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EU warns Italy, Isle of Man over yachts, private jets tax breaks

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(Reuters) - and the found themselves in the European Commission's crosshairs on Thursday as the EU took steps to force them to scrap illegal tax breaks for yachts and private jets or face court action.

The EU said incorrect value added taxes levied by and the breached common tax rules and distorted competition.

The Commission said it had sent a letter of formal notice, the first step in its infringement proceedings, to for not levying the correct amount of VAT on the leasing of yachts.

It also warned Italy about its system of exemptions for fuel used to power charted yachts in EU waters, in a notice called a reasoned opinion. This second step is typically followed by court action if countries fail to allay the Commission's concerns.

Britain also received a letter of formal notice over the Isle of Man's VAT practices related to supplies and leasing of aircraft. The island, located between Great Britain and Ireland, is a self-governing territory that is under British sovereignty although not part of the

"It's simply not fair that some individuals and companies can get away with not paying the correct amount of VAT on products like yachts and aircraft," said in a statement.

Italy and the UK have two months to respond to the letters of notice before they get a warning. In the excise duty case, Italy will have two months to convince the Commission or be taken to court.

Cyprus, and were targeted by the Commission for similar yacht VAT breaches in March and have subsequently said they would revise their legislation.

(Reporting by Foo Yun Chee; Editing by Peter Graff)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, November 08 2018. 21:08 IST