Judgment — ECLI:EU:C:2006:306
Date: 2006-05-11
Language of the case: Italian
Court formation: Third Chamber
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Taxation;Indirect taxation
Concepts: Indirect taxation on the raising of capital;Recovery of undue payment
Procedure: Action for failure to fulfil obligations - successful;Action for failure to fulfil obligations - unfounded
Origin: Italy

Notice for the OJ Action brought on 12 May 2003 by the Commission of the European Communities against the Italian Republic (Case C-197/03) An action against the Italian Republic was brought before the Court of Justice of the European Communities on 12 May 2003 by the Commission of the European Communities, represented by Enrico Traversa, acting as Agent. The applicant claims that the Court should: (Declare that, by introducing with retroactive effect under Article 11 of Law No 448/98, an annual flat-rate charge on the registration of company documents other than the instrument of incorporation and by providing for rules relating to reimbursement of the repealed administrative charge on registration of the instrument of incorporation which are discriminatory and restrictive as against companies entitled to that reimbursement, the Italian Republic has infringed the obligations imposed on it by Article 10(c) of Council Directive 69/335/EEC 1 concerning indirect taxes on the raising of capital and the principles laid down by the Court of Justice concerning recovery of charges levied by the Member States in breach of Community law; (order the Italian Republic to pay the costs. Pleas in law and new arguments (a) The annual retroactive flat-rate charge on registration of company documents other than the instrument of incorporation The Commission maintains that the retroactive flat-rate charge on registration of company documents other than the instrument of incorporation cannot in any way be deemed to be of a renumerative nature, inasmuch as the Italian tax authorities already levied on registration of such company documents in the years 1985 to 1992 "analogous charges which may be regarded as constituting renumeration for the service provided". The Italian authorities, contrary to the provisions of Article 11(2) of Law No 448/98, are obliged to reimburse in full to the capital companies who have sought recovery within the periods laid down, the amount of the administrative charge on registration of the instrument of incorporation declared invalid by the Court in Joined Cases C-71/91 and C-178/91 Ponente Carni and Cispadana Costruzioni [1993] ECR I-1915, and are not at liberty to reduce that amount by a sum equal to eight times the retroactive annual flat-rate charge provided for in Article 11(1) of Law No 448/98. The introduction of that retroactive annual flat-rate charge constitutes a flagrant breach of the prohibition in Article 10 of Directive 69/335. (b) The detailed rules for calculating interest on the amounts to be repaid to the companies The Commission points out that the detailed rules for calculating interest on refunds of the administrative charge on registration of a company's instrument of incorporation provided for in Article 11(3) of Law No 448/98 concern only a specific category of actions for restitution, namely those based on an infringement of Article 10 of Directive 69/335, that is to say a breach of a provision of Community law. Since those detailed rules for calculating interest are manifestly less favourable in contrast to those applicable in the case of analogous actions based on national law, the Commission concludes that Article 11(3) of Law No 448/98 constitutes an infringement of the principle of equivalence upheld by the Court. (c) Detailed rules for reimbursement of the repealed administrative charge on registration of the instrument of incorporation In the Commission's view, the requirements contained in Article 11(4) and (5) of Law No 448/98 and in implementing circular No 32/E providing for a commencement date for reimbursement procedures, introducing an annual ceiling of amounts earmarked for reimbursement and suspending the reimbursements themselves in cases where proceedings at first instance are still pending, occasion, or are likely to occasion, delays in repayment of the repealed charge on registration of a company's instrument of incorporation. This deferral of reimbursements and the consequent extension of the duration of judicial proceedings for recovery of the registration charge quite plainly renders excessively difficult the exercise of a right conferred by the Community legal order and, more specifically, the right of capital companies to be subject, on incorporation, only to the harmonised tax on contributions and to seek recovery of other non-harmonised indirect taxes prohibited under Article 10 of Directive 69/335. The Commission concludes that the Italian legislature, by introducing restrictive rules on reimbursement provided for in Article 11(4) and (5) of Law No 448/98, has at one and the same time infringed all three principles upheld by the Court in regard to the recovery of charges levied by the Member States in breach of Community law, that is to say not only the principle of equivalence and the maintenance of the effects of judgments of the Court declaring a charge incompatible with Community law but also the principle of effectiveness. ____________ 1 - (OJ English Special Edition 1969 II, p. 412.