In the past month, the Commission has requested an end to discriminatory practices in the area of indirect taxation. The various requests are summarised below:

The European Commission has formally requested:

Portugal: requested to change its law as regards the difference in car tax-suspension periods granted to “registered” and “recognised” vehicle traders. The Commission considers that the difference in treatment leads to discrimination of vehicles produced in Member States other than Portugal.

Poland: requested to bring its national rules governing the exclusions of the right to deduct VAT due or paid on certain specific motor vehicles and on the fuel acquired to propel them in line with the provisions of the VAT Directive; and to bring its national rules on the application of VAT to cross-border passenger transport services (i.e. buses registered abroad), into line with the provisions of the VAT Directive.

Spain: requested to bring its national rules governing the right to deduct VAT on imports into line with the provisions of the VAT Directive.

The Netherlands: requested to amend its legislation with regard to the VAT exemption applied to the provision of personnel in certain sectors from VAT.

Sweden, Denmark, Finland and Austria: requests for information in the form of letters of formal notice about their legislation regarding the application of certain exemptions under the VAT Directive.

• Denmark exempts all supplies carried out by charitable or otherwise non-profit-making associations and the like in connection with their running business.
• Austria should broaden the scope of its VAT exemption rules so as to encompass certain supplies by certain non-profit organisations to their members.
• Under Swedish VAT law, the definition of “economic activity” does not refer to the criteria under the VAT Directive, but is directly linked to the definition and criteria of economic activity under national income tax law. These criteria are irrelevant and potentially misleading from the point of view of VAT.