The provisions of Article 21 of Law No 4321/2015 amend the provisions of the Income Tax Code on non-deductible corporate spending which were in any case problematic for enterprises. More specifically, paragraph XIII of Article 23 of the Income Tax Code provides that imported goods and the provision of services from countries with which there is no cooperation in the field of taxation or with a preferential tax regime are subject to a withholding tax corresponding to the rate of income tax on legal persons in respect of the entire sum involved (currently 26%). Taxpayers importing such goods and services will have three months after a transaction is concluded to prove that the transaction in question is a normal transaction at current prices. Otherwise, the cost of the purchase of goods will not be regarded as expenditure deductible from income tax.
The Hellenic Parliament’s Scientific Service has raised objections to this measure on the grounds that it violates the principle of tax equity, reverses the burden of proof of an infringement, leads directly to the distortion of competition and violates the EC Treaty by imposing duties or equivalent tax charges. In fact, the Bulgarian Prime Minister has already warned the government that countermeasures will be taken.
In view of the above, will the Commission say:
1. Are the provisions of Article 21 of Law No 4321/2015 compatible with Community law?
2. What steps will it take to protect the Community acquis in tax policy?
Answer given by Mr Moscovici on behalf of the Commission
As to the first question, the Commission would like to refer the Honourable Member to its joint response to questions E-004775/2015, P-005524/2015, P-005559/2015, E-005771/2015 and P-005814/2015. Furthermore, the Commission received in May 2015 a complaint lodged under Article 259 of the Treaty on the Functioning of the European Union from the Bulgarian authorities.
As regards the Commission's duty to ensure that EC law is respected by the Member States, it must be noted that in cases of infringements of EC law in the field of direct taxation, the Commission may use the procedure provided in Article 258 TFEU.