Judgment;Summary — ECLI:EU:C:2022:836
Date: 2022-10-27
Language of the case: Portuguese
Court formation: Seventh Chamber
Subject matter: Freedom to provide services
Procedure: Reference for a preliminary ruling
Origin: Portugal

Summary C-411/21 – 1 
Case C-411/21 
Summary of the request for a preliminary ruling pursuant to Article 98(1) of 
the Rules of Procedure of the Court of Justice 
Date lodged: 
5 July 2021 
Referring court: 
Supremo Tribunal Administrativo (Supreme Administrative Court, 
Portugal) 
Date of the decision to refer: 
10 March 2021 
Appellant: 
Instituto do Cinema e do Audiovisual, I.P. 
Respondent:  
NOWO Communications, S.A. 
  
Subject matter of the main proceedings 
Appeal against the judgment given at first instance by the Tribunal Administrativo 
e Fiscal de Almada (Administrative and Finance Court, Almada, Portugal; ‘the 
TAF, Almada’) by which that court declared the subscription fee payable by 
operators of subscription television services to the Instituto do Cinema e do 
Audiovisual (Film and Audiovisual Media Institute) for access to television 
programming services in the national territory to be contrary to the freedom to 
provide services laid down in Article 56 TFEU. 
Subject matter and legal basis of the request for a preliminary ruling 
Revenue from the collection of a subscription fee from subscription television 
service operators active in the national territory is used to finance the 
development, promotion and dissemination of Portuguese film and audiovisual 
works. 
EN 
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The referring court seeks clarification as to whether the fact that that financing 
reduces the cost of national film and audiovisual productions, and therefore 
favours the purchase of those productions over that of productions from other 
Member States, gives rise to indirect discrimination against cross-border supplies 
of those services, thus infringing the freedom to provide services established in 
Article 56 TFEU. 
Questions referred for a preliminary ruling 
‘1) Is Article 10(2) of Lei n.º 55/2012, de 6 de setembro (Law No 55/2012 of 
6 September 2012), if interpreted as meaning that the fee for which it provides is 
to be used exclusively to finance the promotion and dissemination of Portuguese 
film and audiovisual works, liable to give rise to indirect discrimination against 
the provision of services between Member States as compared with the 
corresponding national provision of services, inasmuch as it makes the provision 
of services between Member States more difficult than the purely domestic 
provision of services within a Member State, thus infringing Article 56 TFEU? 
2) Might the answer to be given to the first question referred be altered by the 
fact that other Member States of the European Union operate schemes which are 
identical or similar to that provided for in Law No 55/2012?’ 
Provisions of European Union law relied on  
Article 56 TFEU 
Provisions of national law relied on 
Lei n.º 55/2012 – Princípios de ação do Estado no quadro do fomento, 
desenvolvimento e proteção da arte do cinema e das atividades cinematográficas e 
audiovisuais (Law No 55/2012 – Principles of State action in the context of the 
promotion, development and protection of the art of cinema and film and 
audiovisual activities) (Diário da República n.º 173/2012, series I of 6 September 
2012) 
In accordance with Article 2(p) of Law No 55/2012, entitled ‘Definitions’: 
‘For the purposes of the application of this Law and its implementing provisions, 
p) “operator of subscription television services” means any legal person who 
provides access in national territory to television programming services, via 
any platform, device or technology, pursuant to a contractual obligation 
subject to a subscription or other form of prior individual authorisation 
whereby the end user pays for the provision of those services, whether these 
are supplied individually or as part of a package comprising other electronic 
communications services, irrespective of the type of equipment used to 
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benefit from the services, and even if the overall commercial offer implies 
that the television service is provided free of charge’.  
Article 3 of Law No 55/2012, under the heading ‘Principles and objectives’, is 
worded as follows: 
‘1 – In the context of matters governed by this Law, the State shall be bound by 
the following principles: 
a) support for the creation, production, distribution, exhibition, dissemination 
and promotion of film and audiovisual works as tools for expressing cultural 
diversity, asserting national identity, promoting the language and reinforcing 
the image of Portugal in the world, in particular as regards the strengthening 
of relations with countries with Portuguese as their official language; 
b) the protection and promotion of the cinematic art and, in particular, of new 
talents and first works; 
c) the adoption of support measures and programmes aimed at promoting the 
development of the business fabric of, and the market for, film and 
audiovisual works in accordance with the principles of transparency and 
impartiality, competition, freedom of creation and expression and cultural 
diversity; 
d) the promotion of interaction with players in the sectors of film and 
audiovisual media, social media, education and telecommunications; 
e) the long-term promotion and conservation of film and audiovisual heritage 
through measures to ensure its preservation. 
2 – In the context of matters governed by this Law, the State shall pursue the 
following objectives: 
a) to encourage the creation, production, distribution, exhibition, dissemination 
and publication of national film and audiovisual works, in particular by 
means of support and incentive measures; 
b) to promote the quality, cultural diversity, artistic singularity and economic 
viability of film and audiovisual works, in particular by allocating support 
aimed at ensuring that the creators of such works are able to disseminate 
them extensively and make them profitable; 
c) to promote defence of the rights of authors and producers of film and 
audiovisual works, as well as of the rights of artists, performers and 
producers of such works; 
d) to promote Portuguese language and culture; 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-411/21 
 
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e) to encourage interaction between the independent production sector and the 
sectors connected with the exhibition, distribution, dissemination and 
making available of film and audiovisual works; 
f) to encourage international co-production through the conclusion of bilateral 
reciprocity agreements and international conventions; 
g) to intensify cooperation with countries with Portuguese as their official 
language; 
h) to help strengthen the business fabric of the film and audiovisual sectors by 
providing incentives and other support measures, and in particular by 
promoting investment in small and medium-sized national firms with a view 
to creating value and employment; 
i) to encourage the exhibition, dissemination, promotion, popularisation and 
economic exploitation of national film and audiovisual works; 
j) to contribute towards the internationalisation of film and audiovisual works, 
as well as towards the national and international recognition of the creators, 
producers, performers and technical teams associated with those works; 
k) to contribute towards the development of audiences, in particular through 
the provision of support for film festivals, film clubs, exhibition in 
municipal cinemas and cultural associations for the promotion of film 
activity and, in particular, through the promotion of basic training in film in 
educational establishments; 
l) to promote the conservation of Portugal’s national film and audiovisual 
heritage, as well as its enhancement and permanent exhibition to the public; 
m) to promote the adoption of measures to ensure access to film and audiovisual 
works for persons with disabilities; 
n) to contribute to the development of education in the arts and vocational 
training in the film and audiovisual sectors. 
3 – In the context of matters governed by this Law, the State shall: 
a) draw up and publish annually a statement of priorities as to support for the 
film and audiovisual media industry, informed by a strategic vision of 
investment in film and audiovisual activities and based on financing needs 
and existing financial resources; 
b) ensure a rigorous and transparent implementation of the policy of support 
for the film and audiovisual media industry; 
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c) ensure participation by industry creators and professionals, as well as by 
undertakings involved in film and audiovisual media activities, in the 
definition of priorities and the implementation of support measures; 
d) promote and contribute towards the exhibition to the public of works 
subsidised by the State. 
4 – The State shall support European cinema with due regard for the rules of 
international law in force, in particular those established within the framework of 
the European Union (EU), the Council of Europe Convention on Cinematographic 
Co-Production, the UNESCO Convention on Cultural Diversity and international 
treaties on intellectual property. 
5 – The support and measures provided for in this Law are compatible with the 
support and incentive schemes enshrined in the provisions of international and 
Community law which are binding on the Portuguese State’.  
Article 8 of Law No 55/2012, which carries the heading ‘Beneficiaries’, provides 
as follows in paragraph 3 thereof: 
‘Distributors and exhibitors may obtain support in accordance with the provisions 
of the Decree-Law to be adopted in implementation of this Law for the purposes 
of distributing and exhibiting national works, European works and lesser-known 
cinematographic works’. 
Article 10(2) of the aforementioned Law, under the heading ‘Fees’, provides as 
follows: 
‘Operators of subscription television services shall be subject to the payment of an 
annual fee of (EUR) 2 per subscription for access to television services, payable 
by the operators’. 
Article 18(1) and (3) of Law No 55/2012, which carries the heading ‘Access to 
distribution, exhibition and dissemination markets’, is worded as follows: 
‘1 – The State shall adopt measures to support the distribution, exhibition and 
promotion of cinematographic works in national and international markets, in 
particular by providing incentives for the exhibition of national cinematographic 
works – especially those that are subsidised – or European works in municipal 
cinemas, and by introducing measures to foster partnerships between national 
producers and distributors. 
[…] 
3 – The State shall adopt measures to support cinematographic exhibitors whose 
programme is mostly or usually comprised of national and European 
cinematographic works, including feature films, documentaries, short films and 
animated films and who carry on their business in alternative exhibition circuits’. 
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Brief presentation of the facts and the main proceedings 
1 By letter of 9 August 2013, the Instituto do Cinema e do Audiovisual (Film and 
Audiovisual Media Institute) sought payment from the company NOWO 
Communications, S.A., formerly known as Cabovisão-Televisão por Cabo, S.A., 
of a sum of EUR 886 042.50 in respect of the annual fee payable by subscription 
television operators. 
2 On 27 August 2013, the Instituto do Cinema e do Audiovisual issued a demand 
notice for the payment of EUR 886 042.50 in respect of the fee assessed as due, 
which was sent to the company NOWO Communications, S.A., by the Serviço de 
Finanças de Palmela (Tax Office, Palmela, Portugal). 
3 On 2 October 2013, the company NOWO Communications, S.A., filed an 
application for reconsideration of the assessment in question, and also requested a 
bank guarantee in order to have the enforcement proceedings suspended. 
4 By letter of 27 May 2014, notice was given of the decision dismissing the 
application for reconsideration. That decision was later challenged by way of an 
action before the TAF, Almada. 
5 By judgment of 29 November 2018, the TAF, Almada upheld that action in its 
entirety and annulled the subscription fee assessment on the ground that it was 
contrary to the freedom to provide services and Article 56 TFEU. 
6 The referring court must now rule on the appeal brought by the Instituto do 
Cinema e do Audiovisual against that judgment. 
Main arguments of the parties in the main proceedings 
7 The Instituto do Cinema e do Audiovisual (‘the appellant’) submits that the 
subscription fee is compatible with EU law and does not therefore infringe the 
provisions of Article 56 TFEU. 
8 It argues that, since the contested fee relates exclusively to access to television 
programme services provided in national territory and is payable by all operators 
of subscription television services active within that territory, all aspects of the 
activity of providing subscription television services are confined to the national 
territory.  
9 The TAF, Almada, however, took the view in the judgment under appeal that the 
assessment of the fee payable constitutes a restriction of the freedom to provide 
services not of the company NOWO Communications, S.A. (‘the respondent’) but 
of service providers connected with cinematographic and audiovisual production 
abroad. 
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10 The appellant submits that, even if the view is taken that the respondent may 
legitimately claim that the subscription fee is unlawful on the ground of alleged 
indirect discrimination against supplies of services effected by other entities not 
party to the dispute, it has not been demonstrated that there is any restriction on 
the freedom to provide those services in this regard either. 
11 According to the appellant, it is wrong to assume that the subscription fee is meant 
to be used exclusively to finance the promotion and dissemination of Portuguese 
cinematographic works when, in actual fact, Law No 55/2012 and the subsequent 
implementing legislation also provide for support for the production, distribution, 
exhibition, promotion and dissemination of European works. 
12 Even if the view is taken that the revenue raised is essentially used to finance 
national works, it could not be concluded, on the basis of an analysis of that legal 
framework alone, that the earmarking of that revenue has or is capable of having 
the effect of making it more difficult for services to be provided between Member 
States. 
13 Such a restriction could be found to exist only if it could be concluded that the 
earmarking of that revenue favours the purchase of Portuguese cinematographic 
and audiovisual works to the detriment of European works and makes the 
provision of services between Member States more difficult than the purely 
domestic provision of services within a Member State. According to the appellant, 
however, since there is no proof whatsoever that television service operators are 
inclined to favour the purchase of national works to the detriment of European 
works solely on account of the financing and support which national works 
receive, that conclusion is not in any way based on a detailed and exhaustive 
functional analysis, which is clearly absent from the documents before this court 
and has not been provided by the respondent.  
14 Nor has it been demonstrated that the earmarking of [revenue from] the charge in 
question impairs access to the market for ‘foreign works’ by impeding intra-
Community trade, given that, in order for there to be a restriction of the freedom 
to provide services, the earmarking of [revenue from] the fee concerned would 
have to be capable, where appropriate, of significantly impairing or discouraging 
the provision of cross-border services relating to ‘foreign works’. There is 
therefore no restriction on the free movement of services relating to European 
works that would be capable of precluding, hindering or rendering less attractive 
the activities of such service providers established in other Member States. 
15 Furthermore, in so far as it is directed at services provided in national territory by 
operators of subscription television services, the contested fee does not objectively 
affect any ‘foreign productions’ or any providers of services connected with the 
production of European cinematographic and audiovisual content. 
16 According to the appellant, other Member States, in particular Germany, France, 
Poland and the Czech Republic, charge fees for subscription television services 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-411/21 
 
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which are similar to that at issue in the main proceedings. However, the judgment 
under appeal declared the support granted to the national cinematographic and 
audiovisual industry to be unlawful, completely disregarding the support measures 
from which those activities benefit in most Member States. 
17 Furthermore, in 2008, the European Commission approved several film support 
schemes, including the Hungarian support scheme for the film industry, a scheme 
of tax incentives for film production in Italy and the support schemes for 
filmmaking in Finland and Germany. In this sense, there is a real incentive in the 
European Union for Member States to engage in audiovisual production which 
contributes towards the diversity and richness of European culture. 
18 Moreover, according to the appellant, the judgment under appeal should have 
analysed whether the support for film and audiovisual production in question 
constitutes a State aid measure within the meaning of Article 107 TFEU. If that 
support does indeed constitute State aid, it is important to take into account the 
fact that the European Commission and the Court of Justice in its case-law do not 
rule out aid schemes for film and television production which are financed from 
parafiscal charges, and that there is a specific possibility of derogation from the 
general principle of incompatibility in the case of aid granted by Member States to 
promote culture, provided that this does not affect trading conditions and 
competition in the European Union in a manner contrary to the common interest. 
19 In addition, the appellant states, in so far as concerns any potential obligation to 
notify the Commission and obtain the corresponding authorisation, that it follows 
from Commission Regulation (EU) No 651/2014 of 16 June 2014 that aid for 
culture and heritage conservation is compatible with the internal market and is not 
subject to any obligation to give prior notice to the Commission. 
20 The respondent submits that Article 3 of Law No 55/2012 bears out the finding 
that the support granted by the appellant to its beneficiaries has the ultimate 
purpose of promoting national cinematographic and audiovisual works, the 
Portuguese language and national identity. For that reason, by financing activities 
that will benefit only national service providers, the subscription fee constitutes a 
restriction on the freedom to provide services in the European Union, since it 
favours the purchase of Portuguese film and audiovisual works to the detriment of 
those from other Member States. 
21 Thus, according to the respondent, the subscription fee indirectly discriminates 
against operators of subscription television services that include foreign film and 
audiovisual works in their offer while remaining subject to the obligation to 
finance Portuguese production, just as it discriminates against homegrown film 
and audiovisual production in the other Member States. 
22 Furthermore, the respondent submits, the aforementioned restriction is not 
justified on grounds of public policy, public health or public security or on any 
other legitimate grounds relating to the configuration and protection of the 
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national tax system, in particular those relating to the coherence of the tax system, 
the need to preserve a fair distribution of tax sovereignty between States or the 
combating of tax evasion. 
23 As regards proportionality, the respondent states that the fee at issue is not an 
appropriate instrument for attaining the objective pursued and that there are other 
measures available which are less harmful to the freedom to provide services and 
the cross-border trade in film works and audiovisual content. Furthermore, the 
subscription fee is also disproportionate in the strict sense, since it greatly exceeds 
the potential benefits of national film and audiovisual activity. Those benefits 
would be exactly the same if the funds were raised from general taxation, without 
imposing a selective charge on operators of subscription television services. 
24 The respondent further submits that the similar schemes in other Member States 
cannot be compared with the one at issue in the main proceedings, whether from 
the point of view of the nature of the fee, the basis of its assessment or even the 
method by which it is calculated. 
25 Lastly, the respondent contends, in concluding the grounds of its appeal by relying 
on the rules on State aid, the appellant recognises that the national legislation does 
indeed seek to favour national cinematographic and audiovisual activities. 
Brief presentation of the grounds for the request for a preliminary ruling 
26 In the first place, the referring court seeks clarification as to whether, in this case, 
there are cross-border factors which justify the respondent’s right, in the light of 
the activities which it pursues, to rely on the provisions of the TFEU relating to 
the freedom to provide services. 
27 If the answer is in the affirmative, it is necessary to determine, first, whether the 
contested fee is in itself incompatible with EU law and, secondly, whether that 
incompatibility must be examined from the point of view of the earmarking of the 
revenue from subscription fee for promoting and protecting the art of film and 
national cinematographic and audiovisual activities.  
28 From the decision of the TAF, Almada, with which the referring court agrees, it is 
apparent that the former court found that the earmarking of the revenue from the 
subscription fee reduces the cost of national production by comparison with 
foreign production and thus gives rise to indirect discrimination against the cross-
border provision of those services, since that revenue is exclusively intended to 
finance the promotion and dissemination of Portuguese works.  
29 In that decision, reproduced in part by the referring court, the lower court pointed 
out that television operators finance the producers of such works by means of a 
transfer of private resources. Since the subscription fee is payable irrespective of 
the profits made by operators, its autonomous nature vis-à-vis the exhibition fee is 
explained by the business model employed by those operators. 
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30 Given that the services provided by those operators are obtained by subscription, 
such television channels often choose not to exhibit commercial advertising, with 
the result that the exhibition fee also provided for in Law No 55/2012 does not 
apply to them. Thus, whereas the exhibition fee is calculated on an ad valorem 
basis, the subscription fee relates only to the number of subscribers each operator 
has. 
31 It follows that the taxable basis of the subscription fee is completely unrelated to 
the actual benefit from the national film and audiovisual production which that fee 
is intended to finance. The actual benefit of national content is not called into 
question, and not even operators that market foreign television services, whether 
on a principal or exclusive basis, are excluded from payment. The fee is based on 
the principle that operators benefit to a greater or lesser extent from content which 
is produced nationally and which the State subsidises.  
32 The referring court also refers, from a teleological point of view, to the 
explanatory memorandum to Proposta de Lei n.º 69/XII (Draft Law No 69/XII), 
which gave rise to Law No 55/2012, which provides that the purpose of the fee in 
question is to establish for the Portuguese film and audiovisual industry a support 
scheme with a robust revenue basis. 
33 In so far as the answers to the question referred are not obvious and there are 
serious doubts as to whether the interpretation of Article 10(2) of Law 55/2012 
infringes Article 56 TFEU, the Supremo Tribunal Administrativo (Supreme 
Administrative Court) has decided to make a request for a preliminary ruling to 
the CJEU.