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Brussels, 23 March 2007

VAT: infringement procedures against Italy and Sweden

The Commission has decided to bring Italy before the Court of Justice for extending tax amnesty on VAT to year 2002 ("condono"). The Commission has also sent Sweden a formal request to amend its rules concerning the reduced rate of VAT applied by Sweden to supplies, importations and intra-Community supplies of audio books. Currently Sweden applies a rate of 6 % instead of the normal rate of 25 % to supplies of audio books. According to the Commission there is however no legal base for applying such a reduced rate. This request takes the form of a "reasoned opinion", the second stage of the infringement procedure laid down in Article 226 of the EC Treaty.

Italy (see IP/06/1878)

By Finance Act 2004 the Italian Government extended to year 2002 the tax amnesty (the “condono”) adopted under Finance Act 2003.

The Finance Act 2003 allows taxpayers to regularise different unpaid taxes, including VAT. According to these fiscal arrangements the Italian administration waives its right to control in the future VAT which was not paid for that period. The taxpayers may “wipe the slate clean” by simply paying to the State a fixed sum, if no return was filed, or a percentage (2%) of the VAT that would have been payable in respect of the goods and services supplied in each taxable year. The waiver of further controls on unpaid VAT applies even if it is proven that irregularities were committed.

The Commission already considered that the tax amnesty adopted under Finance Act 2003 is in breach of the 6th VAT Directive (see IP/04/1243) and brought an action against the Republic of Italy before the European Court of Justice (see Case C-132/06). The Commission claims that the Directive requires taxing all goods and services supplied within the country and it obliges Member States to ensure that taxable persons fulfil their obligation to declare and pay VAT.

In the Commission’s view, the measures adopted by Italy go beyond the margin of discretion that Member States enjoy for adjusting their controls on the basis of human and technical resources available to them. Italy’s action appears to be an overt renunciation of controls for the collection of VAT thus being in breach of the obligations it has assumed with regard to the application of Community law.

Consequently, it is only natural that the Commission equally opposes Italy's decision to extend the application of the above-mentioned fiscal arrangements to the year 2002.


Sweden considers that audio books are covered by the exemptions in Annex III to the VAT Directive 2006/112/EC since they could be regarded as an aid which alleviates disability or at least should not be treated differently than books in paper form. Therefore, it applies a reduced rate of VAT of 6 % to supplies, intra-Community supplies and imports of such products.

Under the VAT Directive, a reduced rate can be applied to:

  • medical equipment intended to alleviate or treat disability, for the exclusive personal use of the disabled;
  • supply of printed books.

Audio books are not explicitly mentioned among the exemptions in Annex III to the directive and according to the settled case law of the Court of Justice these exemptions must be interpreted in a strict manner. Therefore, any attempt to construe the exemptions in a broad manner, as including not only the goods specifically referred to but also similar ones, must be dismissed.

The Commission sent a formal letter of notice to Sweden in April 2006 and received an unsatisfactory reply in June 2006.

The Commission's reference numbers are 2006/2227 (Italy) and 2005/2197 (Sweden).

New: For the press releases issued on infringement procedures in the taxation or customs area see:

For the latest general information on infringement measures against Member States see:

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