Judgment;Summary — ECLI:EU:C:2022:1030
Date: 2022-12-22
Language of the case: German
Court formation: Eighth Chamber
Subject matter: Energy;Taxation
Procedure: Reference for a preliminary ruling
Origin: Germany

Translation C-553/21 – 1 
Case C-553/21 
Request for a preliminary ruling 
Date lodged: 
8 September 2021 
Referring court: 
Bundesfinanzhof (Germany) 
Date of the decision to refer: 
8 June 2021 
Defendant and appellant in the appeal on a point of law: 
Hauptzollamt Hamburg 
Applicant and respondent in the appeal on a point of law: 
Shell Deutschland Oil GmbH 
  
VII R 44/19      […] 
BUNDESFINANZHOF (FEDERAL FINANCE COURT) 
ORDER 
In the case of 
Hauptzollamt Hamburg (Main Customs Office, Hamburg) 
[…] Defendant and appellant in the appeal on a point of law 
v 
Shell Deutschland Oil GmbH 
[…] Hamburg 
Applicant and respondent in the appeal on a point of law 
[…] application for energy tax relief for the months of August to November 2010 
EN 
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the Seventh Chamber 
[…] [composition of the court] 
made the following order on 8 June 2021: 
1. The following question is referred to the Court of Justice of the 
European Union for a preliminary ruling: 
Does the principle of proportionality under EU law apply also to the optional 
tax reduction provided for in the fourth indent of the first sentence of 
Article 5 of Directive 2003/96, such that the Member State may not refuse to 
grant the tax reduction after the period for making an application under 
national law has expired, if assessment has not yet been time-barred at the 
time the application is received by the competent authority? 
2. The proceedings are stayed pending a ruling by the Court of Justice of 
the European Union on the question referred for a preliminary ruling. 
Reasons 
I. 
The applicant and respondent in the appeal on a point of law (‘the applicant’), an 
undertaking in the manufacturing industry, applied to the defendant and appellant 
in the appeal on a point of law (‘the HZA’) for energy tax relief under 
Paragraph 54(1) of the Energiesteuergesetz (Law on Energy Tax, ‘the 
EnergieStG’) for the months of August to November 2010 using the prescribed 
official form. The applications were not submitted to the HZA until May 2012 
and, in the meantime, a tax audit of the applicant had commenced in 2011. 
It is common ground that, aside from its failure to submit an application, the 
applicant fulfilled all the requirements for tax relief under Paragraph 54(1) of the 
EnergieStG throughout 2010. 
The HZA refused to grant the energy tax relief. The original complaint was 
rejected, but the action was upheld and the HZA is contesting it in an appeal on a 
point of law. 
II. 
The Chamber has stayed the appeal on a point of law pending before it […] 
[national procedural provisions] and referred the following question to the Court 
of Justice of the European Union (‘the Court’) for a preliminary ruling: 
Does the principle of proportionality under EU law also apply to the optional tax 
reduction provided for in Article 5, first sentence, fourth indent, of Directive 
2003/96, such that the Member State may not refuse to grant the tax reduction 
after the application period regulated under national law has expired if assessment 
HAUPTZOLLAMT HAMBURG 
 
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has not yet been time-barred when the application is received by the competent 
authority? 
III. 
The Chamber is of the opinion that the case has to be adjudicated in light of the 
provisions of Council Directive 2003/96/EC of 27 October 2003 restructuring the 
Community framework for the taxation of energy products and electricity (OJ 
2003 L 283, p. 51), as amended by Council Directive 2004/75/EC of 29 April 
2004 amending Directive 2003/96/EC as regards the possibility for Cyprus to 
apply, in respect of energy products and electricity, temporary exemptions or 
reductions in the levels of taxation (OJ 2004 L 157, p. 100, ‘Directive 2003/96’). 
The Chamber has doubts as to the interpretation of this Directive that will 
influence judgment in the matter. 
Applicable EU law: 
Article 5 of Directive 2003/96: 
Provided that they respect the minimum levels of taxation prescribed by this 
Directive and that they are compatible with Community law, differentiated rates 
of taxation may be applied by Member States, under fiscal control, in the 
following cases: 
- (…) 
- between business and non-business use, for energy products and 
electricity referred to in Articles 9 and 10. 
Article 6 of Directive 2003/96: 
Member States shall be free to give effect to the exemptions or reductions in the 
level of taxation prescribed by this Directive either: 
(a) directly, 
(b) by means of a differentiated rate, or 
(c) by refunding all or part of the amount of taxation. 
Applicable national law: 
Paragraph 54 of the EnergieStG Tax relief for undertakings: 
(1) Tax relief shall be granted upon application for energy products which have 
demonstrably been taxed under Paragraph 2(3), first sentence, point 1 or points 3 
to 5, and which have been used as fuel by an undertaking in the manufacturing 
industry within the meaning of Paragraph 2, point 3, of the Stromsteuergesetz 
(Law on Electricity Tax) or by an agricultural and forestry undertaking within the 
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meaning of Paragraph 2, point 5, of the Law on Electricity Tax or used in 
beneficiary installations in accordance with Paragraph 3 for business purposes. 
However, tax relief shall only be granted on energy products used to generate heat 
where the heat generated was demonstrably used by an undertaking in the 
manufacturing industry or an agricultural and forestry undertaking. 
(2) to (4) (…) 
Paragraph 100 of the Verordnung zur Durchführung des Energiesteuergesetzes 
(Regulation Implementing the Law on Energy Tax, ‘the EnergieStV’) Tax relief 
for undertakings: 
(1) The applicant must apply for tax relief under Paragraph 54 of the Law to the 
main customs office with which it is registered, using the officially prescribed 
form (return) to notify all energy products used within a tax relief period. The 
applicant must include in the return all the information needed to assess the tax 
relief and a calculation of the tax relief. The tax relief shall be granted only if the 
application is submitted to the main customs office by no later than 31 December 
of the year following the calendar year in which the energy products were used. 
(2) to (5) (…) 
Paragraph 47 of the Abgabenordnung (Tax Code, ‘the AO’) Expiry: 
Claims arising from the tax liability shall expire in particular as a result of (…), 
limitation (Paragraphs 169 to 171, Paragraphs 228 to 232), (…) 
Paragraph 169 of the AO Period for assessment: 
(1) Tax assessment and its cancellation or amendment shall no longer be 
permissible once the period for assessment has expired. (…) 
(2) The period for assessment shall be: 
1. one year for excise duties and excise duty rebates; 
2. (…) 
Paragraph 170 of the AO Period for assessment: 
(1) The period for assessment shall commence at the end of the calendar year in 
which the tax accrued or a tax which accrued conditionally became unconditional. 
(2) to (7) (…) 
Paragraph 171 of the AO Suspension of period for assessment: (1) to (3a) (…) 
(4) If a tax audit commences prior to expiry of the period for assessment or if its 
commencement is postponed at the request of the taxable person, the period for 
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assessment for the taxes which are or, where the tax audit is postponed, should 
have been covered by the tax audit shall not expire before the tax assessment 
notices issued on the basis of the tax audit have become final (…); this shall be 
without prejudice to suspension of the period for assessment under other 
provisions. 
IV. 
The Chamber has doubts as to how this case should be appraised under EU law. 
Either the applicant’s claim to tax relief under Paragraph 54(1), first sentence, first 
alternative, of the EnergieStG is precluded because the HZA received the 
application which has to be submitted on the officially prescribed form under 
Paragraph 100(1) of the EnergieStV after expiry of the application period 
regulated in Paragraph 100(1), third sentence, of the EnergieStV, but before 
expiry of the period for assessment pursuant to Paragraph 169(2) of the AO, or 
rejection of that claim is precluded by the principle of proportionality under EU 
law. 
1. Article 5 of Directive 2003/96 allows the Member States to apply 
differentiated rates of taxation under certain circumstances. That applies, for 
example, where a distinction is made between business and non-business use of 
the products and electricity referred to in Articles 9 and 10 of Directive 2003/96 
(Article 5, first sentence, fourth indent, of Directive 2003/96). As this is an option 
open to the Member States, the tax relief is also optional. According to 
Article 6(c) of Directive 2003/96, Member States are also free to grant tax 
reductions by means of a total or partial refund of taxes already paid. 
It was on that basis that the German legislature introduced the tax relief provided 
for in Paragraph 54(1) of the EnergieStG. It allows for tax relief to be granted 
upon application for energy products which have demonstrably been taxed under 
Paragraph 2(3), first sentence, point 1 or points 3 to 5 of the EnergieStG, and 
which have been used as fuel by an undertaking in the manufacturing industry 
within the meaning of Paragraph 2, point 3, of the Law on Electricity Tax for 
business purposes. According to Paragraph 100(1) of the EnergieStV, one of the 
preconditions to the tax relief is that the applicant must apply for it from the main 
customs office with which it is registered, using the officially prescribed form to 
report all energy products used within a certain period (tax relief period). The 
applicant must include in the return all the information needed to assess the tax 
relief and a calculation of the tax relief. The tax relief is granted only if the 
application is submitted to the main customs office by no later than 31 December 
of the year following the calendar year in which the claim to tax relief accrued. 
Thus, the energy tax relief depends upon the submission of a timely application. 
2. In the present case, all the preconditions to the application of Paragraph 54 
of the EnergieStG are in fact satisfied. The applicant is an undertaking in the 
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manufacturing industry which used the energy products covered by the 
applications for relief as fuel for business purposes. 
a) The applicant’s claim to tax relief has not lapsed as a result of assessment 
being time-barred (Paragraph 47 of the AO). 
According to Paragraph 169(1), first sentence, of the AO, a tax assessment and 
cancellation or amendment thereof cease to be permissible once the period for 
assessment has expired. The same applies, mutatis mutandis, to assessment of a 
tax rebate. The period for assessment for excise duties and excise duty rebates is 
1 year (Paragraph 169(2), first sentence, point 1, of the AO). According to 
Paragraph 170(1) of the AO, that period began in this case at the end of 2010, the 
year for which the applicant is seeking a tax rebate and during which the rebate 
claims accrued due to the use of energy products. The derogation provided for in 
Paragraph 170(2), first sentence, point 1, of the AO, read in combination with the 
second sentence, does not apply, as it is for the beneficiary of the tax relief to 
decide whether or not to claim the tax allowance; there is no obligation to file a 
tax return (see judgment of the Chamber of 26 September 2017, Case VII R 26/16 
[…], with further citations). As the period for assessment is 1 year, it should have 
ended at midnight on 31 December 2011. However, expiry of the period for 
assessment was suspended pursuant to Paragraph 171(4) of the AO, as the tax 
audit had commenced before it expired and the notices issued based on that tax 
audit were not yet final. Thus, when the HZA received the applications for tax 
relief in May 2012, assessment had not yet been time-barred. 
The period for assessment provides legal certainty and ensures legal concord. The 
Court also recognises such limitation periods. If it were possible to make an 
application without any temporal limit, that would be contrary to the principle of 
legal certainty, which requires the tax position of the taxable person, having 
regard to his rights and obligations vis-à-vis the tax authorities, not to be open to 
challenge indefinitely (judgment of 21 June 2012, Elsacom, C-294/11, 
EU:C:2012:382, paragraph 29, […]). 
b) Nevertheless, the applicant should be refused the tax relief, as its 
applications were not received by the HZA within the application period laid 
down in Paragraph 100(1) of the EnergieStV. The applications for tax relief for 
the months of August to November 2010 were not received by the competent 
main customs office (HZA) until May 2012, that is after the application period 
had expired on 31 December 2011. 
3. The Chamber questions whether the tax relief provided for in Paragraph 54(1) 
of the EnergieStG may be refused simply because the applicant missed the 
application deadline or whether the principle of proportionality under EU law 
requires that the tax relief be granted nonetheless. 
a) When exercising their powers, Member States must observe the general 
principles of law which form part of the legal order of the European Union, which 
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include, in particular, the principles of legal certainty and proportionality 
(judgments of 6 September 2012, Mecsek-Gabona, C-273/11, EU:C:2012:547, 
[…], and of 2 June 2016, ROZ-SWIT, C-418/14, EU:C:2016:400, […]). The 
principle of proportionality requires that measures adopted by the Member States 
in order to ensure the correct levying and collection of tax and for the prevention 
of fraud must not go further than is necessary to attain such objectives (see 
judgment of 21 March 2000, Gabalfrisa and Others, C-110/98 to C-147/98, 
EU:C:2000:145, paragraph 52, […]; order of 3 March 2004, Transport Service, 
C-395/02, EU:C:2004:118, paragraph 29, […]; and judgment of 27 September 
2007, Collee, C-146/05, EU:C:2007:549, paragraph 26, […]). 
According to the case-law of the Court, (see judgment of 7 November 2019, 
Petrotel-Lukoil, C-68/18, EU:C:2019:933, […]), it is contrary to EU law to 
penalise a breach of formal national requirements by refusing a tax allowance 
under Directive 2003/96. National legislation may not go further than what is 
necessary to ensure the correct and straightforward application of those 
exemptions and to prevent any evasion, avoidance or abuse (judgment of 2 June 
2016, Polihim-SS, C-355/14, EU:C:2016:403, paragraph 62, […]). 
b) The Chamber is inclined to take the view that late receipt of the application 
by the competent authority cannot cause that claim to energy tax relief to lapse 
before the period for assessment has expired. 
aa) The Court held in its judgment in Petrotel-Lukoil (EU:C:2019:933, […]) 
that automatic application of the excise duty rate laid down for gas oil and the 
maintenance of that rate in the absence of such a request for classification being 
made infringes the principle of proportionality. That judgment was delivered in 
connection with a mandatory tax exemption (Article 21(3) of Directive 2003/96). 
The Court pointed out in that judgment that both the general scheme and the 
purpose of Directive 2003/96 are based on the principle that energy products are 
taxed in accordance with their actual use (paragraphs 50 and 53). On the other 
hand, an infringement of formal requirements cannot call into question the 
taxation of products in accordance with the substantive conditions laid down in 
Directive 2003/96 (paragraph 59). 
According to the case-law of the Chamber, an application for energy tax relief is 
merely a formal requirement; it is not a substantive condition of a claim to tax 
relief (see, for example, judgments of the Chamber of 20 September 2016, Case 
VII R 7/16, […], and of 18 February 2020, Case VII R 39/18, […], paragraph 32, 
with further citations). That might suggest that the late submission of an 
application does not prevent an energy product from being taxed according to its 
actual use (in the present case, as fuel for business purposes). However, the tax 
relief applied for in this case under Paragraph 54(1) of the EnergieStG, is based on 
an optional tax allowance; hence, the referring court questions whether the case-
law of the Court on mandatory tax exemptions also applies in this case. 
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bb) The Chamber is of the opinion that the Member States must comply with the 
principle of proportionality even when transposing optional tax allowances into 
national law, should they decide to do so. Otherwise, there would be unequal 
treatment between mandatory and optional tax allowances. However, the question 
arises as to whether different legal bases in EU law might justify such unequal 
treatment. 
The Court has demanded compliance with the principle of proportionality under 
EU law in the context of Council Directive 2006/112/EC of 28 November 2006 on 
the common system of value added tax (OJ 2006 L 347, p. 1), even where a 
Member State transposes an optional and favourable regulatory power conferred 
on it into national law (see judgment of 30 April 2020, CTT  Correios de 
Portugal, C-661/18, EU:C:2020:335, paragraph 34 et seq., with further citations, 
[…]). While the Member States have discretion in the choice of measures to be 
adopted in order to ensure the correct collection of VAT and to prevent evasion, 
they must exercise that power in accordance with EU law and its general 
principles, and, in particular, in accordance with the principles of proportionality, 
fiscal neutrality and legal certainty. It might be inferred from this that, even in the 
context of Directive 2003/96, different treatment between mandatory and optional 
tax relief in terms of compliance with the principle of proportionality is out of the 
question. 
On the other hand, in his Opinion of 12 May 2021 in Case C-100/20 
(EU:C:2021:387), Advocate General Szpunar referred to the differences between 
mandatory and optional tax allowances in the context of Directive 2003/96. The 
Advocate General clarified in particular that optional provisions do not confer 
rights with direct effects on taxable persons which the taxable persons could 
enforce in the national courts (point 69). That might suggest, in the case of 
optional tax allowances, that, aside from general principles such as the principle of 
equal treatment or the right to property (points 72 et seq. and 82 et seq.), it is in 
particular the transposition into national law that matters and the case-law of the 
Court on the principle of proportionality need not automatically be complied with. 
c) The question referred will enable judgment to be given. If the question 
referred by the Chamber is answered in the affirmative, the HZA’s appeal on a 
point of law would be unfounded. 
[…] [Names of the judges involved in the deliberations]