Austrian mobile lawsuit referred to European Court of Justice

3 Aug 2004

A lawsuit brought by Austria’s leading mobile phone operators against the Austrian government concerning tax rebates on 3G licences has been passed to the European Court of Justice, in what could prove a landmark case, paving the way for similar petitions from other wireless operators across Europe. Mobile operators spent over EUR100 billion in acquiring 3G licences in Europe at the height of the telecoms boom, but now argue that the cost of the concessions included value added tax (VAT), which they want to offset against future VAT bills. The UK’s UMTS licensees could seek a rebate of up to EUR6 billion, while their German counterparts could sue for as much as EUR7.2 billion. The Austrian case hinges on the sixth European VAT directive which instructs governments to charge a sales tax for any commercial services provided in telecoms. The country’s 3G licence holders claim the state should have issued invoices for the concessions and are now looking for a tax refund of EUR140 million.