Brussels, 13/01/2005 (Agence Europe) - The Commission has decided to take action at the Court of Justice against Portugal concerning the law on income tax. It formally calls on Greece to amend its legislation on taxation of corporate capital.
In its law on income tax, Portugal gives tax relief on added value made on the sale of permanent residences on condition that the profit is reinvested on Portuguese territory in the acquisition of another main residence. The Commission considers that this provision is to the disadvantage of migrant workers, whether they be Portuguese or foreign nationals. The Portuguese authorities, which received a letter of formal notice in July 2004, consider that the tax exoneration is justified mainly because of the constitutional obligation to provide aid for the purchase and maintenance of residencies in Portugal.
Greece receives capital duty when a company transfers its registered seat to another Member State or from a third country to Greece, but exempts agricultural and maritime companies. The Commission considers these rules run counter to the provisions of Directive 69/335/EEC relating to indirect taxation on the raising of capital.