ECJ Advocate General Rejects VAT Claim By European Central Bank

by Ulrika Lomas, Tax-News.com, Brussels

15 September 2005

An Advocate General to the European Court of Justice has rejected a claim by the European Central Bank for a EUR44 million value added tax rebate from the German government related to the rental of its premises in Frankfurt, according to a report by Dow Jones.

The ECB had argued that European Community privileges, in addition to its headquarters agreement, supported its claim for the VAT refund from the German authorities.

However, advocate general Christine Stix-Hackl rejected the claim on the grounds that deciding on EC privileges does not fall within the ECJ's remit. She also argued that the ECB cannot claim according to the headquarters agreement as the tax was not itemised.

Nonetheless, the AG stated that the Bank may still have a case if a more thorough examination of European Union VAT regulations revealed the possibility of an exemption to the tax.

Whilst opinions by advocates general are not binding on the Court of Justice, their decisions are followed by the court in around 80% of cases.

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