Brussels, 22/07/2003 (Agence Europe) - On Thursday, the European Commission sent a reasoned opinion to Italy, requesting the country to comply with the provisions of the directive on the tax system applicable to share trading between companies established in different Member States. The Commission considers that the Italian tax administration is applying the directive in a too restrictive way. Italy has two month to respond to the Commission's demands. If it fails to respond, the Commission could take the country to the Court of Justice.
The directive involves the tax system used (amongst other things) for share trading between companies established in different Member States, which is a neutral tax system for such operations. When the "contributing" company receives (in exchange for company shares) shares from the beneficiary company, no tax is imposed on the income or the profits. Member States, however, can subordinate application of this rule on the condition that the associate does not allocate shares that it has received that are higher than the shares it traded before the exchange. The Commission stressed that although a decree had been correctly transposed in principle, the Italian tax authorities subordinate in practice the non-imposition, not only of the fact that the fiscal values of the shares exchanged are equal but also that these values are equal to those registered for accounting reasons (exclusion of the so called double binary" system). The Commission considers that this second conditions is contrary to the directive provisions insofar as it leads to a too restrictive application of the rights agreed to in Community legislation. A Member State is not authorised to unilaterally match the common tax system conditions with other systems outside the directive. The Commission points out that the jurisprudence of the Court, according to which the reduction of fiscal receipts does not constitute an imperative of the general interest, could justify a measure that in principle is contrary to a fundamental freedom in the treaty. The Commission explains that such jurisprudence is also applicable to breaches of the Community directive's provisions.