Portugal en Italië gedaagd voor Hof van Justitie vanwege ongeoorloofde BTW-tariefering (en)

The Commission has decided to send a formal request to Italy to change its law that limits the right of traders to deduction of VAT in respect of mobile phones services. The request is in the form of a reasoned opinion, the second stage of the infringement procedure laid down in Article 226 of the EC Treaty. In addition the Commission has decided to refer Italy to the Court of Justice concerning the tax amnesty which it applies in the area of VAT and to refer Portugal to the Court because the VAT rate applied to tolls on the two bridges over the river Tagus in Lisbon is not in conformity with Community law.

Italy - limitation of right of deduction in respect of mobile phones

In principle, taxable persons are entitled to deduct VAT on the goods and services they use for their taxable activities. However, by virtue of Article 17(6) of the Sixth VAT Directive (Council Directive 77/388/EEC of 17 May 1977), the Member States may, in the absence of harmonised Community rules on non-deductible expenditure, retain all the exclusions provided for under their national laws at the time of the Directive's entry into force in their territory (which in Italy's case was in 1979).

However, an Italian decree of 13 May 1991 imposes a 50% limit on the deductibility of VAT on mobile phone services. Since this measure was introduced in 1991, the Italian legislation breaches the Sixth VAT Directive and cannot be covered by the derogation in Article 17(6) of the Sixth VAT Directive.

Since Italy has not presented observations in response to the letter of formal notice, the Commission has decided to send it a reasoned opinion.

Italy: Tax amnesty scheme for VAT ("condono")

In its 2003 Finance Act, the Italian Government approved tax measures (the "condono") which allow taxpayers to regularise various unpaid taxes, including VAT. Under the act, the Italian administration waives the right to future controls on periods of non-payment of VAT and allows taxpayers to "wipe the slate clean" by paying the State a fixed sum, if no return was filed, or a percentage of the VAT initially declared on sales and purchases in the reference period if a return was filed. The waiver of further controls on unpaid VAT applies even if it is proven that irregularities were committed.

The Commission considers that the scheme is in breach of the 6th VAT Directive which requires all supplies of goods and services within the country to be taxed and obliges Member States to take the necessary steps to ensure that taxable persons fulfil their obligation to declare and pay VAT.

In the Commission's view, the Italian measures go beyond the margin of discretion that Member States enjoy for adjusting their controls on the basis of the human and technical resources available to them. Italy's action appears more like a blank and indiscriminate renunciation of controls on and collection of VAT which contravenes the obligations it has assumed regarding the application of Community law.

The Commission further believes that the Italian measures jeopardise the proper collection of Community own resources, part of which consists of a percentage of each Member State's VAT base.

Member States are required to exercise due diligence in the collection of own resources and are only discharged of their responsibilities by `force majeure'. Member States are therefore responsible for establishing appropriate infrastructures to prevent the loss of own resources through errors, negligence or their failure to enforce the system properly.

The Commission has not received a satisfactory answer from Italy to the reasoned opinion that it sent to Italy in October 2004 (see IP/04/1243)

Portugal: reduced VAT rate for use of Tagus bridge

According to Portuguese legislation, a reduced VAT rate of 5% applies to the use of the two toll bridges over the Tagus in Lisbon. The Commission takes the view that such a reduced rate breaches Community Law.

The Portuguese authorities stated before the European Court of Justice in Case C-276/98 (Commission of the European Communities against the Portuguese Republic) that the (one at that time) bridge in question was operated by a public body. That would imply that the services in question should not be subject to VAT at all (under Article 4(5) of the Sixth VAT Directive).

However, in their reply to the letter of formal notice sent by the Commission in the context of the present procedure, the Portuguese authorities stated that it is in fact a commercial enterprise belonging to a private consortium which operates the two toll bridges that now exist. If this were the case, the services in question should be subject to VAT at the standard rate.

The Portuguese authorities further contend that, under transitional provisions of the Sixth VAT Directive, Portugal is entitled to apply a reduced rate, not lower than 12%, to these services. However, the Commission, in the first place, takes the view that Portugal is not entitled to apply those transitional provisions to the case at hand (the standard rate being therefore mandatory) and, in the second place, notes that, even if the Portuguese position were to be upheld and the transitional provision were deemed to be applicable, it would by no means cover the 5% rate currently applied in Portugal given that, as said above, it would only entitle to apply a reduced rate not lower than 12%.

The latest information on infringement procedures concerning all Member States can be found at the following site:

http://europa.eu.int/comm/secretariat_general/sgb/droit_com/index_en.htm