Greece To Reimburse Wrongly Paid Taxes, EC Rules

by Ulrika Lomas, Tax-News.com, Brussels

13 October 2009

The European Commission (EC) has addressed two reasoned opinions to Greece, requesting that the country’s legislation provides for the refund of wrongly paid value added tax (VAT) and other taxes.

The reasoned opinions concern Greece’s treatment of requests for the refund of wrongly paid taxes, including VAT. The rights that taxpayers derive from Community law include the right to obtain the repayment of taxes paid when they are levied by Member States in violation of Community law.

Where a Member State is found to have breached EC law, in particular by imposing a tax in violation of Community requirements, the right to obtain a refund of amounts of tax paid but not due is the consequence and complement of the rights conferred on individuals by EC law.

The procedural conditions governing the actions for safeguarding rights which individuals derive from EC law are those laid down in national law. However, such national rules cannot be less favorable than those governing similar domestic actions (principle of equivalence), nor may they render the exercise of rights conferred by EC law virtually impossible or excessively difficult (principle of effectiveness).

Citing examples of infringement cases 2007/4407 and 2007/4581, the EC considers in both cases that Greece has breached EC law, since it has not adopted a legal or administrative instrument to ensure the reimbursement of unduly levied charges.

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