Brussels, 15/07/2002 (Agence Europe) - The European Commission has formally asked three Member States to change practices that are not compatible with the Sixth Directive on the common system of VAT
- Spain. The Sixth VAT Directive allows for subsidies in the "deductible proportion" for taxable persons who carry out both activities on which VAT is deductible and activities, which are exempt. The Commission has criticised Spain's application of this law to taxable persons all of whose transactions are taxed, on the sole grounds that they are receiving subsidies, even when they only exercise taxable activities. Moreover, Spanish law imposes a limit on the right to deduct where the goods are acquired with a capital grant. These rules infringe basic VAT law, i.e. the right to deduct VAT.
- Italy. The Commission considers that Italy has not respected the jurisprudence of the Court by exempting tolls for the use of the Frejus and Mont Blanc tunnels between Italy and France from VAT.
- Belgium. The Commission believes that Belgium does not have the right to impose VAT on the resale rights of artists. This is not in compliance with Community legislation
