The European Commission is taking Italy to Europe's highest court, alleging that the country did not implement consistently a value-added tax exemption in the shipping industry, Reuters reports.Existing EU legislation allows governments to provide a VAT exemption for the fuelling and provisioning of ships at sea, as well as for supply, repair, chartering and hiring.
However, governments can only do this under certain conditions.
The Commission said in a statement that, on the one hand, Italy's subsidies go further than allowed under EU law, because the country grants a VAT exemption "to commercial vessels not sailing on the high seas and vessels intended for public bodies," referring to state-owned ships.
"On the other hand, it excludes some services that should be covered by the exemption such as for example the loading and unloading of vessels sailing on the high seas," the Commission said.
The Commission said it would file a lawsuit against Italy at the Luxembourg-based EU Court of Justice. Cases at the court typically take about two years.
The Commission had warned Italy about the issue in May.
However, governments can only do this under certain conditions.
The Commission said in a statement that, on the one hand, Italy's subsidies go further than allowed under EU law, because the country grants a VAT exemption "to commercial vessels not sailing on the high seas and vessels intended for public bodies," referring to state-owned ships.
"On the other hand, it excludes some services that should be covered by the exemption such as for example the loading and unloading of vessels sailing on the high seas," the Commission said.
The Commission said it would file a lawsuit against Italy at the Luxembourg-based EU Court of Justice. Cases at the court typically take about two years.
The Commission had warned Italy about the issue in May.