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EU sues Britain over tax exemptions for some commodity markets

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EU sues Britain over tax exemptions for some commodity markets
FILE PHOTO: British and EU flags flutter outside the Houses of Parliament in London, Britain January 17, 2019. REUTERS/Clodagh Kilcoyne/File Photo   -   Copyright  CLODAGH KILCOYNE(Reuters)
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BRUSSELS (Reuters) – The European Commission said on Thursday it was suing Britain over tax exemptions it grants to some commodity markets, waivers that Brussels considers in breach of European Union rules.

Under EU rules, countries require EU authorisation not to charge sales tax on products and services. In 1977, Britain obtained a waiver to charge a zero rate Value Added Tax (VAT) on some commodity markets, but has since unlawfully extended its scope to other markets, the EU executive Commission said.

Last July, Brussels sent a warning letter to Britain over the case. On Thursday, it decided to step up the legal battle by referring Britain to the EU Court of Justice. The procedure could end up in fines for London if the court rules against the UK.

(Reporting by Francesco Guarascio; editing by Robin Emmott)

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