July was a busy month for the EU.

I. Infringement Proceedings

The Commission has launched VAT infringement proceedings against the United Kingdom, France, Poland and Portugal; direct tax infringement proceedings against Luxembourg; and indirect tax infringement proceedings against Hungary.

If the relevant national legislations are not amended in order to comply with the respective reasoned opinions, the Commission may decide to refer these matters to the European Court of Justice.

VAT Infringement Proceedings: UK, France, Poland, Portugal

The Commission has requested the United Kingdom to amend its legislation concerning the refund of VAT borne by taxable persons not established in the EU.

The Commisson has also requested France to modify its legislation concerning the VAT rates applied to transactions performed by undertakers.

Poland and Portugal have been requested to change their laws as regards the inclusion of the amount of their car registration taxes within the taxable amount of VAT in the case of supply of road vehicles. The Commission considers the registration tax should not be included in the taxable amount of VAT.

Direct Tax Infringement Proceeding: Luxembourg

The Commission has requested Luxembourg to amend its tax legislation on savings income paid in the form of interest to individuals resident in Luxembourg.

Indirect Tax Infringement Proceeding: Hungary

The Commission has requested Hungary to amend its legislation on environmental charges applicable to beverage containers.

II. Referred to the ECJ

The Commission has decided to refer Italy, Spain, France and Greece to the European Court of Justice. The jurisdictions had failed to introduce the necessary legislative amendments within the prescribed deadline of two months from the issuing of the reasoned opinions.

Italy

– Treating certain taxable persons established in Italy for VAT purposes as if they were non established operators for the purposes of the recovery of the tax borne in Italy.

Spain

– Not applying VAT to certain services supplied by the “registradores de la propiedad”;

– Lottery winnings from lotteries organised abroad are subject to progressive income tax, whereas an exemption from income tax is applied on the income resulting from lotteries organised in Spain by certain institutions.

France

– Applying a reduced VAT rate to services supplied in the framework of legal aid.

Greece

– Under Greek tax rules according to which non resident partnerships in Greece are taxed more heavily (25%) than those resident in Greece (20%).

– Greece exempts from income tax dividends paid by Greek companies to individuals while taxing dividends paid by companies established in other Member States.