|
|
EU Court To Rule On VAT Refunds For Telecom Cos Tuesday
BRUSSELS -(Dow Jones)- Europe's top court will rule Tuesday on whether mobile telephone operators across Europe can claim back billions of euros-worth of value-added tax which they paid when acquiring third-generation mobile phone licenses at the peak of the telecoms boom.
U.K. and Austrian telecommunications companies including Vodafone, Hutchinson 3G, mmO2, Orange 3G and T-Mobile have submitted claims totaling more than EUR5 billion.
The judgment by the European Court of Justice is likely to set a precedent for other mobile operators across Europe.
The telecoms companies maintain that the governments acted as commercial entities in selling licenses. On almost all such transactions in Europe, VAT is included in the final bill for purchasing a license. The telecoms companies say they should be able to recoup this VAT paid.
In addition, European Union VAT legislation lists telecoms as one area where governments can be treated as commercial companies.
But governments disagree. They argue that state authorities shouldn't be treated as commercial businesses and that granting licenses isn't a "commercial activity."
"It is a very nuanced argument and in my view there are good arguments on both sides," said tax lawyer Howard Liebman of Jones Day law firm in Brussels.
In 2000 and 2001, governments across Europe auctioned third-generation mobile phone licenses, bringing in sums totaling EUR109 billion, with Germany alone banking EUR51 billion of that total
When the U.K. and Austrian governments rejected the operators' claims for VAT refunds, the operators filed lawsuits. The national courts in the U.K. and Austria have requested that Europe's highest court decide.
A court adviser said in September that the mobile operators shouldn't receive the VAT refunds. The adviser's opinion is followed in about 80% of cases.
-By Carolyn Henson, Dow Jones Newswires; +32 2 741 1484; carolyn.henson@dowjones.com
(END) Dow Jones Newswires"
Posted to the site on 25th June 2007