62023CJ0432_RES
Case C‑432/23
F SCSandOrdre des avocats du barreau de Luxembourg
v
Administration des contributions directes
(Reference for a preliminary ruling from the Cour administrative)
Judgment of the Court (Second Chamber) of 26 September 2024
(Reference for a preliminary ruling – Administrative cooperation in the field of taxation – Directive 2011/16/EU – Exchange of information on request – Decision ordering a lawyer to communicate information – Legal professional privilege – Article 7 and Article 52(1) of the Charter of Fundamental Rights of the European Union)
Fundamental rights – Respect for private and family life – Affirmed both by the Charter of Fundamental Rights and by the European Convention on Human Rights – Level of protection provided for by the Charter not infringing that guaranteed by that convention
(Charter of Fundamental Rights of the European Union, Arts 7 and 52(3))
(see paragraphs 47, 48)
Fundamental rights – Respect for private and family life – Article 7 of the Charter of Fundamental Rights – Scope – Advice from a lawyer on matters of company law – Included – Decisions ordering lawyers to communicate all documentation and information relating to their relations with their clients – Interference with the right to respect for communications between lawyers and their clients
(Charter of Fundamental Rights of the European Union, Art. 7; Council Directive 2011/16)
(see paragraphs 49-52, operative part 1)
Approximation of laws – Administrative cooperation in the field of taxation – Directive 2011/16 – Exchange of information on request – Scope – Absence of provisions relating to the protection of the confidentiality of communications between lawyers and their clients – Infringement of respect for private and family life – Absence
(Charter of Fundamental Rights of the European Union, Arts 7 and 52(1) and (2); Council Directive 2011/16)
(see paragraphs 59-61, operative part 2)
Approximation of laws – Administrative cooperation in the field of taxation – Directive 2011/16 – Exchange of information on request – Obligations on lawyers to provide information and cooperate – National rules excluding the content of advice in tax matters from legal professional privilege – Decisions ordering lawyers to communicate all documentation and information relating to their relations with their clients – Not permissible – Undermining of the essence of the right to respect for communications between lawyers and their clients
(Charter of Fundamental Rights of the European Union, Arts 7 and 52(1); Council Directive 2011/16)
(see paragraphs 67, 70-74, operative part 3)
Résumé
On a reference for a preliminary ruling, the Court of Justice has ruled that a decision ordering a lawyer to provide the authorities with all documentation and information relating to that lawyer’s relationship with his or her client in connection with advice on company law infringes the fundamental right to respect for communications between lawyers and their clients.
In 2022, following a request from the Spanish tax authorities based on Directive 2011/16, (
1
) the administration des contributions directes (Luxembourg Inland Revenue) sent F SCS, a law firm incorporated as a limited partnership in Luxembourg, decisions requiring that undertaking to provide all available documents and information concerning the services it provided to K, a company incorporated under Spanish law, in connection with the acquisition of a business and a majority shareholding in a company. F replied that it did not have any information not covered by legal professional privilege. It also stated that the instruction from its client in the case to which the decision relates did not cover tax matters but concerned only company law. (
2
) The tax authorities imposed a fine on F for failing to comply with the most recent decision. F subsequently brought an action for annulment of that decision.
On appeal from the judgment of the tribunal administratif (Administrative Court, Luxembourg) dismissing F’s action as inadmissible, the Cour administrative (Higher Administrative Court, Luxembourg) decided to refer certain questions to the Court of Justice for a preliminary ruling concerning, first, the applicability of Article 7 of the Charter of Fundamental Rights of the European Union (‘the Charter’) to legal advice given by a lawyer in company law matters, second, the validity of Directive 2011/16 in the light of Article 7 and Article 52(1) of the Charter, having regard to the absence of provisions relating to the protection of the confidentiality of communications between lawyers and their clients and, third, the compatibility of a decision such as that issued to F (‘the decision at issue’) with Article 7 and Article 52(1) of the Charter.
Findings of the Court
First, as regards the scope of the strengthened protection guaranteed by Article 7 of the Charter, the Court notes that, like Article 8(1) of the Convention for the Protection of Human Rights and Fundamental Freedoms, (
3
) Article 7 of the Charter also guarantees the confidentiality of legal advice, both as regards its content and its existence. The specific protection afforded by those two articles to legal professional privilege is justified by the fact that lawyers are assigned a fundamental role in a democratic society, that of defending litigants. That fundamental task entails, on the one hand, the requirement that any person must be able, without constraint, to consult a lawyer and, on the other, the correlative duty of the lawyer to act in good faith towards his or her client. It follows that, whatever the area of law to which it relates, legal advice given by a lawyer enjoys the strengthened protection guaranteed by Article 7 of the Charter to communications between lawyers and their clients. Thus, a decision ordering a lawyer to provide the authorities with all documentation and information relating to that lawyer’s relationship with his or her client in connection with advice on company law constitutes an interference with the right to respect for communications between lawyers and their clients guaranteed by that article.
Second, as regards the validity of Directive 2011/16 in the light of Article 7 and Article 52(1) of the Charter, the Court observes that, for the purposes of the exchange of information on request provided for by Directive 2011/16, (
4
) the EU legislature has merely determined the obligations that the Member States have towards each other, while authorising them not to comply with a request for information if carrying out the investigations requested or gathering the information in question would be contrary to their legislation. Thus, the EU legislature has, inter alia, left it to the Member States to ensure that their national procedures for gathering information for the purposes of that exchange comply with the Charter, and in particular Article 7 thereof. It follows that the fact that the system for exchange of information on request established by Directive 2011/16 does not include provisions relating to the protection of the confidentiality of communications between lawyers and their clients – in the context of the information gathering that is the responsibility of the requested Member State – does not mean that that directive infringes Article 7 and Article 52(1) of the Charter.
Finally, third, as regards the compatibility of a decision such as that at issue in the main proceedings with Article 7 and Article 52(1) of the Charter, the Court points out that Article 7 of the Charter guarantees the confidentiality of legal advice given by a lawyer, as regards both its existence and content. Thus, people who consult lawyers can reasonably expect their communications to remain private and confidential and, apart from exceptional situations, have confidence in the fact that their lawyers will not disclose the fact that they are consulting them to anyone without their agreement. That said, the rights enshrined in Article 7 of the Charter do not appear to be absolute rights, but must be considered in relation to their function in society. Indeed, as can be seen from Article 52(1) of the Charter, that provision allows limitations to be placed on the exercise of those rights, provided that those limitations respect the essence of those rights.
In this case, the decision at issue is based on national legislation under which advice and representation by a lawyer in tax matters do not enjoy – except where there is a risk of criminal prosecution against the client – the strengthened protection of communications between lawyers and their clients guaranteed by Article 7 of the Charter. By excluding the content of advice given by lawyers in tax matters – and thus an entire branch of law in which lawyers are likely to advise their clients – almost entirely from that protection, that legislation renders that protection devoid of its very substance in that branch of law. As for the decision at issue, which concerns an entire file not related to tax matters, it further extends the scope of the infringement of the substance of the right protected by Article 7 of the Charter. In those circumstances, it must be held that such national legislation – and its application in the present case by means of the decision at issue – far from being confined to exceptional situations, infringes the essence of the right guaranteed by Article 7 of the Charter by reason of the very extent of the derogation from legal professional privilege that it authorises in respect of communications between lawyers and their clients. It follows that a decision such as that at issue in the main proceedings undermines the essence of the right to respect for communications between lawyers and their clients, and therefore constitutes an interference with that right that cannot be justified.
(
1
)	Council Directive 2011/16/EU of 15 February 2011 on administrative cooperation in the field of taxation and repealing Directive 77/799/EEC (OJ 2011 L 64, p. 1).
(
2
)	Article 177(2) of the loi générale des impôts du 22 mai 1931 (General Tax Law of 22 May 1931) (Mémorial A 1931, No 900) prohibits a lawyer who is the subject of a request for disclosure of information to the authorities from refusing access to information entrusted to him or her in the exercise of his or her profession in so far as it concerns facts of which that lawyer has become aware in the course of providing advice or representation in tax matters and unless it concerns questions where the answers would expose his or her client to the risk of criminal proceedings.
(
3
)	Signed in Rome on 4 November 1950.
(
4
)	Section I of Chapter II of Directive 2011/16.