Keywords
Summary

Keywords

Tax provisions - Harmonization of laws - Turnover tax - Common system of value-added tax - Flat-rate scheme for farmers - Application of flat-rate compensation percentages to supplies of goods and services made to recipients themselves subject to the flat-rate scheme or to non-taxable persons - Not permissible .

( Council Directive 77/388, Art . 25 ( 5 ) and ( 8 ) )

Summary

The effect of Article 25 ( 5 ) and ( 8 ) of the Sixth Council Directive ( 77/388/EEC ) on the harmonization of the laws of the Member States relating to turnover taxes is that, in the context of the flat-rate scheme for farmers, the flat-rate compensation percentages provided for in Article 25 ( 3 ) should not be applied when goods or services are supplied by a farmer subject to the flat-rate scheme to a farmer to whom the same scheme applies or to a non-taxable person . In such cases compensation for the value-added charge on inputs is obtained by the payment of an all-in price for those goods or services which is deemed to include that charge; thus the invoicing of the flat-rate amount would serve no useful purpose since the buyer and the recipient of the service would be unable to deduct the input tax .