EU takes France to court over different VAT rates for undertakers' services

The European Commission said it has decided to refer France to the Court of Justice, Europe's highest court, for applying different rates of VAT to operations performed by undertakers as part of the same service.

In France, the transportation of a body by vehicle is subject to a reduced rate of VAT, whereas the movement of a body by bearers and other operations generally provided by undertakers attract the normal rate.

The commission said: 'France is thereby applying an artificial distinction at variance with Community case law.'

The commission sent France a letter of reasoned opinion in July 2007. As it has not amended its legislation within the given time limit, the matter is now being referred to court.