Brussels, 21/06/2013 (Agence Europe) - On 20 June 2013, the European Commission sent reasoned opinions (warning letters) to nine member states over infringements of the EU tax rules. Belgium, Greece, Finland, Italy and Poland must notify the Commission of transposition into their rule books of the EU directive on administrative cooperation in the tax domain that should have come into force on 1 January 2013. The directive is crucial for tackling tax evasion by introducing closer cooperation and automatic exchange of information between tax authorities on various types of income (see EUROPE 10865). Greece must put an end to its discriminatory taxation of milk, dairy products and milk, which are taxed less (or not taxed at all) if they come from Greece than if they come from other member states. Greece applies a levy on local and imported meat that is used to finance ELOGAK, a public body that gives Greek farmers subsidies, thus granting a discriminatory advantage to Greek products. Portugal is required to alter its discriminatory tax rules for foreign companies owned by Portuguese residents. Companies whose headquarters or management are not located in Portugal are required to pay company tax on revenue acquired in Portugal. Like other taxpayers, they can be granted a number of tax incentives, but only if more than 25% of their capital is owned by people living in Portugal, which amounts to an obstacle to the free movement of capital. Spain is required to change its discriminatory rules on investment in non-resident companies, whose dividends to Spanish companies are treated differently from dividends from Spanish companies, which amounts to an obstacle to the free movement of capital. A Spanish company investing in a foreign company has to meet more onerous requirements (revenue volume and percentage participation of shareholders) to benefit from the tax incentives, for example. In other cases, the tax incentive for dividends from Spanish companies does not apply for dividends from non-resident companies. The United Kingdom must change its rules to ensure that VAT is repaid to the end consumer by manufacturers of goods sold at a reduced rate (due to manufacturing defects, for example) by a third party, such as a retailer. For such sales, EU VAT rules give consumers the right to repayment of the VAT by the manufacturer, which the legislation currently in force in the UK does not allow. The UK explained on 24 May 2012 that it was planning to rectify the situation.
The nine countries now have two months to comply with the Commission's requests, failing which they may be sent to the European Court of Justice. (FG/transl.fl)