Opinion of the Advocate General — ECLI:EU:C:2015:606
Date: 2015-09-16
Language of the case: Hungarian
Subject matter: Right of establishment;Taxation;Freedom to provide services;Value added tax;Fundamental rights;European Convention on Human Rights;Charter of Fundamental Rights
Procedure: Reference for a preliminary ruling;Reference for a preliminary ruling - decision unnecessary
Origin: Hungary

Summary — Judgment of the Court (Third Chamber), 17 December 2015 1. Harmonisation of fiscal legislation — Common system of value added tax — Transactions constituting an abusive practice — Concept — Licensing agreement concerning the making available of know-how enabling operation of a website — Agreement concluded with a company established in a Member State other than that of the company granting the licence — Factors to be taken into consideration — Agreement constituting a wholly artificial arrangement — Verification a matter for the national court (Council Directive 2006/112) 2. Harmonisation of fiscal legislation — Common system of value added tax — Supplies of services — Determination of the place of supply for tax purposes — Artificial fixing of that place by means of an arrangement not reflecting economic reality — Tax paid in the Member State of artificial supply — Consequences — Adjustment of tax in the Member State of actual supply — Permissibility (Council Directive 2006/112) 3. Harmonisation of fiscal legislation — Common system of value added tax — Administrative cooperation and combating fraud — Member State examining whether value added tax is chargeable in respect of supplies of services that have already been subject to that tax in other Member States — Obligation to request information from the tax authorities of those other Member States — Conditions (Council Regulation No 904/2010) 4. EU law — Principles — Rights of the defence — Observance thereof in the context of administrative procedures — Scope 5. Harmonisation of fiscal legislation — Common system of value added tax — Transactions constituting an abusive practice — Procedure for the adjustment of tax — Use of evidence obtained without the taxable person’s knowledge in the context of a parallel criminal procedure that has not been concluded — Lawfulness — Condition — Observance of the rights guaranteed by EU law, in particular fundamental rights — Right to respect for family life — Right to be heard — Right to an effective judicial remedy (Art. 4(3) TEU; Art. 325 TFEU; Charter of Fundamental Rights of the European Union, Arts 7, 47 and 52(1); Council Directive 2006/112, Arts 2, 250(1) and 273) 1. EU law must be interpreted as meaning that, in order to determine whether a licensing agreement concerning the making available of know-how enabling operation of a website by which interactive audiovisual services have been supplied, concluded with a company established in a Member State other than that in which the company granting the licence is established, arises from an abuse of rights designed to benefit from the fact that the rate of value added tax applicable to those services is lower in that other Member State, the fact that the manager and sole shareholder of the latter company is the creator of that know-how, that that same person exercises influence or control over the development and exploitation of that know-how and over the supply of the services which are based on it and that management of the financial transactions, staff and technical instruments necessary for the supply of those services is carried out by subcontractors, and the reasons which may have led the company granting the licence to make the know-how at issue available to a company established in that other Member State instead of exploiting it itself, do not appear decisive in themselves. It is incumbent upon the referring court to analyse all the circumstances of the main proceedings in order to determine whether that agreement constitutes a wholly artificial arrangement concealing the fact that the services at issue have not actually been supplied by the company acquiring the licence, but have in fact been supplied by the company granting it, examining in particular whether the establishment of the place of business or fixed establishment of the company acquiring the licence is not genuine, whether that company, for the purpose of engaging in the economic activity concerned, does not possess an appropriate structure in terms of premises and human and technical resources and whether it does not engage in that economic activity in its own name and on its own behalf, under its own responsibility and at its own risk. (see paras 49, 50, operative part 1) 2. EU law must be interpreted as meaning that, if an abusive practice is found which has resulted in the place of supply of services being fixed in a Member State other than the Member State where it would have been fixed in the absence of that abusive practice, the fact that value added tax has been paid in that other Member State in accordance with its legislation does not preclude an adjustment of that tax in the Member State in which the place where those services have actually been supplied is located. (see para. 53, operative part 2) 3. Regulation No 904/2010 on administrative cooperation and combating fraud in the field of value added tax must be interpreted as meaning that the tax authorities of a Member State which are examining whether value added tax is chargeable in respect of supplies of services that have already been subject to that tax in other Member States are required to send a request for information to the tax authorities of those other Member States when such a request is useful, or even essential, for determining that value added tax is chargeable in the first Member State. (see para. 59, operative part 3) 4. See the text of the decision. (see para. 83) 5. EU law must be interpreted as not precluding, for the purposes of the application of Article 4(3) TEU, Article 325 TFEU and Articles 2, 250(1) and 273 of Directive 2006/112 on the common system of value added tax, the tax authorities from being able, in order to establish the existence of an abusive practice concerning value added tax, to use evidence obtained without the taxable person’s knowledge in the context of a parallel criminal procedure that has not yet been concluded, by means, for example, of the interception of telecommunications and seizure of emails, provided that the obtaining of that evidence in the context of the criminal procedure and its use in the context of the administrative procedure do not infringe the rights guaranteed by EU law. By virtue of Articles 7, 47 and 52(1) of the Charter of Fundamental Rights of the European Union it is incumbent upon the national court which reviews the legality of the decision founded on such evidence adjusting value added tax to verify, first, whether the interception of telecommunications and seizure of emails were means of investigation provided for by law and were necessary in the context of the criminal procedure and, secondly, whether the use by the tax authorities of the evidence obtained by those means was also authorised by law and necessary. It is incumbent upon that court, furthermore, to verify whether, in accordance with the general principle of observance of the rights of the defence, the taxable person had the opportunity, in the context of the administrative procedure, of gaining access to that evidence and of being heard concerning it. If the national court finds that the taxable person did not have that opportunity or that that evidence was obtained in the context of the criminal procedure, or used in the context of the administrative procedure, in breach of Article 7 of the Charter of Fundamental Rights of the European Union, it must disregard that evidence and annul that decision if, as a result, the latter has no basis. That evidence must also be disregarded if the national court is not empowered to check that it was obtained in the context of the criminal procedure in accordance with EU law or cannot at least satisfy itself, on the basis of a review already carried out by a criminal court in an inter partes procedure, that it was obtained in accordance with EU law. (see paras 90, 91, operative part 4)