Opinion of the Advocate General — ECLI:EU:C:2006:216
Date: 2006-03-30
Language of the case: French
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: State aids;Competition;Taxation;Internal taxation
Procedure: Reference for a preliminary ruling
Origin: Belgium

Summary of the Judgment 1. Preliminary rulings – Jurisdiction of the Court – Limits (Art. 234 EC) 2. State aid – Definition (Art. 87(1) EC) 3. State aid – Planned aid – Prohibition on giving effect to plans before the Commission’s final decision – Direct effect (Arts 87 EC and 88(3) EC) 4. Free movement of goods – Customs duties – Charges having equivalent effect – Rules laid down in the Treaty 5. Free movement of goods – Customs duties – Charges having equivalent effect – Meaning (Art. 25 EC) 6. Tax provisions – Internal taxation – Prohibition of discrimination between imported or exported products and similar domestic products (Art. 90 EC) 1. In the context of the procedure established by Article 234 EC providing for cooperation between national courts and the Court of Justice, it is for the latter to provide the national court with an answer which will be of use to it and enable it to determine the case before it. It is for the national court hearing a dispute to determine 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. The Court may, however, refuse to rule on a question referred for a preliminary ruling by a national court, inter alia where it is quite obvious that the interpretation of Community law sought bears no relation to the actual facts of the main action or its purpose. (see paras 23-24) 2. The aim of Article 87 EC is to prevent trade between Member States from being affected by benefits granted to public authorities which, in various forms, distort or threaten to distort competition by favouring certain undertakings or the production of certain goods. The conditions required by Article 87(1) EC for categorising a national measure as State aid are, first, the financing of that measure by the State or through State resources, secondly, the existence of a benefit for an undertaking, thirdly, the selective nature of the said measure, fourthly, its effect on trade between Member States and the distortion of competition resulting therefrom. Concerning the first and second conditions, the definition of aid is more general than that of subsidy, because it includes not only positive benefits, such as subsidies themselves, but also State measures which, in various forms, mitigate the charges which are normally included in the budget of an undertaking and which thus, without being subsidies in the strict sense of the word, are similar in character and have the same effect. It follows that a measure by which the public authorities grant to certain undertakings a tax exemption which, although not involving a transfer of State resources, places the persons to whom the tax exemption applies in a more favourable situation than other taxpayers constitutes State aid within the meaning of Article 87(1) EC. Concerning the third condition, relating to the selective nature of the measures at issue, tax advantages which do not apply to all economic operators, but which are granted solely to undertakings exercising certain types of activities, cannot be considered to be general measures of tax or economic policy. As regards, finally, the fourth condition, which requires that the measure in question affects trade between Member States and distorts or threatens to distort competition, it is necessary, not to establish that the aid has a real effect on trade between Member States and that competition is actually being distorted, but only to examine whether that aid is liable to affect such trade and distort competition. In particular, where aid granted by a Member State strengthens the position of an undertaking compared with other undertakings competing in intra-Community trade, the latter must be regarded as affected by that aid. Moreover, it is not necessary that the recipient undertaking itself be involved in the said trade. Finally, the relatively small amount of the aid or the relatively small size of the undertaking which receives it does not as such exclude the possibility that trade between Member States might be affected. If those four conditions are satisfied, the exemption from a municipal or provincial tax on motive force granted solely in respect of motors used in natural gas stations, to the exclusion of motors used for other industrial gases, may be regarded as State aid within the meaning of Article 87 EC. (see paras 27-36, 38, operative part 1) 3. In accordance with the third sentence of Article 88(3) EC, a Member State cannot put its proposed aid measures into effect until they have been declared compatible with the common market. In that regard, national courts are involved in the system for reviewing State aid only through the direct effect attributed by case-law to the prohibition on putting State aid into effect, in accordance with the third sentence of Article 88(3) EC. It is, in particular, for the national courts to uphold the rights of the persons concerned in the event of a possible breach by national authorities of the prohibition on putting aid into effect. With regard to the measures which may or must be taken to ensure this legal protection, where such a breach is invoked, national courts must take all the consequential measures, in accordance with national procedures, as regards both the validity of measures giving effect to the aid and the recovery of financial support granted in disregard of Article 88(3) EC. However, those liable to pay a tax cannot rely on the argument that the exemption enjoyed by other businesses constitutes State aid in order to avoid payment of that tax or to obtain reimbursement of it, since even if the exemption at issue constitutes aid within the meaning of Article 87 EC, the fact that the aid may be unlawful does not affect the tax itself. The last sentence of Article 88(3) EC lays down an obligation the aim of which is to ensure that aid is not granted until the Commission has declared it compatible with the common market. In this context, the powers of national courts are essentially preventive and cannot exceed those conferred on the Commission where it takes a decision on the legality of State aid following a substantive assessment. Finally, not only would an extension of the circle of potential recipients to other undertakings not make it possible to eliminate the effects of aid granted in breach of Article 88(3) EC but it would rather, on the contrary, lead to an increase in the effects of that aid, as a tax cannot be hypothecated to an exemption from payment of it for a category of businesses, since application of a tax exemption and its extent do not depend on the tax revenue. (see paras 40-46, 48, operative part 2) 4. The Treaty provisions relating to charges having an 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. (see para. 50) 5. 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 Article 25 EC. A tax on motive force, levied in particular on motors used for transporting industrial gas through very high pressure pipes, does not constitute a charge having equivalent effect within the meaning of Article 25 EC, since it is the functioning of these motors and their consumption of energy which constitute the chargeable event, whatever the substance or the energy source used to operate them, and not because a frontier is crossed, and thus the said tax is not connected with the import or export of goods. (see paras 51, 53-54, operative part 3) 6. Within the system of the Treaty, Article 90 EC supplements the provisions on the abolition of customs duties and charges having equivalent effect. Its aim is to ensure free movement of goods between the Member States in normal conditions of competition by the elimination of all forms of protection which may result from the application of internal taxation that discriminates against products from other Member States. Pecuniary charges resulting from a general system of internal taxation applied systemically, in accordance with the same objective criteria, to categories of products irrespective of their origin or destination fall within Article 90 EC. A tax on motive force, levied in particular on motors used for transporting industrial gas through very high pressure pipes, does not constitute discriminatory internal taxation for the purposes of Article 90 EC since it is not imposed specifically on exported or imported products or in such a way as to differentiate them, given that it applies to economic activities carried out by industrial, commercial, financial or agricultural undertakings and not to products as such, and, in addition, the exemption granted concerns motors used for transporting natural gas which is not sufficient to establish that the tax is discriminatory, as that gas is not a product analogous to industrial gas or a product that competes with it. (see paras 55-59, operative part 4)