CONTINUEThis site uses cookies. By continuing to browse this site you are agreeing to our use of cookies. Find out more.
  1. Front Page
  2. News By Topic
  3. EC Closes Tax Infringement Proceedings Against Spain And Italy

EC Closes Tax Infringement Proceedings Against Spain And Italy

by Ulrika Lomas, Tax-News.com, Brussels

11 January 2007


The European Commission has announced the closure of infringement proceedings against two member states; one against Spain over its tax rules relating to pension contributions paid to non-Spanish funds, and the other against Italy with regard to the manner in which it notifies fiscal acts to non-resident persons.

As a result of a new law passed in Spain in November 2005, pension contributions paid by an employer for its employees and employees' own contributions paid to pension funds governed by the Pension Funds Directive and established in Sweden or in the other member states will enjoy the same tax benefits. Contributions to pension funds from EEA/EFTA members (Norway, Iceland and Liechtenstein) will also enjoy this treatment following the inclusion of the Pension Fund Directive in the EEA Agreement.

Under the old Spanish legislation, pension contributions paid by the employer were exempt from income tax in the hands of the employee, and the employee was able to deduct from income tax the contributions he paid himself only if the contributions were paid to pension institutions established in Spain.

The Commission considered that this Spanish legislation discouraged foreign pension providers from offering their services on the Spanish market and discouraged individuals from taking out voluntary pension insurance with foreign institutions.

Meanwhile, Italy has modified the procedure applied for notifying fiscal acts to non-resident persons. According to the new provisions, local tax authorities will notify fiscal acts to non-resident persons at their registered address abroad.

Under the previous regime, notifications to non resident persons were carried out by displaying a notice on the Commune's notice board and the appeal period started to run 8 days after this formality, while resident persons received notification of fiscal acts at their home address.

The Commission had sent a letter of formal notice to Italy because it considered that the old rules infringed the principle of non-discrimination based on nationality and the freedom of movement and establishment.

TAGS: Italy

To see today's news, click here.

 















Tax-News Reviews

Cyprus Review

A review and forecast of Cyprus's international business, legal and investment climate.

Visit Cyprus Review »

Malta Review

A review and forecast of Malta's international business, legal and investment climate.

Visit Malta Review »

Jersey Review

A review and forecast of Jersey's international business, legal and investment climate.

Visit Jersey Review »

Budget Review

A review of the latest budget news and government financial statements from around the world.

Visit Budget Review »



Stay Updated

Please enter your email address to join the Tax-News.com mailing list. View previous newsletters.

By subscribing to our newsletter service, you agree to our Terms and Conditions and Privacy Policy.


To manage your mailing list preferences, please click here »