Opinion of Advocate General Bobek in the case Avon Cosmetics.
Neither the derogation authorised by Council Decision 89/534/EEC of 24 May 1989 authorising the United Kingdom to apply, in respect of certain supplies to unregistered resellers, a measure derogating from Article 11(A)(1)(a) of the Sixth Directive 77/388/EEC nor, subject to the referring court's final assessment, national measures implementing that decision — to the extent that that decision and those national measures result in the imposition of VAT on the open market value of products sold via non-VAT registered resellers without taking into account irrecoverable input VAT on demonstration items or other goods and services purchased from third parties by those resellers — infringe the principles of proportionality and fiscal neutrality or Article 27(1) of Sixth Council Directive 77/388/EEC or Article 395 of Council Directive 2006/112/EC.
When seeking authorisation for the derogation granted by virtue of Council Decision 89/534, the United Kingdom was not under an obligation to inform the Commission that unregistered resellers incurred VAT on purchases of goods used for the purposes of their economic activities.
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