WRITTEN QUESTION E-2294/01

by Erik Meijer (GUE/NGL) to the Commission

(31 July 2001)

Subject: Elimination of differences of interpretation with regard to VAT refunds

1. Does the Commission recall the judgment of the Court of Justice of the European Communities of 3 June 1992 (Case C-287/91) in which Italy was found to have acted in breach of the Eighth VAT Directive 79/1072/EEC(1)?

2. What implications will adoption of the Commission proposal of 17 June 1998(2) to amend Directive 77/388/EEC(3) have for the refund of VAT by Italy to foreign firms?

3. Are there still differences of opinion on the application of the 1992 judgment, with Italy being accused of non-compliance, not only by firms but also by Member States?

4. In the Commission's view, how long can such differences of opinion on conflicting interpretations continue?

5. If the answer to question 3 above is yes, what is the Commission doing to resolve this difference of opinion before the new version of Directive 77/388/EEC enters into force?

6. Are there any other differences of opinion relating to agreements on tax harmonisation and cross-border refunds? How does the Commission envisage resolving them?

(1) OJ L 331, 27.12.1979, p. 11.

(2) COM(1998) 377 final OJ C 219, 15.7.1998, p. 16.

(3) OJ L 145, 13.6.1977, p. 1.

Answer given by Mr Bolkestein on behalf of the Commission

(15 October 2001)

1. The Commission knows of no difference of opinion concerning Italy's application of the Court of Justice judgment of 3 June 1992 (Case C-287/91).

2. It is true that in 1994 the Commission sent a reasoned opinion to the Italian authorities, on the basis of Article 228 (formerly 171) of the EC Treaty, asking them to take certain measures entailed by application of that judgment. Since Italy complied with this request the proceedings were dropped.

3. For some time the Commission has had new reports of significant delays in the reimbursement of VAT to foreign taxable persons by the Italian authorities. The Commission again contacted them on this subject. At the end of 2000 the Italian Government announced it was adopting new measures which should reduce the delays.

According to the most recent information at the Commission's disposal, these measures have not yet achieved the desired effect, and so the Commission may decide to initiate new infringement proceedings against Italy in the near future.

4. It should be pointed out that as far back as June 1998 the Commission presented a proposal for a Council Directive amending Directive 77/388/EEC as regards the rules governing the right to deduct value added tax, with the objective of replacing the VAT refund procedure laid down in the Eighth VAT Directive, (Council Directive 79/1072/EEC of 6 December 1979 on the harmonisation of the laws of the Member States relating to turnover taxes Arrangements for the refund of value added tax to taxable persons not established in the territory of the country) with another system for recovering VAT owed or paid in another Member State. Under the proposed system taxable persons could recover VAT directly in the VAT declarations they submitted in the Member State where they were established.

The aim of the proposal is to resolve the problem of delays with refunds and also substantially to simplify matters for traders by enabling them to recover VAT charged to them in another Member State in the same way as their national VAT.

Despite universal support from traders and a favourable opinion from Parliament and the Economic and Social Committee, the Council has not yet been able to reach unanimous agreement on this proposal.