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The European Commission requests UK to ensure reimbursement of taxes paid in violation of EU law
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30/09/2010 00:00:00

The European Commission has formally requested the United Kingdom to change its Finance Act 2007 to ensure that the period during which taxes levied in breach of EU rules can be reimbursed is proportional to the objectives pursued. Under EU law, the reimbursement of taxes paid in violation of EU rules should be granted according to the national rules on internal tax reimbursements and should not be made impossible or excessively difficult. A retroactive limitation of the rights of taxpayer in this respect contravenes this principle. The request of the Commission takes the form of a 'reasoned opinion', the second step of an EU infringement procedure. In the absence of a satisfactory response within two months, the Commission may refer the United Kingdom to the EU's Court of Justice.

The UK's Finance Act 2007 limits to six years the period during which taxes levied in breach of EU rules can be reimbursed, thereby preventing the exercise of rights conferred by EU law in certain cases. This could happen for example in case a judgement of the Court of Justice of the European Union finding a tax unlawful is rendered after these 6 years. This measure seems to exceed the limits of national procedural autonomy stemming from Article 4(3) of the Treaty on the Functioning of the European Union.

Since the limitation period introduced does not provide for any transitional rules (except in certain circumstances), it is therefore almost impossible to exercise the rights conferred by EU law in the area of direct taxation. This is particularly true for cases that were initiated before 2007 concerning taxes paid more than 6 years ago.

    For the press releases issued on infringement proceedings in the area of taxation or customs see:

    For the most up-to-date general information on the infringement proceedings initiated against Member States, see:

    For more information on EU infringement procedures, see MEMO/10/457


    For more information, please contact the London press office on 020 7973 1971.

    Please note: all amounts expressed in sterling are for information purposes only.

    Last update: 31/10/2010  |Top