Cellcos argue their VAT rebate case

8 Feb 2006

Judges at the European Court of Justice have begun to hear arguments by some of Europe’s largest wireless operators that governments have been profiteering from the sale of EUR109 billion worth of 3G licences. The mobile operators claim that they are owed billions in value added tax (VAT) rebates. A final ruling on the case, which is likely to have precendent-setting importance for operators across Europe, will come at the end of the year. Lawyers representing the governments have maintained that granting telecoms licences is no different from granting drivers licences, claiming they receive fees and not a ‘price’ in return.

The case began when the UK and Austrian governments rejected requests by a number of licensees for VAT refunds. The five UK operators were demanding a GBP3.3 billion tax rebate, while the Austrian companies were asking for EUR140 million.