TAXATION: SPAIN GIVEN DEROGATION FROM SIXTH VAT DIRECTIVE TO TACKLE TAX EVASION.

By virtue of a Council Decision of December 23, 2005, Spain is authorised to dispense with certain provisions of the Sixth VAT Directive (77/388/EEC) until the end of 2009. The Directive does allow special authorisation for member states to introduce specific exemptions to simplify the charging of taxes or to avoid certain forms of fraud or tax evasion. The Council recalls in this context that the European Commission presented a proposal for a Directive on March 16, 2005 amending the 1977 legislation with a view to simplifying the procedure for charging value added tax and to assist in countering tax evasion and avoidance (COM(2005)89). This new Directive notably covers legislation on similar situations to those identified by Spain in its request.

In practical terms, the derogations requested by Spain are intended to...