Brussels, 22/06/2012 (Agence Europe) - On Thursday 21 June, the European Commission sent reasoned opinions (warning letters) to five member states for breaking VAT rules, excise duty and tax deals with non-EU countries. If the member states fail to comply with EU rules in the next two months, they may be sent to the European Court of Justice.
- VAT. The United Kingdom must change its VAT rules granting lower VAT for the supply and installation of energy saving materials because they are not included in Annex III to the EU VAT directive. France must levy the full rate of VAT on personal services currently subject to a reduced rate (gardening, computer courses and assistance at home, maintenance and temporary security services at first and second homes) which the Commission says are not “services at home” under EU rules.
- Excise duty. Portugal must change its rules banning the sale of cigarettes three months after the date of the tax label on the cigarette box, which the Commission says is disproportionate vis-à-vis clamping down on fraud and contravenes EU Directive 2008/118/EC, which requires member states to ensure that tax labels do not infringe the free circulation of goods subject to excise duty. Hungary must change its rules granting full excise duty exoneration for 50 litres of distilled fruit drinks (pálinka) for personal use each year, because under Directive 92/83/EEC, it is only allowed to grant a 50% reduction on the normal tax rate.
- Customs. Bulgaria must scrap various measures in a technical assistance deal with the United States signed before Hungary joined the EU whereby goods financed by the US can be imported duty-free, along with goods and services bought in Bulgaria using technical assistance programme monies. Neither exemption is allowed under EU legislation. When it joined the EU, Bulgaria was supposed to have altered or cancelled the agreement. (FG/transl.fl)