Brussels, 19/10/2007 (Agence Europe) - On Thursday 18 October, the European Commission initiated a number of infringement proceedings relating to direct and indirect taxation.
Taxation of energy. New infringement proceedings have been opened against France for failure to implement a Court of Justice ruling instructing it to transpose the 2003 directive on energy taxation (2003/96/EC). Initiation of these new proceedings takes the form of a letter of formal notice. Later, after sending a further reasoned opinion, the Commission may refer the matter to the Court of Justice for a second time and propose that the Court impose a penalty payment under Article 228 of the EC Treaty. On 29 March 2007, the Court ruled that France had failed to fulfil its obligations “by failing, within the period prescribed, to adopt the laws, regulations and administrative provisions necessary to comply with Council Directive 2003/96/EC of 27 October 2003 restructuring the Community framework for the taxation of energy products and electricity”.
Reduced rate of VAT on horses. The Commission has sent the Netherlands a reasoned opinion requesting it stop applying a reduced rate of VAT (6%) to the supply of certain live animals, in particular, horses. The Commission says the normal rate should be applied. If the Netherlands fails to comply with the reasoned opinion within two months, the Commission may refer the matter to the Court of Justice. The Commission has also begun infringement proceedings (letter of formal notice) against seven other member states: Austria, the Czech Republic, France, Germany, Ireland, Italy and Luxembourg.
Direct taxation. A reasoned opinion has been sent to Germany requesting it modify its legislation on cross-border loss deduction. The Commission says that national provisions on income tax are incompatible with the principles of freedom of establishment and the free movement of capital in the single market. (L.C.)