The Commission has decided to send the following countries formal requests to rectify incorrect applications of VAT rules: Greece, for its refusal to exempt the “insurance” aspect of roadside assistance contracts and for the obligation it imposes on non-established taxable persons to appoint a tax representative, although this obligation was removed by Directive 2000/65/EC; Spain, because Spanish legislation imposes VAT on services carried out free of charge even if they are carried out for the purpose of business; France, because it has introduced limits not provided for by the Directive in respect of products carried in the luggage of travellers from non-member countries; and Poland, for exempting certain internet access services that should be taxed. The requests take the form of reasoned opinions (the second phase in the infringement procedure laid down by Article 226 of the Treaty). If the Member States concerned fail to bring their legislation into line within two months of receipt of the reasoned opinion, the Commission could take the matter to the Court of Justice.

The European Commission has decided to take the Grand Duchy of Luxembourg to the Court of Justice for its lengthy delays in refunding VAT to taxable persons not established in its territory. Refunds are currently paid with considerable delays, some date back to 2000 and are still outstanding. This is a breach of the six-month deadline laid down in the Eighth Directive on the common VAT system (79/1072/EEC) and it causes major cash-flow difficulties for traders.

The Commission has decided to take Austria to the Court of Justice over a simplified tax scheme which it applies on passenger transport operators established in other Member States or certain third countries and which does not comply with the Sixth VAT Directive. The Commission is taking similar action against Finland because it has maintained the obligation, in certain circumstances, for foreign businesses engaging in economic activity in Finnish territory to designate a tax representative, despite the entry into force of Directive 2000/65/EC which was intended to eliminate such obligations.

Today the Council adopted a Commission proposal for a Regulation that will eliminate from 1st January 2005 all quantitative restrictions on the import of textile and clothing products from WTO countries. This Regulation implements one of the key commitments taken at the end of the last WTO Trade Round (”Uruguay Round”) in 1994.

The Council Regulation will abolish from 1 January 2005 all quotas on imports of textile and clothing products from WTO countries. It will also establish a transitional regime concerning the import in the first quarter of 2005 of products subject to the import quota regime in 2004.

The Regulation also sets up a statistical monitoring system for the imports to the EU of a number of textile and clothing products. This will give early intelligence on signs of serious market disruption and will allow the EU to follow closely the development of trade in the new environment.