Italy Asked To Amend VAT Provisions In Tax Amnesty

by Ulrika Lomas, for LawAndTax-News.com, Brussels

21 October 2004

The European Commission announced this week that it has formally asked Italy to amend the VAT section of the tax amnesty scheme it adopted last year.

The measure in question grants taxpayers immunity for previous tax periods in return for a one-off payment exempting them from all administrative controls.

However, this means that no further legal action may be taken against the person concerned even if subsequent proof of accounting irregularities comes to light.

The EC announced on Tuesday that it considers that such a blanket and indiscriminate renunciation of controls on VAT and the collection of any additional sums undermines the functioning of the harmonised system and the proper collection of Community resources.

The Commission went on to explain that it considers that the scheme is in breach of the 6th VAT Directive which requires all supplies of goods and services within the country to be taxed, and obliges EU member states to take the necessary steps to ensure that taxable persons fulfil their obligation to declare and pay VAT.

The request has been issued in the form of a reasoned opinion, which represents the second stage of the infringement procedure provided for in Article 226 of the EC Treaty. If it does not receive a satisfactory reply within two months, the Commission may bring the matter before the European Court of Justice.

Recommended