Judgment — ECLI:EU:T:1998:177
Date: 1998-07-16
Language of the case: English
Court formation: Third Chamber, Extended Composition
Based on: Merger Treaty (1965)
Subject matter: Staff regulations and employment conditions - EC
Concepts: Privileges and immunities;Tax on salaries;Scope
Procedure: Staff cases - successful

summary of the pleas in law on which the application is based‘, imposed by Article 44(1)(c) of the Rules of Procedure. 43. The applicants, however, consider that they have adequately set out the reasons why they consider that the Commission wrongly applied Article 8 of the framework agreements to them. 44. The Court considers that the applicants have clearly asserted, referring to the relevant provisions of Community law, that the Commission had no power to withhold the tax in issue. 45. In those circumstances, the pleas of inadmissibility alleging breach of the Rules of Procedure must be rejected. The plea of inadmissibility alleging acquiescence of the applicants in the levying of the Community tax 46. The Commission states that the applicants had accepted that they were liable to Community tax since 1989 and now seek repayment of that tax after having waited several years before bringing their action. 47. This plea must be considered with the substance of the case, of which it is an integral part. Substance Arguments of the parties 48. The applicants, supported in substance by the intervener in Case T-204/96, point out that, on the basis of Article 13 of the Protocol, the Council laid down the conditions and detailed rules for applying the Community tax to the remunerations paid by the Communities to their officials and other servants in Regulation (EEC, Euratom, ECSC) No 260/68 of 29 February 1968 laying down the conditions and procedure for applying the tax for the benefit of the European Communities (OJ 1968 L 56, p. 8). 49. Since freelance interpreters are neither officials of the Communities nor other servants within the meaning of the Conditions of Employment, the Commission committed a manifest error in law in deducting the Community tax from their remuneration, in reliance on Article 8 of the framework agreements, when those agreements were concluded with an international association governed by private law and are themselves governed by civil law. 50. The Commission contends that the basis on which freelance interpreters are liable to Community tax is contractual, so that, by reason of the principle pacta sunt servanda, the applicants may not challenge the lawfulness of their contracts in the absence of any fraud, mistake, duress or similar defect. The Commission considers, moreover, that Article 8 of the framework agreements cannot be severed from its other provisions. Findings of the Court 51. The first paragraph of Article 13 of the Protocol established a tax for the benefit of the Communities on the remuneration paid to officials and other servants by the Communities. 52. On the basis of that provision, Article 2 of Council Regulation No 260/68 stipulated that persons coming under the Staff Regulations or the Conditions of Employment, with the exception of local staff, were to be liable to that Community tax. 53. Since, as freelance interpreters, the applicants cannot be considered either as officials or as servants within the meaning of the Conditions of Employment, the Commission could not lawfully levy Community tax on the remuneration which it has paid to them since 1 January 1989. 54. Moreover, it is clear from the scheme of Article 13 of the Protocol that the liability, under the first paragraph, of officials and other servants of the Communities to Community tax on remuneration paid to them by the Communities necessarily has the corollary, expressed in the second paragraph, of exempting those concerned from national taxes on those same amounts. 55. That principle is stated more specifically in Article 2(a) of Regulation (Euratom, ECSC, EEC) No 549/69 of the Council of 25 March 1969 determining the categories of officials and other servants of the European Communities to whom certain provisions of the Protocol apply (OJ 1969 L 74, p. 1), as subsequently amended, according to which the provisions of the second paragraph of Article 13 of the Protocol apply, save for local staff, only to persons coming under the Staff Regulations or the Conditions of Employment. 56. It follows that the remuneration paid by the Commission to the applicants falls under the tax jurisdiction of the Member States. 57. Thus the Commission, by levying the Community tax at issue, also failed to take account of the tax jurisdiction retained by the Member States. 58. The applicants' claims for repayment must therefore be upheld, without there being any need to consider the pleas of inadmissibility which the Commission has based on the applicants' alleged consent to the Community tax being levied and on the non-severability of the provisions of the framework agreements (see paragraph 50 above). Neither the will of the parties nor the balance in the structure of an agreement may validly be invoked in order to secure the performance or continued performance of unlawful obligations. 59. It follows from the foregoing that the Commission must be ordered to repay to the applicants the sums referred to as Community tax which it has unlawfully levied on their remuneration paid since 1 January 1989, together with interest at the statutory rate applicable in Belgium, to run from the date of the first application for repayment submitted by each of the applicants respectively (see paragraph 13 above) until payment is actually made. Costs 60. Under Article 87(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs, if they have been asked for in the successful party's pleadings. Since the Commission has been unsuccessful, it must be ordered to pay the costs in accordance with the form of order sought by the applicant. 61. The Federal Republic of Germany, which has intervened in Case T-204/96, must bear its own costs pursuant to the first subparagraph of Article 87(4) of the Rules of Procedure. On those grounds, THE COURT OF FIRST INSTANCE (Third Chamber, Extended Composition) hereby: 1. Orders the Commission to repay to the applicants the sums referred to as Community tax which it has unlawfully levied on their remuneration paid since 1 January 1989, together with interest at the statutory rate applicable in Belgium, to run from the date of the first application for repayment submitted by each of the applicants respectively until payment is actually made; 2. Dismisses the remainder of the applicants' claims; 3. Orders the Commission to pay the costs; 4. Orders the Federal Republic of Germany to pay its own costs. Tiili Briët Lenaerts Potocki Cooke Delivered in open court in Luxembourg on 16 July 1998. H. Jung V. Tiili Registrar President 1: Language of the case: English.