UMTS Ruling Could Cost Germany Billions

Germany might have to reimburse telecommunications companies €7.2 billion ($8.7 billion) if the European Court rules in favor of six firms that lodged an appeal in Austria. The companies, which include Germany's T-Mobile, claimed that Austria must pay back the value added tax (VAT) it collected on high fees for UMTS mobile phone net licenses auctioned off for €832 million in 2000. Austrian judges Tuesday referred the case to the Luxemburg court. A decision, which is expected in two years, would have repercussions for all European governments. Austria might have to reimburse €140 million in VAT payments. The six companies say Austria failed calculate VAT into the bills it issued to them, which they claim violated an EU directive from the 1970s. Germany earned around €50 billion from its own auction of UMTS licenses and could be forced to reimburse around €7 billion in VAT.