No VAT refunds for 3G licences

Rating: get over it, move on

By Annie Turner
Some European operators have lost the latest round of their battle to get a refund on the 3G licence fees they paid too much for.

Court cases brought by Hutchison 3G in the UK and T-Mobile in Austria against local authorities had claimed that the licence fees paid included VAT.

Neither government was prepared to let the companies reclaim part of the licence fee as VAT, so the operators took the cases to the European Court of Justice. The EU court decided that the issuing of spectrum licences does not constitute an economic activity and, as such, is not subject to VAT under EU law.

I am somewhat puzzled by the legal reasoning, but think the result was fair. At the time of the 3G licence auctions, many of us commented on the collective madness that seemed to have seized the operators (one pundit commented she wouldn’t let them go to the sweet shop on their own). But like the gambler who loses him house in a moment of madness or those of us who spent years with negative equity in our homes when the housing market collapsed 15 years ago, operators just have to live with consequences of their actions

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