The Commission has noted that some of these refunds date back to 2000, a situation which breaches the six-month deadline laid down in the Eighth Directive on the common VAT system.

The other member states that have been referred to the ECJ are Finland and Austria.

In the case of Finland, the Commission believes that rules which require foreign traders to appoint a tax representative in certain circumstances breach community law.

Austria meanwhile, has been referred to the European Court over a simplified tax regime applied to passenger transport operators established in other member states or third countries, which does not comply with the Sixth VAT Directive.

The Commission has also decided to send formal requests to Greece, Spain, France and Poland to amend incorrect applications of VAT law.

Greece has received the formal request due to its refusal to exempt the ‘insurance’ aspect of roadside assistance contracts and for the obligation it imposes on non-established taxable persons to appoint a tax representative, although this obligation was removed by an EU Directive.

A formal request has been sent to the Spanish government because domestic legislation imposes VAT on services carried out free of charge, even if they are carried out for the purpose of business.

France is in breach of EU tax law because it has introduced limits not provided for by the Directive in respect of products carried in the luggage of travellers from non-member countries, while Poland has exempted certain internet access services that the EC feels should be taxed.