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European Court of Justice: Tallinn's sales tax was illegal

BC, Tallinn, 06.03.2015.Print version
On March 5th 2015, the European Court of Justice made a decision that the sales tax that the city of Tallinn imposed in 2010-2011 contradicted the EU law and excise tax directive, LETA/delfi.ee reports.

The European Court's decision means that the illegally collected tax together with interests has to be returned to businesses.

 

The parties to this dispute were petrol stations chain Statoil Fuel & Retail Eesti AS and the Tallinn City Enterprise Board.

 

"The European Court of Justice decision is very important. This is not a memo or a reflection but a mandatory instruction for Estonian courts," said Statoil's legal representative in the case, Sorainen law office partner and Tartu University EU law Associate Professor Carri Ginter. "This decision will affect the future court practice and legislation of all 28 EU Member States," stressed Ginter.

 

Ginter said that as far as he knows, several other businesses have submitted financial claims against the city of Tallinn to return the tax.

 

The EU excise duty directive prohibits the imposition of additional taxes on excise tax goods, except when the tax has a specific objective. While the city of Tallinn claimed that the sales tax was collected for a specific purpose, namely the promotion of public transport and, therefore, reducing the traffic load, the European Court of Justice agreed with the company that the tax was just a normal budgetary obligation.

 

Sales tax as a local tax was applied in Tallinn from 1 June 2010 to 31 December 2011. The sales tax was abolished with a law approved by the Riigikogu.






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