CELEX: 62013CJ0254
Reference for a preliminary ruling
Charges having equivalent effect to customs duties
Internal taxes
Import levy on manure imported into the Flanders region
Articles 30 TFEU and 110 TFEU
Levy payable by the importer
Different levies on imported manure and manure produced within the Flanders region

This request for a preliminary ruling concerns the interpretation of Articles 30 TFEU and 110 TFEU.
The request has been made in proceedings between Orgacom BVBA (‘Orgacom’) and the Vlaamse Landmaatschappij (Flemish Land Company; ‘VLM’), an external agency of the Flemish Government responsible for the development and management of public spaces in the Flanders Region, concerning certain import levies claimed from Orgacom.
Legal context
Belgian legislation
The Decree of the Flanders Region of 23 January 1991 on protection of the environment against fertiliser pollution, as amended by the Decree of 28 March 2003 (‘the Fertiliser Decree’), applicable at the date of the material facts, made the producers, the importers, and the users of fertiliser in the Flanders Region subject to financial levies. It was repealed by the Decree of the Flanders Region of 22 December 2006 concerning the protection of waters against pollution caused by nitrates from agricultural sources.
Article 21(1) of that decree provided, with regard to the production of livestock manure in the Flanders Region:
‘There shall be a basic levy BH1 payable on the production of livestock manure to the Mestbank [an internal division of the VLM] by all producers in the undertaking whose production of livestock manure, MPp, has exceeded, during the preceding calendar year, 300 kg of phosphorous pentoxide. The amount of that basic levy BH1 is calculated on the basis of the following formula:
BH1 = (MPp x Xdmp) + (MPBn x Xdmn)
where:
—
MPp = the gross production of livestock manure, expressed in kg of P
O
;
—
MPBn = the gross production of livestock manure, expressed in kg of N;
—
Xdmp = the rate of taxation on the production of livestock manure in EUR/kg of P
O
;
—
Xdmn = the rate of taxation on the production of livestock manure in EUR/kg of N.
For the application of those provisions, the gross production of livestock manure MPBn, expressed in kg of N, means the product of the average livestock in the holding and/or farm during the preceding calendar year and the corresponding gross excretion quantities per animal, expressed in kg of N.
The average livestock for each of the species concerned is determined by dividing by 12 the sum of the monthly registered animal quotas. The gross excretion quantities per animal, expressed in kg of N, are set on a lump-sum or true basis, by application of the excretion record, such as referred to in Article 20a, in accordance with Article 5.
The abovementioned rates of taxation are determined as follows:
—
Xdmp = 0.0111 EUR/kg of P
O
;
—
Xdmn = 0.0111 EUR/kg of N.’
Article 21(5) of the Fertiliser Decree provided, with regard to the import into the Flanders Region of surplus livestock manure:
‘There shall be a basic levy, the full proceeds of which shall be allocated to the Mestbank, to be paid by every importer of surpluses of manure resulting from importation. The amount of that basic levy shall be set at EUR 2.4789 per ton of the surplus of manure resulting from importation brought into the Flanders Region in the preceding calendar year.’
Case-law of the Belgian Constitutional Court
The Constitutional Court held in paragraph B.6. of judgment No 123/2010 of 28 October 2010 (
Belgisch Staatsblad
of 23 December 2010, p. 81723), concerning the compatibility of Article 21(5) of the Fertiliser Decree with the principles of the Belgian economic and monetary union, that:
‘… it is sufficient to note that [the levy provided for in that article], which is connected with crossing the territorial limit set between the Regions in accordance with the Constitution, has an effect equal to that of a customs duty in that it affects fertiliser imported into the Flanders Region more heavily than fertiliser produced in that region’.
The dispute in the main proceedings and the questions referred for a preliminary ruling
Orgacom is an undertaking established in Belgium, in the Flanders Region, which specialises in the manufacture of organic fertilisers. As part of its activity, Orgacom imports manure from the Walloon Region and the Netherlands, which it processes into soil improvers and organic fertilisers, which are then exported to other Member States of the European Union.
On the basis of Article 21(5) of the Fertiliser Decree, Orgacom was subject to a levy of EUR 28 071.16 for the 2002 tax year (2001 production year) and to a levy of EUR 7 999.41 for the 2004 tax year (2003 production year).
By letters of 20 December 2005 and 18 August 2005, Orgacom brought claims before the VLM against the levy in respect of the 2002 tax year and the levy in respect of the 2004 tax year respectively. The VLM declared both claims unfounded by decisions adopted on 27 November 2006 and 11 August 2006 respectively.
Next, Orgacom brought an action against the decisions rejecting its claims before the Rechtbank van eerste aanleg te Brussel (Court of First Instance, Brussels), which was also dismissed as unfounded by a judgment of 17 October 2008.
Orgacom appealed against that judgment to the referring court. In support of its appeal, the appellant in the main proceedings argues that the levies imposed on it constitute charges having equivalent effect to customs duties, contrary to Article 30 TFEU or, at least, discriminatory internal taxes, prohibited under Article 110 TFEU.
In those circumstances, the Hof van beroep te Brussel (Court of Appeal, Brussels) decided to stay the proceedings and to refer the following questions to the Court for a preliminary ruling:
‘1.
Is the import levy described in Article 21(5) of the [Fertiliser Decree], which is imposed only on the importation from the other Member States of surpluses of manure derived both from livestock manure and from other manure, irrespective of whether these are further processed or marketed within the territory, and whereby the levy on those imported surpluses of manure is imposed on the importer, whereas in the case of surpluses of manure produced domestically the levy is imposed on the producer, to be regarded as a charge having equivalent effect to a customs duty on imports, within the terms of Article 30 TFEU, even though the Member State from which the surpluses of manure are exported itself provides for a reduction of the levy on the exportation of those surpluses of manure to other Member States?
2.
[If the answer to the first question is negative,] is that import levy to be regarded as constituting discriminatory taxation of the products of other Member States, within the terms of Article 110 TFEU, since livestock manure produced domestically is subject to a basic levy provided for by national legislation, the rate of which differs according to the production process, whereas in the case of imported surpluses of manure, irrespective of the production process (inter alia, the animal origin or the P
O
and N content), an import levy is imposed at a uniform rate which is higher than the lowest rate of the basic levy for livestock manure produced in the Flanders Region (EUR 0.00), even though the Member State from which the surpluses of manure are exported itself provides for a reduction of the levy on the exportation of those surpluses of manure to other Member States?’
Admissibility of the request for a preliminary ruling
The European Commission expresses doubts as to the admissibility of the request for a preliminary ruling, considering that the facts and legal background on the basis of which the complaints have been made have not been set out in sufficient detail by the referring court. In the view of the Commission, nor does that court clearly explain exactly why questions of interpretation of Articles 30 TFEU and 110 TFEU arise in the main proceedings.
In that regard it should be recalled that in proceedings under Article 267 TFEU, which are based on a clear separation of functions between the national courts and the Court of Justice, it is solely for the national court before which the dispute has been brought, and which must assume responsibility for the subsequent judicial decision, to determine, in the light of the particular circumstances of the case, both the need for a preliminary ruling in order to enable it to deliver judgment and the relevance of the questions which it submits to the Court. Consequently, where the questions referred concern the interpretation of EU law, the Court of Justice is, in principle, bound to give a ruling (judgment in
Donau Chemie and Others
, C‑536/11,
EU:C:2013:366
, paragraph 15).
The Court may refuse to rule on a question referred for a preliminary ruling from a national court only where it is quite obvious that the interpretation of EU law that is sought bears no relation to the actual facts of the main action or its purpose, where the problem is hypothetical, or where the Court does not have before it the factual or legal material necessary to give a useful answer to the questions submitted to it (judgment in
Donau Chemie and Others
,
EU:C:2013:366
, paragraph 16).
It must be noted that, in its request for a preliminary ruling, the referring court has set out sufficiently clearly, if succinctly, both the facts and the substance of the applicable national legislation and the relevance of the provisions of EU law of which it requests an interpretation for the resolution of the dispute. In particular, in that regard, in the event of an affirmative answer from the Court to the questions referred, the measures levying taxes at issue in the main proceedings must be annulled.
In the light of those factors, the request for a preliminary ruling must be regarded as admissible.
Consideration of the questions referred
By its questions, which it is appropriate to consider together, the referring court asks, in essence, whether Article 30 TFEU or Article 110 TFEU must be interpreted as precluding a levy, such as that provided for under Article 21(5) of the Fertiliser Decree which is applicable only to imports into the Flanders Region of surplus livestock manure and other fertilisers, which is levied on the importer whereas the tax on the surplus manure produced within the territory of the Flanders Region is levied on the producer and which is calculated at a uniform rate, per tonne and irrespective of the production process, while the basic levy, to which surplus livestock manure produced within the territory of the Flanders Region is subject, is calculated at a rate which varies according to the production process, the lowest rate being EUR 0 in the case of gross production of phosphorous pentoxide not exceeding 300 kilogrammes during the preceding calendar year.
In that context, that court also asks whether the fact that the Member State of origin of the imported products under consideration provides for a tax reduction on export to other Member States can affect the interpretation to be given to Articles 30 TFEU and 110 TFEU.
It must first be borne in mind that FEU Treaty provisions relating to charges having equivalent effect and those relating to discriminatory internal taxation cannot be applied together, so that under the system of the Treaty the same measure cannot belong to both categories at the same time (judgment in
Stadtgemeinde Frohnleiten and Gemeindebetriebe Frohnleiten
, C‑221/06,
EU:C:2007:657
, paragraph 26).
It is therefore appropriate to examine, firstly, whether the levy provided for in Article 21(5) of the Fertiliser Decree can be classified as a charge having equivalent effect to customs duties on importation within the meaning of Article 30 TFEU. If that is not the case, it will be necessary to ascertain, secondly, whether that charge constitutes discriminatory internal taxation prohibited by Article 110 EC.
With regard to the classification of the contested levy as a charge having equivalent effect to a customs duty, as the Court has held on a number of occasions, the justification for the prohibition of customs duties and any charges having an equivalent effect lies in the fact that any pecuniary charge, however small, imposed on goods by reason of the fact that they cross a frontier, constitutes an obstacle to the movement of goods which is aggravated by the resulting administrative formalities (judgment in
Commission
v
Germany
, C‑389/00,
EU:C:2003:111
, paragraph 22).
In that regard, it is settled case-law that any pecuniary charge, however small and whatever its designation and mode of application, which is imposed unilaterally on goods by reason of the fact that they cross a frontier, and which is not a customs duty in the strict sense, constitutes a charge having equivalent effect within the meaning of Articles 28 TFEU and 30 TFEU (see, to that effect, judgment in
Stadtgemeinde Frohnleiten and Gemeindebetriebe Frohnleiten
,
EU:C:2007:657
, paragraph 27).
Furthermore, it is settled case-law that a charge imposed when goods cross a territorial boundary within a Member State constitutes a charge having effect equivalent to a customs duty (see judgment in
Carbonati Apuani
, C‑72/03,
EU:C:2004:506
, paragraph 25 and the case-law cited).
In the main proceedings, it is apparent from the information before the Court that the levy in question affects the importers of surplus livestock manure on import. Moreover, the amount of the levy is ‘set at EUR 2.478 per tonne of the surplus of manure resulting from importation brought into the Flanders Region in the preceding calendar year’. Consequently, it must be held that the levy provided for in Article 21(5) of the Fertiliser Decree affects fertilisers which are not of Flemish origin due to their import into the Flanders Region, such that the disputed levy is charged on those fertilisers as a result of their having crossed the border of that region, that border crossing being the trigger for the levy in question.
In those circumstances, it must therefore be held that the levy provided for in Article 21(5) of the Fertiliser Decree constitutes a charge having equivalent effect to a customs duty, prohibited by Article 30 TFEU.
The classification of the levy provided for by that provision of the Fertiliser Decree as a charge having equivalent effect to a customs duty cannot be called into question by the argument advanced by the Kingdom of Belgium that that levy, because there is a similar levy imposed on fertilisers produced in the Flanders Region, forms an integral part of a general system of internal taxation applied systematically, in accordance with the same criteria, to national products and imported and exported products and should, in consequence, be assessed in the light of Article 110 TFEU.
In that regard, it must be noted, firstly, that the essential feature of a charge having equivalent effect to a customs duty which distinguishes it from an internal tax is that the former is borne solely by a product which crosses a frontier, as such, whilst the latter is borne by imported, exported and domestic products (see, to that effect, judgment in
Michaïlidis
, C‑441/98 and C‑442/98,
EU:C:2000:479
, paragraph 22).
Secondly, it must be borne in mind that, in order to relate to a general system of internal taxation, the tax charge in question must impose the same duty on both domestic products and identical exported products at the same marketing stage and the chargeable event triggering the duty must also be identical in the case of both products (see, to that effect, judgment in
Michaïlidis
,
EU:C:2000:479
, paragraph 23).
With regard to the main proceedings, it must first be noted that, as has been pointed out in paragraph 25 of the present judgment, the levy provided for in Article 21(5) of the Fertiliser Decree affects products, as such, which cross the border of the Flanders Region.
Next, it is not in dispute that that levy is imposed on the importers, whereas the similar charge provided for in Article 21(1) of that decree is imposed on the producers. The two levies are therefore not charged at the same marketing stages.
Finally, the two levies are calculated using different methods, which is likely, as the Belgian Constitutional Court noted in its judgment No 123/2010 of 28 October 2010, and at least in the cases where the amount of the levy on production amounts to EUR 0, to lead to more severe taxation of the imported product than of that produced in the Flanders Region.
In consequence, the argument advanced by the Kingdom of Belgium cannot be accepted.
Furthermore, the referring court asks, in essence, whether, in the event that the Member State of origin of the fertiliser applies a tax reduction where the fertiliser is exported to other Member States, a levy such as the import levy at issue in the main proceedings could avoid classification as a charge having equivalent effect to a customs duty, as the VLM argues, because of the need to control the stocks of manure in Flanders and to protect domestic production against external measures that distort competition and impose an additional environmental burden on Flanders.
In that regard, the Court has held before that customs duties and charges having equivalent effect thereto are prohibited regardless of the purpose for which they were introduced and the destination of the revenue from them (see, to that effect, judgments in
Brachfeld and Chougol Diamond
, 2/69 and 3/69,
EU:C:1969:30
, paragraph 19, and
Carbonati Apuani
,
EU:C:2004:506
, paragraph 31).
Furthermore, it must be noted that Article 21(5) of the Fertiliser Decree imposes a levy which affects, without distinction, all imported manure, without its application being restricted to cases where the Member State of origin provides for a tax reduction on export of that product, as is the situation, in the present case, of the Kingdom of the Netherlands.
It follows from all the foregoing considerations that the answer to the questions referred is that Article 30 TFEU must be interpreted as precluding a levy, such as that provided for under Article 21(5) of the Fertiliser Decree which is applicable only to imports into the Flanders Region of surplus livestock manure and other fertilisers, which is levied on the importer whereas the tax on the surplus manure produced within the territory of the Flanders Region is levied on the producer and is calculated differently from the tax on imports. In that regard, it is immaterial that the Member State from which the surplus manure is imported into the Flanders Region provides for a tax reduction in the case of export of that surplus to other Member States.
Costs
Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.

On those grounds, the Court (Seventh Chamber) hereby rules:

Article 30 TFEU precludes a levy, such as that provided for under Article 21(5) of the Decree of the Flanders Region of 23 January 1991 on protection of the environment against fertiliser pollution, as amended by the Decree of 28 March 2003, which is applicable only to imports into the Flanders Region of surplus livestock manure and other fertilisers, which is levied on the importer whereas the tax on the surplus manure produced within the territory of the Flanders Region is levied on the producer and is calculated differently from the tax on imports. In that regard, it is immaterial that the Member State from which the surplus manure is imported into the Flanders Region provides for a tax reduction in the case of export of that surplus to other Member States.

[Signatures]
(
*1
)	Language of the case: Dutch.