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October, 2008
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Contribution to the ZFG newsletter, 31 August 2008.

 
EU Infringement

Sept 18 (Reuters) - Sept 18 (Reuters) - The European Commission launched a string of legal action against European Union states on Thursday for what it called failures to abide by the bloc's laws, ranging from telecoms watchdog independence to tax on lottery winnings.

Below are some of the steps taken and an explanation of the process.

WHAT IS THE PROCEDURE?

The Commission -- executive arm of the EU -- starts an infringement procedure by sending a 'letter of formal notice' to an EU state, requesting information on a disputed issue.

If the Commission is not satisfied with the response, it can send a 'reasoned opinion', or a final warning, setting out why it thinks there has been a breach of EU law.

Unless the member state complies with the reasoned opinion by a deadline, typically two months, the Commission may bring the case before the European Court of Justice (ECJ), the top court in the EU. It can take two years to bring a case.

WHO FACES LEGAL ACTION?

INTERNAL MARKET

Portugal is being taken to court over special rights held by the Portuguese state in power company EDP. Brussels sees those rights as violating the free movement of capital because they make it hard for another company to acquire EDP.

TAX

Britain has been given a final warning to apply a European Court of Justice ruling involving retailer Marks & Spencer. The court had said Britain imposed conditions on tax relief for cross-border groups that made it virtually impossible for tax payers to benefit.

Portugal received a final warning to amend its discriminatory taxation of winners in foreign lotteries. The country does not tax people who win a domestic-based lottery.

Portugal is also being taken to the ECJ for the discriminatory way it taxes non-resident firms that provide services more than it taxes local companies.

Ireland received a final warning for providing a tax exemption for interest payments on savings certificates issued by state-owned institutions but levying tax on similar foreign certificates and securities.

Sweden was given a final warning to change a rule that imposes an exit tax on companies ceasing to be taxable in Sweden.

AVIATION

Greece received a final warning for failing to apply adequately EU rules on civil aviation security, in particular requirements for national compliance monitoring activities of airports and operators.

TELECOMS

The Commission started legal action against Latvia and Lithuania over the lack of independence of their national telecoms regulators.

It also began action against Sweden over concerns that the country's national telecoms regulator lacks sufficient powers.

Bulgaria and Romania are being taken to the court for their lack of a 112 emergency number. All EU states are required to make this number available to all subscribers. Italy got a final warning over the 'ineffective' way it handles 112 calls.

Poland has been referred to the court for regulating the retail price of broadband without a full market review.

Spain received a final warning over the way it designates a so-called universal service provider, or an operator that agrees to provide service across the country, in return for some funding.

(Reporting by Huw Jones; Editing by Dale Hudson) tf.TFN-Europe_newsdesk@thomsonreuters.com cmr

 

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