The organisation accused the commision of being unlawful “because it is an illegitimate, disproportionate and discriminatory interference with the right to free movement of services guaranteed by Article 56 TFEU, and is irrational”.
Although the case was eventually rejected, the GBGA did succeed in delaying the implementation of the new regulations for one month. The new Act was due to come into effect on October 1st but was put on hold until November 1st as a result of the GBGA’s appeal.
Despite the first challenge having been rejected, the GBGA has now filed a second lawsuit against the Commission and has taken a different approach to the case it outlined in the first challenge.
The GBGA in the first lawsuit said that the UK had no right to impose such a tax on offshore businesses in the European Union (EU), but will now instead focus on the Act breaching the EU’s law on free trade.
The lawsuit states that the new Point of Consumption Tax “breaches Article 56 of the Treaty on the Functioning of the European Union (TFEU), in that it amounts to a restriction on the free movement of services”.