Brussels, 18/07/2008 (Agence Europe) - In a ruling issued on 17 July 2008, the European Court of Justice found that Italy's VAT amnesty allowing people registered from VAT to escape from their tax liabilities runs counter to the spirit and the aim of the EU's sixth VAT Directive (2006/112/EC).
Provisions of Italy's Law Number 289 of 27 December 2002 allowing VAT taxpayers to voluntarily review their tax returns for the 1998, 1999, 2000 and 2001 tax years. Beyond a certain threshold, these extra contributions exonerated the people in question from any controls or penalties on the said tax years. Italy argues that the measure made it possible to rapidly recover a large amount of tax but the Court responded that the authorities could also have recovered the monies through effective controls and the measure in question did not make it possible to verify the respect of tax rules in Italy. By granting this tax amnesty to a full category of taxpayers, and the ruling concludes that Italy therefore failed to meet its EU obligations. (C.D. transl fl)