Legal actions on tax free sales after 30 June 1999

Legal actions on tax free sales after 30 June 1999 Stena Line asks for interpretation by the European Court of Justice of the EC- provisions being the legal base for the Swedish Act on Value Added Tax. In March 1998 Stena Line applied for a ruling from the Swedish Board on Taxation Law. Stena Line wants to obtain clarity how VAT shall be levied after 30 June 1999. The position of Stena Line is that Swedish VAT cannot be charged when goods are sold outside the EU-territory including international waters. The reason for this position is, among others, the fact that the relevant EC- provisions only stipulate what happens within the EU. The base for the EC-provisions are, among others, international law and international agreements on the principle of free high seas. Article 89 of the Convention on the Law of the Sea says "No State may validly purport to subject any part of the high seas to its sovereignty ". The Board on Taxation Law decided in October 1998 that on the voyage from Sweden Swedish VAT shall be levied on all goods sold on board, even if the purchase takes place when crossing international waters. Stena Line has appealed against the decision of the Board on Taxation Law to the Supreme Administrative Court and asks for interpretation of the VAT- provisions by the European Court of Justice. Stena Line considers that the interpretation made by the Board on Taxation Law is evidently erroneous and that the provisions are unclear. The only possibility to clarify the European jurisprudence concerning sales outside the EU, is to let the European Court of Justice to decide upon the matter. The National Swedish Tax Board has asked the Supreme Administrative Court to stay the proceedings on the ground of ongoing political discussions. Considering the positive approach to the extension of tax free sales expressed during the Council meeting in Vienna in December 1998, Stena Line has assented to the staying of the proceedings. If the extension is not granted, Stena Line has at the same time claimed that the Supreme Administrative Court takes account of the unclear legal situation and asks for interpretation from the European Court of Justice as soon as possible. Göteborg, 23 February 1999 Stena Line AB For further information, please contact Bo Lerenius, Vice Chairman, Stena Line, phone +46 (0)705-46 12 11 or Lave Beck-Friis, Legal Advisor, Wistrand Advokatbyrå, phone +46 (0)31- 771 21 00. ------------------------------------------------------------ Please visit http://www.bit.se for further information The following files are available for download: http://www.bit.se/bitonline/1999/02/23/19990302BIT00410/bit0001.doc