THE COUNCIL OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European Economic Community, and in particular Articles 99 and 100 thereof,

Having regard to the Sixth Council 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 assessment1, and in particular Article 17 (4) thereof,

Having regard to the proposal from the Commission2,

Having regard to the opinion of the European Parliament3,

Having regard to the opinion of the Economic and Social Committee4,

Whereas Article 8 of Directive 79/1072/EEC5 on the arrangements for the refund of value added tax to taxable persons not established in the territory of the country provides that in the case of taxable persons not established in the territory of the Community, Member States may refuse refunds or impose special conditions;

Whereas there is a need to ensure the harmonious development of trade relations between the Community and third countries based on the provisions of Directive 79/1072/EEC, while taking account of the varying situations encountered in third countries;

Whereas certain forms of tax evasion or avoidance should be prevented,

HAS ADOPTED THIS DIRECTIVE: