Apr 30

CJEU expected to deliver judgment in Case T-747/17, UPF v Commission (State aid –  Tax exemption in favour of French ports)

Pleas in law and main arguments

In support of the action against decision C(2017) 5176 final of the European Commission of 27 July 2017 on aid scheme SA.38398 (2016/C, ex 2015/E) implemented by France (‘the contested decision’), the applicant relies on five pleas in law.

1. First plea in law, alleging that the Commission erred in law by classifying the tax measure in its entirety as State aid, disregarding the criterion relating to the economic nature of the activity of the French ports. In that regard, the applicant considers that, by finding that the tax exemption in favour of French ports constitutes a State aid within the meaning of Article 107(1) of the TFEU, without specifying that the classification of aid is limited to the economic activities only of the ports, the Commission, in principle, vitiated its decision by an error of law.

2. Second plea in law, alleging that the Commission erred in law in relation to the assessment of the economic nature of the activities carried out by the French ports. The applicant claims that the Commission also erred in law in its analysis of the economic nature of the activities carried out by the French ports, in two respects:

(a)   In the first place, in that it totally failed to address in the contested decision some of the activities carried out by the French ports;

(b)   in the second place, in that, with regard to several other activities of the French ports, it merely reiterated the general principles derived from the case-law of the ECJ concerning public financing of port infrastructures without reaching a conclusion as to whether or not they are economic in nature although that is, it is claimed, the criterion for applying the State aid rules.

3. Third plea in law, alleging an error of law and inadequate reasoning as regards the conditions relating to the distortion of competition and the effect on trade between Member States, insofar as the Commission was wrong to consider that the tax exemption was liable to give rise to distortions of competition and to have an effect on trade between the Member States, as regards French ports in general and, more specifically, island ports and overseas ports. According to the applicant, the contested decision is vitiated by inadequate reasoning in so far as the Commission assumed, without substantiating its position, that those conditions were satisfied in the present case.

4. Fourth plea in law, alleging an error of law in the conduct of the existing aid review procedure and infringement of Article 108(1) and (2) TFEU, combined with the principle of proportionality, in so far as, first, by requiring that the French authorities provide evidence of the compatibility with the internal market of the exemption from corporation tax in favour of the French ports, the Commission reversed the burden of proof and acted as if it had received an application for approval of a new aid scheme. Secondly, by requiring the French authorities to simply abolish the exemption scheme without demonstrating that no modification to that measure could make it compatible with the EU rules on State aid, the Commission infringed Article 108(1) and (2) TFEU, Article 2 of Regulation No 2015/1589 and the principle of proportionality.

5. Fifth plea in law, alleging breach of the principle of sound administration in that the fact that the Commission requires the abolition of the exemption scheme while leaving in place port aid schemes in other Member States does not ensure a level playing field between the various European ports but, on the contrary, leads to further distortions of competition, in direct breach of the role conferred on the Commission as guarantor of the proper functioning of the internal market. The Commission therefore infringed the principle of impartiality which is the necessary corollary of the principle of good administration.

May 1

The Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI) to enter into force with respect to Ireland and Monaco.

May 2

CJEU expected to deliver judgment in Case C‑598/17, A-Fonds (State aid –  Existing aid and new aid – Refund of dividend tax)

Questions referred for a preliminary ruling:

(1)   Is the extension of the scope of an existing system of aid as a result of a taxable person successfully invoking the right to the free movement of capital as laid down in Article 56 of the EC Treaty (now Article 63 TFEU) to be regarded as a new system of aid resulting from an alteration to existing aid?

(2)   If so, does the task to be performed by the national court under Article 108(3) TFEU preclude the taxable person from being granted a tax advantage which that taxable person claims under Article 56 of the EC Treaty (now Article 63 TFEU), or should a proposed judicial decision to grant that advantage be notified to the Commission, or should the national court take any other action or implement any other measure, in view of the supervisory task assigned to it under Article 108(3) TFEU?

The opinion in this case as delivered on December 19, 2018 by Advocate General Saugmandsgaard Øe can be found here

May 2

Opinion of the Advocate General expected to be delivered in Case C‑692/17, Paulo Nascimento Consulting (VAT – Article 135(1)(b) of Council Directive 2006/112/EC – Exemptions for other activities)

Questions referred for a preliminary ruling:

For the purposes of application of the exemption provided for in Article 135(1)(b) of the VAT Directive, do the terms ‘granting’, ‘negotiation’ and ‘management of credit’ encompass the assignment for consideration to a third party of the positon held by a taxable person liable for VAT in enforcement proceedings for recovery of a debt, recognised by a judgment and resulting from the breach of a property agency agreement, plus VAT at the rate in force on the date of payment and the default interest already accrued or which may accrue until full payment?

May 2

Opinion of the Advocate General expected to be delivered in Case C‑42/18, Cardpoint (VAT – Article 13.B(d)(3)  of the Sixth Council Directive 77/388/EEC – Exemptions within the territory of the country)

Questions referred for a preliminary ruling:

Is technical and administrative assistance provided by a supplier of services to a bank operating a cash point (ATM) for cash withdrawals from the bank exempt from tax under Article 13.B(d)(3) of Directive 77/388/EEC in the case where technical and administrative assistance of the same nature provided by a supplier of services for payments by card in connection with the sale of cinema tickets is, in accordance with the judgment of the Court of Justice of the European Union of 26 May 2016, Bookit, C-607/14, (EU:C:2016:355), not exempt from tax under that provision?

May 2

CJEU expected to deliver judgment in Case C‑265/18, Jarmuškienė (VAT –  Interpretation of articles 282 to 292 of Council Directive 2006/112/EC – An excess of the annual turnover limit)

Questions referred for a preliminary ruling:

Must Articles 282 to 292 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax be interpreted as meaning that in circumstances, such as those in the present case, where two goods are supplied by means of the same transaction but the annual turnover limit (the volume of activity) laid down in Article 287 of Directive 2006/112/EC (and in the corresponding provision of national legislation) is exceeded only on account of the supply of one of those goods, the taxable person (the supplier) is obliged, inter alia, to calculate and pay value added tax (1) on the entire value of the transaction (on the value of the supply of both goods) or (2) only on the part of the transaction whereby the aforesaid limit (volume of activity) is exceeded (on the value of the supply of one of the goods)?

May 2

CJEU expected to deliver judgment in Case C‑225/18, Grupa Lotos (VAT –  Article 168 of Council Directive 2006/112/EC)

Questions referred for a preliminary ruling:

Are Article 168 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax and the principles of neutrality and proportionality contrary to a provision such as that in Article 88(1)(4) of the Law of 11 March 2004 on tax on goods and services (Dz. U. 2011, No 177, item 1054, as amended; currently Dz. U. of 2017, item 1221, as amended), under which a reduction or refund of input VAT does not apply to acquisitions by a taxable person of overnight accommodation and catering services, with the exception of the purchase of ready meals prepared for passengers by taxable persons providing passenger transport services, even where these provisions were introduced into the law on the basis of Article 17(6) of the Sixth Council Directive of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes — Common system of value added tax: uniform basis of assessment?

May 2

CJEU expected to deliver judgment in Case C‑133/18, Sea Chefs Cruise Services (VAT –  Interpretation of article 20(2) of Council Directive 2008/9/EC of 12 February 2008)

Questions referred for a preliminary ruling:

Must Article 20(2) of Council Directive 2008/9/EC of 12 February 2008 be interpreted as meaning that it creates a limitation rule which has the effect that a taxable person of a Member State which applies for a refund of value added tax from a Member State in which it is not established is not able to regularise its refund application before a tax court if it has not complied with the time limit for replying to a request for information made by the administration in accordance with the provisions of the first paragraph of that article, or, on the contrary, as meaning that that taxable person may, in the context of the right of appeal laid down in Article 23 of the directive, and having regard to the principles of neutrality and proportionality of VAT, regularise its application before the tax court?

More information on the opinion in this case as delivered on January 17, 2019 by Advocate General Hogan can be found here

May 2

CJEU expected to deliver judgment in Case C‑133/18, Budimex (VAT –  Article 63 of Council Directive 2006/112/EC – Time of occurrence of a transaction)

Questions referred for a preliminary ruling:

In a situation where the parties to a transaction have agreed that payment for construction works or construction/installation works requires express acceptance by the client of their performance in the formal record of acceptance for the works, does the performance of services, for the purposes of Article 63 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, in respect of such a transaction occur at the time of actual performance of the construction or construction/installation works, or at the time of acceptance of the performance of the works by the client, expressed in the formal record of acceptance?