Treasury to fight EU assault tooth and nail

Treasury to fight EU assault tooth and nail

An unprecedented number of tax cases are expected to work their way for the European Court in 2007, according to tax experts

Next year is going to be a busy for the European Court of Justice and a
worrying one for officials at the Treasury.

Tax experts have predicted that an unprecedented number of tax cases will
work their way for the European Court in 2007, probably at a rate of one a week.

Advisers are still sifting through the substantial case list, but a number of
cases that will have an impact on the UK tax system have already been picked
out.

In Germany the Holböck case on inbound dividends from a third country, and
the Lasertec case on thin capitalisation in a third country, are expected to
have repercussions for the UK if the tax payer wins.

These cases, involving other member states, will come on top of other cases
challenging the UK directly.

Decisions on the Class IV Advanced Corporation Tax (ACT) case and the franked
investment income case are due later this month. Then there is the small matter
of the forthcoming Vodafone CFC and dividend case, as well as British Telecom
case on remedies for taxes improperly levied.

Taxpayers hoping to take advantage of a wave of challenges flooding the ECJ,
however, have been warned that government is likely to fight any ECJ challenges
to the bitter end.

Simon Airey, a director at DLA Piper, said that ECJ judgements were very
broad and principles based.

This opened the door for government to challenge the finer details of an ECJ
ruling that initially may have been welcomed as a victory for the taxpayer.

Read the ECJ tax case list at
www.ec.europa.eu/index_en.htm

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