in Article 34, that: "For the first time on 1 January 1982 and thereafter every two years, the Commission shall, after consulting the Member States, send the Council a report on the application of the common system of value added tax in the Member States. This report shall be transmitted by the Council to the European Parliament." A similar provision had appeared in the Commission's proposal for a Directive, but the Last sentence was added at the express request of Parliament and this amendment, supported by the Commission was accepted by the Council. The definitive text of Article 34 thus reflects the full importance, commensurate with the objectives of the Sixth Directive, that the Community institutions attach to the application of the common system of value added tax. Progress in tax harmonization has not been without its setbacks and problems -as can be seen from a comparison of the Commission's original proposal with the text of the Directive finally adopted by the Council. The gap between the ambitious intentions at the outset and the relatively modest final outcome is bas~cally due to the fact that an instrument on tax matters such as the Sixth Directive inevitably impinges on areas of national legislation in which each Member State is particularly sensitive. Securing the convergence of nine different sets of national laws entailed concessions on all sides, and in many cases involved a reshaping of attitudes that were rooted in the past and which reflected differing fiscal, economic and social structures. Such essential factors could not be ignored by the Council when it was adopting the Sixth Directive, and for its part the Commission was duty-bound to facilitate the adoption of a text that would not Lead to a sharp and immediate Legal caesura at national Level whilst at the same time ensuring that the Directive would become an essential part of the establishment of a European structure in both the economic and fiscal spheres.