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Brussels, 9 January 2007

Direct taxation: Commission closes two infringement proceedings against Spain and Italy

The European Commission has closed the case against Spain over its tax rules relating to pension contributions paid to non-Spanish funds. It considers that the changes introduced in the Spanish legislation allowing for the deduction of contributions paid to pension funds established in other Member States are in line with the changes requested in the Commission's reasoned opinion. The Commission has also closed a case against Italy that was opened with regard to its way of notifying fiscal acts to non-resident persons. The Commission welcomes these changes.


The Spanish regime was amended by Law 22/2005 of 18 November 2005. According to the new regime, pension contributions paid by an employer for its employees and employee's own contributions paid to pension funds governed by the Pension Funds Directive (Directive 2003/41/EC) and established in Sweden or in the other Member States will enjoy the same tax benefits. Contributions to pension funds from EEA/EFTA Members (Norway, Iceland and Liechtenstein) will also enjoy this treatment following the inclusion of the Pension Fund Directive in Annex 9 of the EEA Agreement.

Under the old Spanish legislation, pension contributions paid by the employer were exempt from income tax in the hands of the employee and the employee was able to deduct from income tax the contributions he paid himself only if the contributions were paid to pension institutions established in Spain.

The Commission considered that this Spanish legislation discouraged foreign pension providers from offering their services on the Spanish market and discouraged individuals from taking out voluntary pension insurance with foreign institutions.


By the most recent amendments to article 60.1 of the Decree 600/73, in force since August 2006, Italy has modified the procedure applied for notifying fiscal acts to non-resident persons. According to the new provisions, local tax authorities will notify fiscal acts to non-resident persons at their registered address abroad.

Under the previous regime, notifications to non resident persons were carried out by displaying a notice on the Commune's notice board (where the notification has to be carried out) and the appeal period started to run 8 days after this formality, while resident persons received notification of fiscal acts at their home address.

The Commission had sent a letter of formal notice to Italy because it considered that the old rules infringed the principle of non discrimination based on nationality (Article 12 EC) and the freedom of movement and establishment (Articles 18 and 43EC).

The Commission's case reference numbers are 2002/2293 (Spain) and 2005/5115 (Italy).

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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