EU takes Britain to court over 'impossible' tax refunds

(BRUSSELS) - The European Commission said Thursday it is taking Britain to court over changes to rules governing the return of overpaid taxes.

The EU executive said it had referred the United Kingdom to the European Court of Justice in Luxembourg for abolishing a "'remedy for repayment of taxes paid in mistake of law' without proper transitional rules."

According to Brussels taxation officials, it is "practically impossible in certain cases to exercise the rights conferred by EU law" to be refunded following a change in Britain that "exceeded the limits of national procedural autonomy."

Britain was asked by Brussels to row back on its law in September 2010.

The Commission said that "reimbursement should not be made impossible or excessively difficult," and that "a retroactive limitation of the rights of taxpayers without proper transitional rules goes against this principle."

London is frequently at loggerheads with European Union partners over taxation issues, which it jealously guards as sovereign.