The Commission commenced further action against a number of Member States in relation to tax, direct and indirect, discrimination.

The following is a list of actions taken from the Commission press releases:

Spain:

Sent a formal request to amend its discriminatory anti-abuse rules in the corporate tax area, according to which income originating from specific Member States or territories of the EU is taxed more heavily than domestic income.

Portugal:

Sent a formal request to amend its legislation concerning the tax rules applicable to investments held in financial institutions established outside Portugal. The income flowing from these investments may, in certain cases, be more heavily taxed than the income of investments held in Portugal.

Greece:

Issued a Reasoned Opinion concerning its treatment of requests for the refund of unduly paid taxes following the Judgement of the European Court of Justice in Case C-62/93. The rights taxpayers derive from Community VAT law include the right to obtain the repayment of taxes paid when Member States failed to transpose it correctly.

Belgium:

Sent formal requests to end two cases of tax discrimination. The first case concerns income tax relief for the cost of nurseries. Such relief is available only if the children are placed in Belgian nurseries, but not if they are placed in foreign nurseries. The second case concerns foreign artists and sportsmen. The Belgian tax law may lead to higher taxation for foreign artists and sportsmen than for artists and sportsmen resident in Belgium.

Poland:

Formally requested to bring its legislation on the application of certain VAT rules on place of supply of services into line with the provisions of the VAT Directive.

Lithuania:

Sent a reasoned opinion about its rules under which interest paid to foreign companies, investment funds and pension funds is taxed more heavily than interest paid to comparable domestic recipients.

Latvia:

Sent a request for information in the form of a letter of formal notice about its rules under which dividends paid to non-resident individuals may be taxed more heavily than dividends paid to residents.

In addition, the European Commission has formally requested Poland, the Netherlands, Portugal, France, Italy, Finland, Greece and the Czech Republic to amend their legislation with regard to the application of the special VAT ‘margin’ scheme for travel agents.

Also, the EU Commission authorised tax reduction schemes by the Italian and French authorities to promote the use of biofuel, and the promotion of investments in SME's respectively.

The French scheme, to which the Irish BES is somewhat comparable, is of interest because of the criteria the Commission appear to have applied in determining whether it contravened State Aid rules. “The Commission has assured itself that the distortions in competition caused by the scheme will be limited since it creates near-market conditions by offering a variety of investments, all of which are eligible for tax benefits.” Taxpayers have the option of investing either directly in an SME, via an investment fund or via holding companies such as investor clubs. Moreover, the scheme is part of a wider package of measures to promote SME activity.