Opinion of the Advocate General — ECLI:EU:C:2011:613
Date: 2011-09-22
Language of the case: Portuguese
Subject matter: Taxation;Value added tax
Procedure: Action for failure to fulfil obligations - successful;Action for failure to fulfil obligations - inadmissible
Origin: Portugal

summary of the pleas in law on which the application is based and that that statement must be sufficiently clear and precise to enable the defendant to prepare its defence and the Court to rule on the application. It is therefore necessary for the points of law and of fact on which a case is based to be indicated coherently and intelligibly in the application itself. (50) These conditions are not met by the Commission’s application as regards the second part of its claim. 77. Since the Commission has not expressly withdrawn the second part of its claim and a ruling on it must therefore be given, it must be rejected as inadmissible in the absence of sufficient grounds. V – Costs 78. Since both parties have applied for the other to be ordered to pay the costs, and both have been partially unsuccessful in their pleadings, I propose that each party should bear its own costs in accordance with Article 69(3) of the Rules of Procedure. VI – Conclusion 79. I propose that the Court should: (1) declare that, in applying to farmers a special scheme which derogates from the directive and which exempts them from the payment of VAT and applies flat-rate compensation at a nil rate to them, the Portuguese Republic has infringed Articles 296 to 298 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax; (2) dismiss the action as to the remainder; (3) order each party to bear its own costs. 1 – Original language: German. 2 – Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax (OJ 2006 L 347, p. 1, ‘the VAT Directive’ or ‘the directive’). 3 – Emphasis added. 4 – As amended by Decree-Law No 195/89 of 12 June 1989, re-published by Decree‑Law No 102/2008 of 20 June 2008 (as published in Corrigendum No 44‑A/2008 of 13 August 2008). 5 – See Case C‑321/02 Harbs [2004] ECR I‑7101, paragraph 28; Case C‑43/04 Stadt Sundern [2005] ECR I‑4491, paragraph 24; and Case C‑518/07 Commission v Germany [2010] ECR I‑1885, paragraph 17. 6 – See Case C‑533/07 Falco Privatstiftung and Rabitsch [2009] ECR I‑3327, paragraph 20; Case C‑199/08 Eschig [2009] ECR I‑8295, paragraph 58; and Case C‑203/09 Volvo Car Germany [2010] ECR I‑10721, paragraph 40. 7 – Sixth Council Directive 77/388/EEC 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 (OJ 1977 L 145, p. 1). 8 – COM(73) 950 final,available at http://ec.europa.eu/taxation_customs/resources/documents/taxation/vat/COM(1973) 950_en.pdf 9 – Sent to the delegations with Council Note R/2892/1/76 (FIN 758) rev. 1 of 7 December 1976, available at http://www.consilium.europa.eu/uedocs/cmsUpload/226.pdf. The German, Danish, Italian, Dutch and English versions are dated 8 December 1976. 10 – Subsequently Article 25 of Directive 77/388. 11 – Available at http://www.consilium.europa.eu/uedocs/cmsUpload/227.pdf. The German version is dated 23 December 1976, whilst the Danish, Italian, Dutch and English versions are dated 22 December 1976. 12 – Council document R/2855/76 (FIN 750) of 23 and 24 November 1976, available at http://www.consilium.europa.eu/uedocs/cmsUpload/222.pdf 13 – The Commission refers inter alia to Case 415/85 Commission v Ireland [1988] ECR 3097, paragraphs 29 and 30. In that case the Commission had complained, among other things, that Ireland had zero-rated animal feedingstuff, fertilizer and seeds, but the Court considered the nil rate on these agricultural inputs to be compatible with Directive 77/388. 14 – See Case 415/85 Commission v Ireland, cited in footnote 13, paragraph 25. 15 – Which became Article 25(3) of Directive 77/388 and later Article 297(1) of the VAT Directive. 16 – See footnote 8. 17 – Telex of 19 November 1976 to the Council, Council document R/2847/76 (FIN 747) of 22 and 24 November 1976, available at http://www.consilium.europa.eu/uedocs/cmsUpload/222.pdf. 18 – See Council document R/2892/1/76 (FIN 758) rev. 1 of 7 December 1976 (cited in footnote 9). 19 – See the fifth sentence of the first subparagraph of Article 25(3) of Directive 77/388 and the first sentence of the second subparagraph of Article 298 of the VAT Directive. 20 – Previously the first sentence of Article 25(3) of Directive 77/388. 21 – The draft version of Directive 77/388 contains such a provision in the third sentence of the first subparagraph of Article 27(1), before the fourth and fifth sentences were added; see Council document R/2892/1/76 (FIN 758) rev. 1 of 7 December 1976 (cited in footnote 9). 22 – See, for similar arguments by the Commission in connection with the original draft of Directive 77/388 (cited in footnote 8), but with regard to Article 27(11) of that draft, the explanatory memorandum annexed thereto, according to which excessive compensation would amount to economic aid. See also Case 3/86 Commission v Italy [1988] ECR 3369, paragraph 14. 23 – See the letter from the Permanent Representative of Ireland of 19 November 1976 (cited in footnote 12). 24 – The third sentence of the first subparagraph of Article 27(3), which became the third sentence of the first subparagraph of Article 25(3) of Directive 77/388. 25 – As the fourth sentence of the first subparagraph of Article 27(3), which became the fourth sentence of the first subparagraph of Article 25(3) of Directive 77/388. 26 – The first sentence of the first subparagraph of Article 27(3), which became the first sentence of the first subparagraph of Article 25(3) of Directive 77/388. 27 – See the different stages of the drafting process, which can be seen from Council documents R/2514/76 (FIN 663) of 22 October 1976 (the German version is dated 27 October 1976), available at http://www.consilium.europa.eu/uedocs/cmsUpload/219.pdf, R/2892/1/76 (FIN 758) of 25 November 1976 (the German version is dated 1 December 1976), available at http://www.consilium.europa.eu/uedocs/cmsUpload/222.pdf, and R/2892/1/76 (FIN 758) rev. 1 of 7 December 1976 (cited in footnote 9). 28 – See Article 412 of the directive. 29 – Case C‑321/02 Harbs, cited in footnote 5, paragraph 27, and Case C‑43/04 Stadt Sundern, cited in footnote 5, paragraph 27; see, with regard to the special scheme for small enterprises, Case C‑128/05 Commission v Austria [2006] ECR I‑9265, paragraph 22, and my Opinion in Case C‑97/09 Schmelz [2010] ECR I‑10465, point 32. 30 – See also recital 50 in the preamble to the directive. 31 – Case C‑25/07 Sosnowska [2008] ECR I‑5129, paragraph 14; Case C‑392/09 Uszodaépítő [2010] ECR I‑8791, paragraph 15; and Case C‑107/10 Enel Maritsa Iztok 3 [2011] ECR I‑3873, paragraph 31. 32 – Case C‑371/07 Danfoss and AstraZeneca [2008] ECR I‑9549, paragraph 26; Case C‑368/09 Pannon Gép Centrum [2010] ECR I‑7467, paragraph 37; and Case C‑277/09 RBS DeutschlandHoldings [2010] ECR I‑13805, paragraph 39. 33 – Case C‑371/07 Danfoss and AstraZeneca, paragraph 26; Case C‑392/09 Uszodaépítő, paragraph 35; and Case C‑438/09 Dankowski [2010] ECR I‑14009, paragraph 24. 34 – See Article 295(1)(6) and (7). 35 – See Case 3/86 Commission v Italy, cited in footnote 22, paragraph 8. 36 – In Case 415/85 Commission v Ireland, cited in footnote 13, paragraph 29, and Case 416/85 Commission v United Kingdom [1988] ECR 3127, paragraph 20, the Court nevertheless regarded the supply of means of agricultural production in connection with the question whether their supply may exceptionally continue to be zero-rated as sufficiently close to the final consumer. 37 – See Case C‑305/01 MKG-Kraftfahrzeuge-Factoring [2003] ECR I‑6729, paragraph 72, and Case C‑175/09 Axa UK [2010] ECR I‑10701, paragraph 30. 38 – See the draft explanatory memorandum, cited in footnote 8, at Article 27(1), (6), (12), (13) and (16). 39 – See the draft explanatory memorandum cited in footnote 8 at Article 27(1). 40 – See the draft explanatory memorandum cited in footnote 8, at Article 27(2), fourth and fifth indents. 41 – See also Case C‑43/04 Stadt Sundern, cited in footnote 5, paragraph 28. 42 – Case C‑582/08 Commission v United Kingdom [2010] ECR I‑7195, paragraph 48. 43 – Thirteenth Council Directive 86/560/EEC of 17 November 1986 on the harmonisation of the laws of the Member States relating to turnover taxes — Arrangements for the refund of value added tax to taxable persons not established in Community territory (OJ 1986 L 326, p. 40). 44 – Case C‑582/08 Commission v United Kingdom, cited in footnote 42, paragraph 28 et seq., paragraphs 36 and 46. 45 – Case C‑494/01 Commission v Ireland [2005] ECR I‑3331, paragraph 29; Case C‑333/08 Commission v France [2010] ECR I‑757, paragraph 55; and Case C‑20/09 Commission v Portugal [2011] ECR I‑2637, paragraph 31. 46 – Case C‑233/00 Commission v France [2003] ECR I‑6625, paragraph 31; Case C‑266/03 Commission v Luxembourg [2005] ECR I‑4805, paragraph 35; judgment of 21 January 2010 in Case C‑17/09 Commission v Germany, paragraph 20; and Case C‑306/08 Commission v Spain [2011] ECR I‑4541, paragraph 66. 47 – Case C‑333/99 Commission v France [2001] ECR I‑1025, paragraph 25; Case C‑297/08 Commission v Italy [2010] ECR I‑1749, paragraph 87; Case C‑350/08 Commission v Lithuania [2010] ECR I‑10525, paragraph 33; and Case C‑306/08 Commission v Spain, cited in footnote 46, paragraph 66. 48 – Article 25(12) in conjunction with Annex C to Sixth Directive 77/388. 49 – Council Regulation (EEC, Euratom) No 1553/89 of 29 May 1989 on the definitive uniform arrangements for the collection of own resources accruing from value added tax (OJ 1989 L 155, p. 9). 50 – Case C‑412/04 Commission v Italy [2008] ECR I‑619, paragraph 103; Case C‑165/08 Commission v Poland [2009] ECR I‑6843, paragraph 42; and Case C‑267/09 Commission v Portugal [2011] ECR I‑3197, paragraph 25.