Dear Colleagues,

While some of us were debating restitutionary issues at the Obligations Conference last week, the ECJ handed down its judgment in the Littlewoods v HMRC case. The Court reiterates the "in principle" requirement that charges levied in breach of EU law must be repaid, and that this requirement extends to the loss constituted by the availability of money paid prematurely. But the Court points out that the principle of equivalence does not require a Member State "to extend its most favourable rules to all actions brought in a certain area of law" ([31]).

In answer to the questions referred, the Court concludes (at [34]) that

EU law must be interpreted as requiring that a taxable person who has overpaid VAT which was collected by the Member State contrary to the requirements of EU VAT legislation has a right to reimbursement of the tax collected in breach of EU law and to the payment of interest on the amount of the latter. It is for national law to determine, in compliance with the principles of effectiveness and equivalence, whether the principal sum must bear ‘simple interest’, ‘compound interest’ or another type of interest.

So, essentially, the Court is leaving it up to the national court to determine the issues as a matter of principle. The judgment is not yet reported but is available here: http://curia.europa.eu/juris/document/document.jsf?text=&docid=125224&pageIndex=0&doclang=EN&mode=lst&dir=&occ=first&part=1&cid=242814

The remaining, important questions in that case, relating to change of position and the "exhaustion of benefits" argument, were not referred to the ECJ at this stage in the proceedings.

Best wishes,

James

--
James Lee
Lecturer and Director of Careers
Academic Fellow of the Inner Temple
Birmingham Law School
University of Birmingham
Edgbaston
Birmingham
B15 2TT, United Kingdom

Tel: +44 (0)121 414 3629
E-mail: j.s.f.lee@bham.ac.uk<mailto:j.s.f.lee@bham.ac.uk>



Web: http://www.birmingham.ac.uk/staff/profiles/law/lee-james.aspx

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