OPINION OF ADVOCATE GENERAL

MENGOZZI

delivered on 31 January 2018 ( 1 )

Case C‑39/17

Lubrizol France SAS

v

Caisse nationale du Régime social des indépendants (RSI) participations extérieures

(Request for a preliminary ruling

from the Court de cassation (Court of Cassation, France))

(Reference for a preliminary ruling — Free movement of goods — Articles 28 and 30 TFEU — Charge having equivalent effect — Article 110 TFEU — Internal taxation — Social solidarity contribution payable by companies and additional contribution — Charge levied on the basis of a company’s overall annual turnover — Inclusion in the turnover of the value of goods transferred to another Member State)

1. The question referred for a preliminary ruling invites elucidation from the Court regarding two social contributions provided for under French legislation, namely the social solidarity contribution (‘C3S’), which was introduced in the early 1970s, and the additional contribution, which was created by the national legislature in 2004. The basis of assessment of these contributions is the overall annual turnover of the companies and undertakings subject to the contributions.

2. On this occasion, the Court must rule on the compatibility with the prohibition on charges having an effect equivalent to customs duties of recent case-law of the referring court, according to which the nominal value of stock transferred by an undertaking from France to another Member State of the European Union is included in the basis of assessment for C3S and the additional contribution, even if that transfer of itself does not generate turnover.

I. Legal framework

A. EU law

3. Article 28(1) TFEU states: ‘The Union shall comprise a customs union which shall cover all trade in goods and which shall involve the prohibition between Member States of customs duties on imports and exports and of all charges having equivalent effect, and the adoption of a common customs tariff in their relations with third countries’. Article 30 TFEU provides that: ‘Customs duties on imports and exports and charges having equivalent effect shall be prohibited between Member States. This prohibition shall also apply to customs duties of a fiscal nature.’

4. Article 110(1) TFEU states: ‘No Member State shall impose, directly or indirectly, on the products of other Member States any internal taxation of any kind in excess of that imposed directly or indirectly on similar domestic products.’

5. Article 14(1) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax (the ‘VAT Directive’) ( 2 ) provides that ‘“Supply of goods” shall mean the transfer of the right to dispose of tangible property as owner’.

6. Article 17 of the same Directive states that: ‘The transfer by a taxable person of goods forming part of his business assets to another Member State shall be treated as a supply of goods for consideration’ and also defines ‘transfer to another Member State’ as ‘the dispatch or transport of movable tangible property by or on behalf of the taxable person, for the purposes of his business, to a destination outside the territory of the Member State in which the property is located, but within the Community’.

7. With regard to the supply of goods consisting in transfer to another Member State, Article 76 of the VAT Directive states that ‘the taxable amount shall be the purchase price of the goods or of similar goods or, in the absence of a purchase price, the cost price, determined at the time the transfer takes place’.

B. National law and case-law

8. Article L. 651-1 of the Code de la sécurité sociale (Social Security Code) provides for payment to the Régime social des Indépendants (Social Security Scheme for Self-Employed Workers, the ‘RSI’), the Fonds de solidarité vieillesse (Old-Age Solidarity Fund) and the Fonds de réserve pour les retraites (Pensions Reserve Fund) of a social solidarity contribution by, among others, public limited companies and simplified joint stock companies. The C3S is payable annually and the rate is determined, up to a maximum of 0.13% of turnover.

9. An additional contribution payable by such companies to the Caisse nationale de l’assurance maladie des travailleurs salariés (National Sickness Insurance Fund for Employees) is also provided for by Article L. 245-13 of the Social Security Code. This additional contribution is determined, collected, payable and audited subject to the same conditions as those applicable to the C3S, and is charged at 0.03% of turnover.

10. Under Article L. 651-5 of the Social Security Code, companies and undertakings subject to the C3S must notify annually the body responsible for collecting the contribution, the Caisse nationale du RSI (National Fund coordinating the RSI, the ‘CNRSI’), of ‘the amount of their overall turnover declared to the tax authorities, which shall be calculated excluding taxes on turnover and similar charges’.

11. The Cour de cassation (Court of Cassation, France) indicated in the Organic v Cofiroute judgment ( 3 ) that this amount is the one that appears in the monthly or quarterly declaration No 3310 CA3 for value added tax and similar charges (the ‘VAT declaration’).

12. Consequently, it is calculated by adding together the amounts in columns 1 (Sales, provision of services), 4 (Exports outside the European Union), 5 (Other non-taxable transactions) and 6 (Intra-Community supplies), as well as the amounts in column 2 (Other taxable transactions) where these are transactions that generate turnover.

13. As regards intra-Community supplies, under Article 256(III) of the code général des impôts (General Tax Code), which transposes Article 17 of the VAT Directive, to the transfer by a taxable person of goods forming part of his business assets to another Member State as treated as a supply of goods.

14. The nominal value of the transferred goods (the purchase price, or in the absence of a purchase price, the cost price) therefore forms part of the total in column 6 (Intra-Community supplies) of the VAT declaration and is thus included in the basis of assessment the C3S and the additional contribution, as confirmed on several occasions by the Cour de cassation (Court of Cassation). ( 4 )

II. Facts, national proceedings, questions referred for a preliminary ruling and procedure before the Court

15. The preliminary ruling is requested by the national court in the context of a dispute between the company Lubrizol France SAS (‘Lubrizol’) and the CNRSI concerning the calculation of the basis of assessment for the C3S and the additional contribution.

16. Lubrizol, the main overseas subsidiary of the group The Lubrizol Corporation, is a company in the chemical sector that manufactures and sells additives for lubricants.

17. As a simplified joint stock company (société par action simplifiée under French law), it is legally obliged to pay C3S in accordance with Articles L. 651-1 et seq. of the French Social Security Code and the additional contribution in accordance with Article L. 245‑13 of the same code.

18. Following verification of the basis of assessment for the C3S and the additional contribution payable by Lubrizol for the year 2008, the CNRSI noted a discrepancy between the turnover for 2007 declared to the fund (EUR 573152820) and the turnover declared to the tax authority (EUR 642045281). This discrepancy was due to the fact that Lubrizol had not included its total intra-Community transfers in column 6 (Intra-Community supplies) of the VAT declaration.

19. In the light of this, the CNRSI issued the company with a revised assessment, followed by a letter of formal notice on 13 March 2012.

20. Lubrizol challenged the assertion that it owed the sums claimed before the Tribunal des Affaires de Sécurité Sociale de Rouen (Social Security Tribunal, Rouen, France), arguing that the CNRSI had been incorrect to include the value of stock transferred to other Member States of the European Union in the basis of assessment for the C3S and the additional contribution. Lubrizol pointed out that the transfers in question did not involve a sale and therefore did not generate turnover, so they did not form part of the taxable amount of the contributions in question.

21. In its judgment of 6 May 2014, the Rouen tribunal rejected Lubrizol’s appeal on the ground that a company’s turnover does not depend on accounting or tax considerations, but on the amount that the company actually declares to the tax authority. That amount must include intra-Community transfers of goods because, under national VAT legislation, they are treated as intra-Community supplies of goods. That court also maintained that the rules on the determination of the basis of assessment for the C3S and the additional contribution did not infringe the principle of free movement of goods in the European Union since those contributions were based on a company’s’ overall economic activity, and not on products as such.

22. The judgment was subsequently confirmed by the Cour d’appel de Rouen, chambre de l’urgence et de la sécurité sociale (Court of Appeal, Chamber for urgent and social security matters, Rouen, France) on 15 September 2015. In particular, the Court of Appeal rejected the plea alleging infringement of the principle of the free movement of goods, stating that the contributions in question, on the one hand, had ‘the nature of a social contribution’ and, on the other were not levied on the products themselves but charged to undertakings on the basis of their overall turnover.

23. Lubrizol brought a further appeal before the referring court against the judgment of the Cour d’appel de Rouen (Court of Appeal, Rouen), arguing that the contributions in question should be regarded as charges having equivalent effect within the meaning of Article 30 TFEU, because transfers of stock that do not generate turnover are included in the basis of assessment for the contributions only when the stock is transferred to another Member State; domestic transfers or transfers to a non-Member State of the European Union are not included.

24. The referring court recalls that it has ruled in the past, in certain cases with a similar factual background to the present one, that the representative value of the stock transferred by an undertaking from France to another Member State of the European Union forms part of the basis of assessment for the C3S and the additional contribution even when the transfer does not of itself generate turnover. ( 5 ) Since this question concerns contributions that have recently become permanent, the referring court considers it essential, in view of the criticism expressed in Lubrizol’s appeal, to make sure that it is compatible with the requirements of European Union law.

25. On those grounds, the court has decided to stay the main proceedings and to refer the following question to the Court for a preliminary ruling: ‘Is it contrary to Articles 28 and 30 of the Treaty on the Functioning of the European Union for the value of goods transferred from France to another Member State of the European Union by or on behalf of a taxable entity subject to the social solidarity contribution payable by companies and to the contribution additional to the latter, for the purposes of its business, to be taken into account in determining the overall turnover that constitutes the basis of assessment for those contributions?’

26. On this question, written observations have been submitted by Lubrizol France, the CNRSI, the French Government, the Dutch Government and the European Commission.

27. At the hearing on 15 November 2017, oral arguments were presented by Lubrizol France, the French Government and the European Commission.

III. Legal analysis

28. The response, in my view, requires correct delimitation of the precise subject matter of the question submitted by the referring court for a preliminary ruling. On this point, which seems to me to be of the utmost importance, the written observations submitted by the interested parties draw opposing conclusions. I therefore consider that the legal analysis should start with a few preliminary considerations clarifying that and assisting the subject matter of the interpretation requested of the Court.

29. These considerations will lead me to conclude that the subject matter of the question is not in fact a verification of whether of the basis of assessment for the C3S and the additional contribution as a whole is compatible with Articles 28 and 30 TFEU. On the contrary, as is reflected in the very wording of the order for reference itself, it is the novelty of the inclusion of the nominal value of intra-Community transfers of goods in that basis of assessment that seems to have prompted the referring court to submit the present question to the Court (sub A).

30. Assuming that this is correct and moving on to the analysis of the substance, I conclude first of all that the contributions in question must be regarded as being levied on the movement of goods in that they are charged on intra-Community transfers of goods, and therefore fall within the scope of Articles 28 and 30 TFEU. Following on from that, I will examine whether the inclusion of intra-Community transfers in the basis of assessment for these contributions, may have the effect of infringing the prohibition on charges having an effect equivalent to customs duties laid down by those Treaty provisions, and shall conclude that they do (sub B).

31. In the alternative, should the Court consider, contrary to my belief, that the subject matter of the question referred for a preliminary ruling is the basis of assessment to the disputed contributions as a whole, I would observe that, in the present case, those contributions should be regarded as ‘internal taxation’ within the meaning of Article 110 TFEU. On the basis of this premiss, I will conclude that the C3S and the additional contribution do not, in their present configuration, infringe that provision. On the other hand, in two specific cases they may be caught by the prohibition on charges having equivalent effect (sub C). It is for the referring court to ascertain whether these cases in fact apply.

A. Subject matter of the question referred

32. On the basis of the order for reference, the matter in respect of which the referring court seeks a ruling as regards compatibility with Articles 28 and 30 TFEU is the inclusion in the basis of assessment for the C3S and the additional contribution or, in other words, in the overall annual turnover of taxable parties required to pay those contributions, of the nominal value of intra-Community transfers of goods.

33. The referring court therefore indicates that the doubts concerning compatibility with those Treaty provisions concern solely the inclusion of a specific amount in the basis of assessment for the C3S and the additional contribution, not the basis of assessment as a whole.

34. This may be inferred not only from the express wording of the question referred for a preliminary ruling but also, and above all, from the fact that inclusion of the nominal value of intra-Community transfers of goods in the basis of assessment for the contributions in question is a new development in the national legal system.

35. In particular, the question is the result of the combined effect of a legislative development and a subsequent interpretation provided by the referring court. From a legislative point of view, the treatment of the supply of goods for consideration as an intra-Community transfer of goods, introduced by Article 28a of Council Directive 91/680/EEC of 16 December 1991 supplementing the common system of value added tax and amending Directive 77/388/EEC with a view to the abolition of fiscal frontiers, ( 6 ) was transposed into French law by Article 1 of Law No 92/677. ( 7 ) From that point onwards, the nominal value of intra-Community transfers of goods was included in overall turnover for VAT purposes.

36. Following this, national case-law established that it was the overall turnover in the VAT declaration, including the nominal value of intra-Community transfers, that must be taken into account in calculating the basis of assessment for the C3S. ( 8 ) The Cour de cassation (Court of Cassation) therefore concluded on two separate occasions that the nominal value of intra-Community transfers of goods is to be included in the amount, even if those transfers do not of themselves generate turnover. ( 9 )

37. It seems quite clear to me that it is the compatibility of this case-law with Articles 28 and 30 TFEU that the referring court wishes to verify. In other words, that court’s doubts hinge on whether the inclusion of the nominal value of intra-Community transfers in the basis of assessment for the C3S and the additional contribution, rather than the basis of assessment as a whole, amounts to a ‘charge having equivalent effect’ to a customs duty.

38. The reference to the Rousseau Wilmot judgment (295/84, EU:C:1985:473), ( 10 ) in the written observations submitted by the Commission during the proceedings and resubmitted by it at the hearing, merely confirms the above conclusion.

39. In the Rousseau Wilmot judgment, the Court ruled on the compatibility of the C3S with the prohibition on introducing or maintaining turnover taxes laid down by Article 33 of Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes — Common system of value added tax: uniform basis of assessment. ( 11 ) In support of the conclusion that the C3S cannot be characterised as a turnover tax, the Court remarked that the basis for the C3S is the activity of undertakings calculated on the basis of the total annual turnover, which therefore does not directly affect the price of goods or services. ( 12 ) The Commission concludes from this that, because the contribution in question could not be considered to be levied on the goods as such, it does not fall within the prohibition on charges having equivalent effect laid down by Articles 28 and 30 TFEU. According to the Commission, the same conclusion should be reached for the additional contribution, since it has the same basis of assessment as the C3S.

40. Clearly, then, this judgment is not relevant to the case of concern to us since, unlike the basis of assessment in question, the basis of assessment for which the Court gave a legal appraisal did not include the nominal value of intra-Community transfers of goods.

41. That value could not have been considered to be included in the basis of assessment for the C3S prior to the Cour de cassations (Court of Cassation) judgment in Organic v Cofiroute, which clarified that the overall turnover relevant for calculating that basis of assessment was the turnover entered on the VAT declaration, which does in fact include intra-Community transfers for the purpose of Article 256(III) of the General Tax Code.

42. Given that the judgment of the Court Rousseau Wilmot dates back to 1987 and therefore predates Organic v Cofiroute by some eight years, it must be concluded that the basis of assessment for the C3S examined by the Court in Rousseau Wilmot did not include the nominal value of intra-Community transfers of goods.

43. For that reason it would have been impossible for the referring court to conclude from the findings of the Rousseau Wilmot judgment that Articles 28 and 30 TFEU do not apply to the basis of assessment for the C3S (and the additional contribution). That judgment ruled on the nature of the C3S at a time when the nominal value of intra-Community transfers of goods was not included in the basis of assessment for that contribution.

44. Consequently, the referring court asks whether the inclusion of the nominal value of intra-Community transfers of goods in the basis assessment renders Articles 28 and 30 TFEU applicable to the contributions in question, and, potentially, constitutes an infringement of those provisions.

45. In the light of the above considerations, I suggest that the Court refrain from reformulating the question referred, because such a reformulation could, in my opinion, significantly alter the subject matter of that question as delimited by the referring court’s interpretation.

46. I would also observe that settled case-law has consistently made clear that, when concerning to questions referred to it, the Court must rely on the interpretation provided by the referring court of the provisions of national law at issue, and is not entitled to question or verify the correctness of that interpretation. ( 13 )

B. The compatibility of the inclusion of intra-Community transfers of goods in the basis of assessment for the C3S and the additional contribution with Articles 28 and 30 TFEU

47. First, it should be noted that, in setting rules for the operation of the customs union, Articles 28 and 30 TFEU prohibit the levying of customs duties and of all charges having equivalent effect in trade between Member States.

48. Those prohibitions, which constitute fundamental rules from which any exception must be expressly provided for and restrictively interpreted, are designed to ensure the free movement of goods within the European Union. ( 14 )

49. As to the applicability of those prohibitions in the case in question, it must be acknowledged that doubts may arise on account of the sui generis nature of the C3S and the additional contribution. On the one hand, as the Commission argued forcibly during the hearing, the fact that the basis of assessment for these contributions is the overall turnover of the companies and undertakings required to pay them appears, prima facie, to set them apart from the type of taxes that, being levied on goods as such, fall within the scope of Articles 28 and 30 TFEU. On the other hand, the inclusion in the basis of assessment of the nominal value of intra-Community transfers of goods or, in other words, transactions which of themselves do not generate turnover, makes the contributions in question more akin, though only in respect of that component of the basis of assessment, to taxes which, as they are charged on individual commercial transations for the simple reason that they have taken place, are levied on the movement of goods for the purpose of Articles 28 and 30 TFEU.

50. As explained in paragraphs 32 to 46 of this Opinion, the subject matter of the question referred for a preliminary ruling is, however, limited to the intra-Community transfers of goods component. It therefore seems reasonable to conclude that such transfers fall within the scope ratione materiae of Articles 28 and 30 TFEU.

51. As stated above, the Commission strongly disagreed with that conclusion during the hearing. According to the Commission, regardless of the stance adopted by the Court on the effect of the contributions at issue on the movement of goods, Articles 28 and 30 TFEU are not applicable. Indeed, if the Court were to consider that the C3S and the additional contribution have an impact on the movement of goods, according to the Commission they should be examined as ‘internal taxation’ in the light of Article 110 TFEU. However, if they were found to have no impact, as the Commission maintains, they would presumably fall within the scope of the prohibition on ‘measures having equivalent effect [to quantitative restrictions on exports]’ provided for by Article 35 TFEU. ( 15 )

52. A few observations should therefore be made to ascertain whether any of the provisions mentioned by the Commission are applicable in the case in question rather than Articles 28 and 30 TFEU.

53. As to Article 110 TFEU, it provides that Member States are prohibited from applying higher taxes to imported products than those applied than to similar domestic products.

54. This prohibition on discriminatory internal taxation cannot be applied at the same time as with the prohibition on charges having equivalent effect. Consequently, under the scheme of the Treaty, the same measure cannot belong to both categories at the same time. ( 16 )

55. The distinction between the two categories, according to settled case-law, is that internal taxation is levied solely on products that cross the border, whereas charges having equivalent effect are levied on both imported or exported products and domestic products. ( 17 )

56. In that regard, given that the appraisal requested by the referring court concerns solely the transfer of goods as a specific commercial transaction unrelated to whether the goods may in future be sold, it should be noted that the C3S and the additional contribution are levied only on intra-Community transfers under French law, ( 18 ) whereas domestic transfers are exempt.

57. It therefore follows that Article 110 TFEU cannot be applied in the present case.

58. The same negative conclusion holds in relation to the applicability of Article 35 TFEU.

59. That provision prohibits quantitative restrictions on exports and any measures having equivalent effect between Member States, in parallel with the similar prohibition laid down by Article 34 TFEU in respect of imports.

60. In relation to Article 34 TFEU, case-law has unequivocally clarified that the prohibition on measures having equivalent effect to quantitative restrictions on imports constitutes a lex generalis with respect to other specific provisions of the Treaty, especially those concerning charges having equivalent effect. Consequently, Article 34 TFEU applies as an alternative to those provisions. ( 19 ) To my mind there is no doubt that this case-law also applies to Article 35 TFEU. Therefore, where the requirements for the application of Articles 28 and 30 TFEU are met, it is those provisions that must apply rather than Article 35 TFEU.

61. There is no question that these conditions are met in the case in question, as explained in paragraphs 47 to 50 of this Opinion.

62. The inclusion of the value of intra-Community transfers of goods in the basis of assessment to the contributions at issue should therefore be examined in the light of Articles 28 and 30 TFEU.

63. In particular, it is necessary to ascertain whether the levying of the C3S and the additional contribution on transfers of goods to other Member States could be described as a charge having equivalent effect and whether it should therefore be considered as an infringement of the aforementioned provisions of the Treaty.

64. As we know, the concept of ‘charge having equivalent effect’ makes it clear that the authors of the Treaty intended to prohibit not only measures that are formally customs duties but also any measures that might have a different name but ultimately have the same effect as customs duties. ( 20 )

65. The most recent case-law of the Court defined this concept as ‘any pecuniary charge, however small and whatever its designation and mode of application, which is imposed unilaterally on goods by reason of the fact that they cross a frontier, and which is not a customs duty in the strict sense’. ( 21 )

66. To start with, there is no doubt that the C3S and the additional contribution relating to intra-Community transfers of goods are ‘pecuniary charges’ since they increase the amount of money to be paid annually to the collection body, namely the CNRSI.

67. There is also no doubt that they are ‘imposed unilaterally’ by the French State, since they are consistant with case-law interpreting the relevant national legislation.

68. Lastly, the contributions are levied only on transfers of goods to other Member States, whereas transfers within French territory are unaffected. It therefore follows that they are payable by reason of the fact that a border is crossed.

69. In the light of those considerations, it must be concluded that the C3S and the additional contribution relating to intra-Community transfers of goods constitute charges having an effect equivalent to customs duties, prohibited by Articles 28 and 30 TFEU.

70. It is worth remembering, however, that the case-law of the Court allows two exceptions to the prohibition on charges having equivalent effect. The first exception applies where the charge in question represents payment for a service actually rendered to an individual economic operator, of an amount in proportion to that service, ( 22 ) whereas the second applies where, under pre-established conditions, the charge is levied in order to fulfil obligations imposed by Community law. ( 23 )

71. From the case file it is clearly apparent that the portion of the C3S and of the additional contribution that pertains to intra-Community transfers of goods does not qualify for either of the above exceptions. First of all, because its purpose is to fund pro quota the Old-Age Solidarity Fund and the Pensions Reserve Fund (in the case of the C3S) and the National Sickness Insurance Fund for Employees (in the case of the additional contribution), it does not represent payment for a benefit, of an amount in proportion to the service rendered, provided to the companies and businesses required to pay it. Moreover, this portion is certainly not payable in connection with checks carried out to fulfil obligations composed by Community law.

C. The compatibility of the basis of assessment of the C3S and the additional contribution as a whole with the free movement of goods

72. In the alternative, I intend to examine the situation in which the Court considers that the question referred for a preliminary ruling by the national court should be reformulated so as to extend its scope to the basis of assessment of the C3S and the additional contribution as a whole, or in other words, the overall annual turnover of the companies and undertakings required to pay them.

73. Before the question can be reformulated, the applicability of the Treaty provisions on the free movement of goods to the contributions at issue must be carefully analysed. As observed earlier, the fact that the C3S and the additional contribution are levied on overall annual turnover sets them apart, in principle, from the kind of taxes levied on the movement of goods.

74. In their written observations, the French Government and the European Commission, when considering the scope of the question as defined in the preceding paragraphs, both argued that the provision by reference to which applicability to the contributions in question needs to be verified is Article 110 TFEU and not Articles 28 and 30 TFEU. Assuming that this observation is prima facie correct, for reasons that I will explain below, I will focus my analysis on the applicability to the C3S and the additional contribution of Article 110 TFEU.

75. It is worth remembering that Article 110 TFEU provides that Member States are prohibited from applying higher taxes to imported products than those applied to similar domestic products.

76. The French Government and the European Commission argue that the provision is not applicable because the C3S and the additional contribution fall within the department of ‘direct taxes’. ( 24 ) In the opinion of both parties, only ‘indirect taxes’ would be liable to constitute a barrier to the free movement of goods.

77. I do not agree with this conclusion.

78. I do not believe that the distinction between direct and indirect taxes has any significance for the purposes of determining the scope of Article 110 TFEU.

79. In that regard, I would first like to state that, when it has been asked to rule on the compatibility of national direct taxation measures with the fundamental freedoms, the Court has consistently concluded that, while it is true that direct taxation falls within the competence of the Member States, the Member States must nonetheless exercise that competence in a manner consistent with European Union law. ( 25 )

80. While the direct taxation measures adopted by Member States do not, as a general rule, evade the application of the other fundamental freedoms, I consider it logical to rule out any possibility that such measures mentioned above lie outside the scope of the free movement of goods.

81. Moreover, it is not inconceivable that a Member State might favour domestic products through a system of income taxes which, in practice, places a heavier tax burden on exporters than on businesses that intend to sell their products within the national territory.

82. In any event, I would like to point out that, because there is no definition of direct taxation in European Union law, the use of a criterion reflecting the distinction between direct and indirect taxation should be based on the classification used at national level. In that regard, as is well known, these classifications are not significant, because otherwise they would allow the Member States to avoid compliance with the provisions of European Union law. ( 26 )

83. I therefore consider that classification of the C3S and the additional contribution as direct or indirect taxation is irrelevant when determining whether those contributions are levied on the goods as such, for the purpose of ascertaining whether Article 110 TFEU should be applied to the present case.

84. On the contrary, it seems to me that the correct criterion can be inferred from earlier case-law, especially from the rulings clarifying the rationale for the prohibition on discriminatory internal taxation provided for by Article 110 TFEU.

85. I refer in particular to the Schöttle judgment (20/76, EU:C:1977:26). ( 27 ) Asked to rule on the applicability of Article 95 of the EEC Treaty (now Article 110 TFEU) to a tax on the transport of goods by road, the Court first of all stated that the purpose of that provision was to remove disguised ( 28 ) restrictions on the free movement of goods which may result from the tax provisions of a Member State and that, in view of the general scheme and objectives of that provision, the concept of a tax on a product must be interpreted broadly. ( 29 ) On the basis of those premisses, the Court concluded that the very rationale for Article 110 TFEU requires that it be applied to a tax such as that at issue, since it ‘has an immediate effect on the cost of the national and imported product’. ( 30 )

86. In the more recent opinion of Advocate General Sharpston, that judgment confirmed the principle fact that ‘a tax on activities involving products falls within Article 90 [now Article 110 TFEU] only where it has an immediate effect on their cost’. ( 31 )

87. From this principle it can therefore be inferred that, when assessing whether Article 110 TFEU is applicable, the purely formal issue of whether the criteria used as the basis for application of the tax in question concern an activity or a product can be disregarded. On the contrary, what is required is a verification of whether such a tax has the effect of increasing the cost price of domestic products and imported or exported products. If there is such an effect, the conclusion that the tax in question is levied on goods and is therefore subject to the prohibition on discriminatory internal taxation provided for by Article 110 TFEU is unavoidable.

88. When applying the principle in question to the present case, it is necessary to ascertain whether the C3S and the additional contribution, although formally levied on the overall turnover of the companies and undertakings required to pay them, have the effect, through the economic mechanism of costs being passed on, of increasing the cost price of goods sold within French territory and goods transferred to other Member States.

89. With regard to goods sold on French territory, it is reasonable to assume that the amount payable by way of the C3S (0.13%) and of the additional contribution (0.03%) is passed on by the companies and undertakings subject to those contributions in the cost price of the goods themselves. The same applies to goods transferred to other Member States, and it is therefore reasonable to assume that the amount of the contributions is reflected in the nominal value of the goods in each transfer. ( 32 ) The levying of the C3S and the additional contribution therefore has the effect of increasing the cost price of both categories of goods.

90. It follows that, if the scope of the question referred for a preliminary ruling is extended to the entire basis of assessment of the C3S and the additional contribution, those contributions should, in my view, be considered to act as a barrier to the free movement of goods.

91. More specifically, since the contributions are levied at the same time on goods sold on French territory and goods exported to other Member States, they fall in principle, within the scope of Article 110 TFEU. ( 33 )

92. In that regard, I should, however, point out that, according to the case-law of the Court, a fiscal charge constitutes ‘internal taxation’ within the meaning of Article 110 TFEU, and thus escapes classification as a charge having equivalent effect in accordance with Articles 28 and 30 TFEU only if it is part of a general system of internal taxes systematically levied on product categories in accordance with objective criteria applied without regard to the product’s origin or destination. ( 34 )

93. When making this assessment, it may be necessary first of all to take into account the intended purpose of the revenue answering from the charge. Where this revenue is to be used to finance activities which specifically benefit products marketed on national territory, the charge in question will constitute a charge having equivalent effect, provided that the fiscal burden on those products is entirely neutralised by the advantages financed by the charge, whilst the charge on the products exported constitutes a net burden. ( 35 )

94. This is not the situation, however, in the case of interest to us. In that regard, Article L. 651-1 of the Social Security Code establishes that the revenue from the C3S and the additional contribution is to be used to finance the budget of the bodies set up to provide for employed and self-employed workers, namely the RSI, the Old-Age Solidarity Fund, the Pensions Reserve Fund and the National Sickness Insurance Fund for Employees. As shown by the French Government in its own written observations, the services provided by those bodies are the same regardless of whether the companies or businesses required to pay the contributions make transfers of goods within French territory or to other Member States.

95. Secondly, the assessment referred to in paragraph 93 states that it is necessary to ascertain, on the basis of the Denkavit judgment (132/78, EU:C:1979:139) whether the fiscal burden falls on domestic products marketed on the national market and products exported as such at the same commercial stage and whether the basis for the burden is identical for both categories of products. ( 36 ) If it is not, the charge in question would once again be covered by the prohibition on charges having equivalent effect.

96. In that regard, it is worth mentioning first of all that subsequent case-law seems to consider that the identity of the basis for the burden is ‘absorbed’ by the fact that domestic and exported products are taxed at the same commercial stage. ( 37 ) In the light of this, I will ascertain only whether the fact that the C3S and the additional contribution are levied on products transferred to other Member States at the time of their transfer, whereas the contributions are levied on products transferred within the national territory only when they are sold, means that the contributions are not applied to both categories of products ‘at the same commercial stage’.

97. This concept has been interpreted broadly by the Court, which has prioritised economic reality over appearances. ( 38 ) For example, in the Nygård judgment (C‑234/99, EU:C:2002:244), the Court stated that a tax levied at the time of supply for purposes of slaughter, in the case of pigs intended for slaughter on the national market, and at the time of export, for pigs exported live, should be viewed as being applied at the same marketing stage, both operations being carried out with a view to releasing the pigs from primary national production. ( 39 ) Similarly, charges such as the C3S and the additional contribution, which are payable at the time of transfer for goods transferred to other Member States and at the time of sale for goods transferred within the national territory, do not appear to be applied at two different commercial stages. In fact, it seems that it would be extremely difficult to argue that sale and transfer for the purpose of sale do not, in economic reality, belong to the same commercial stage.

98. In conclusion, if the scope of the question referred for a preliminary ruling is extended to the entire basis of assessment of the C3S and the additional contribution, the contributions would constitute ‘internal taxation’ within the meaning of Article 110 TFEU.

99. The answer to the question of whether they are a greater burden on goods subject to intra-Community transfer than on goods transferred within national territory, thus infringing that provision, should probably be negative. The purchase price (or cost price), which is the basis of assessment of goods subject to intra-Community transfer within the meaning of Article 76 of the VAT Directive, is generally lower than the selling price, which is the basis of assessment of goods transferred within national territory. However, it is a matter for the referring court to decide whether that assumption is correct.

100. In any case, the European Commission, in its written observations, mentions two cases in which the C3S and the additional contribution could constitute a barrier to the free movement of goods, contrary to Article 110 TFEU. The first is where French law does not include an entitlement to deduction from the basis of assessment to the contributions of the value of goods transferred to another Member State that remained unsold and have been transferred back to France, while the second is where goods transferred to another Member State are counted towards the basis of assessment a second time when they are sold.

101. In the first case, if the national legal system offers no effective remedy for the recovery of amounts paid as C3S and additional contributions for goods that have remained unsold, ( 40 ) it is my view that, because no requirement exists for the future sale of those goods, the contributions for intra-Community transfers would ultimately be payable solely for having crossed the border. Consequently, they should be examined in the light of the prohibition of charges having equivalent effect referred to in Articles 28 and 30 TFEU.

102. In the second case, I am of the opinion that, on the basis that the contributions in question would be payable twice (at the time of transfer and at the time of sale) on goods transferred to other Member States, whereas they would be payable only once on transfers within national territory (at the time of sale), the C3S and the additional contribution in relation to intra-Community transfers would both fall within the scope of Articles 28 and 30 TFEU, as already acknowledged by the Court in cases where, solely for imported products, two events generate charges. ( 41 )

103. In both cases, the examination of which is a matter for the referring court, compatibility with Articles 28 and 30 TFEU should be assessed with reference to the considerations set out in paragraphs 62 to 69 of this Opinion.

IV. Conclusion

104. For the reasons set out above I therefore propose that the Court give the following answer to the question referred by the Court of Cassation: Articles 28 and 30 of the Treaty on the Functioning of the European Union should be interpreted as prohibiting the value of goods transferred from France to another Member State of the European Union by or on behalf of an entity subject to the social solidarity contribution payable by companies and to the contribution additional to the latter, for the purposes of its business, from being taken into account for determining the overall turnover that constitutes the basis of assessment to those contributions.

( 1 ) Original language: Italian.

( 2 ) OJ 2006 L 347, p. 1.

( 3 ) See Cass. Soc. 29 June 1995, No 92-22.025, Organic v Cofiroute.

( 4 ) See Cass. 2ème Civ., 11 February 2016, No 14-26-363, Sté Schaeffler France v Caisse nationale du RSI, and Cass. 2ème Civ., 7 November 2013, No 12-25-776, Ste Soitec v Caisse nationale du RSI.

( 5 ) See the case-law cited in footnote 4 of this Opinion.

( 6 ) OJ 1991 L 376, p. 1.

( 7 ) Loi no 92-677 du 17 juillet 1992 portant mise en œuvre par la République française de la directive du Conseil des communautés européennes (C.E.E.) no 91-680 complétant le système commun de la taxe sur la valeur ajoutée et modifiant, en vue de la suppression du contrôle aux frontières, la directive (C.E.E.) no 77-388 et de la directive (C.E.E.) no 92-12 relative au régime général, à la détention, à la circulation et au contrôle des produits soumis à accise (JORF No 166 of 19 July 1992, p. 9700) (Law No 92-677 of 17 July 1992 on implementation by the French Republic of Council Directive 91/680/EEC supplementing the common system of value added tax and amending Directive 77/388/EEC with a view to the abolition of fiscal frontiers and of Directive 92/12/EEC on the general arrangements for products subject to excise duty and on the holding, movement and monitoring of such products).

( 8 ) See footnote 3 of this Opinion.

( 9 ) See footnote 4 of this Opinion.

( 10 ) Judgment of 27 November 1985, Rousseau Wilmot (295/84, EU:C:1985:473).

( 11 ) OJ 1977 L 145, p. 1.

( 12 ) Judgment of 27 November 1985, Rousseau Wilmot (295/84, EU:C:1985:473, paragraph 16).

( 13 ) See, inter alia, the judgments of 15 September 2011, Gueye (C‑483/09 and C‑1/10, EU:C:2011:583, paragraph 42); of 15 April 2010, Gala-Salvador Dalí and Visual Entidad de Gestión de Artistas Plásticos (C‑518/08, EU:C:2010:191, paragraph 21); and of 21 October 2010, Padawan (C‑467/08, EU:C:2010:620, paragraph 22).

( 14 ) On the nature of fundamental rules, see, for example, the judgment of 1 July 1969, Commission v Italy (24/68, EU:C:1969:29, paragraph 10). On the obligation to interpret any exceptions restrictively, see, most recently, the judgment of 3 December 1998, KappAhl (C‑233/97, EU:C:1998:585, paragraph 18).

( 15 ) It seems to me that this is the real sense of the Commission’s line of argument, and that the Commission’s reference to the C3S and the additional contribution having the status of indirect taxes (which would mean that Article 110 TFEU was applicable) or direct taxes (which would presumably mean that Article 35 TFEU was applicable) is merely due to the need to reply to specific questions formulated in those terms by the Court. As regards the irrelevance of the distinction between direct and indirect taxes in the present case in question, see paragraphs 78 to 83 of this Opinion.

( 16 ) Judgments of 2 October 2014, Orgacom (C‑254/13, EU:C:2014:2251, paragraph 20), and of 8 November 2007, Stadtgemeinde Frohnleiten and Gemeindebetriebe Frohnleiten (C‑221/06, EU:C:2007:657, paragraph 26).

( 17 ) See judgments of 21 September 2000, Michaïlidis (C‑441/98 and C‑442/98, EU:C:2000:479, paragraph 22), and of 22 April 1999, CRT France International (C‑109/98, EU:C:1999:199, paragraph 11).

( 18 ) It is true that this would appear to be the effect produced by the decisions of the Cour de cassation (Court of Cassation), as stated several times in this Opinion. However, according to the settled case-law of the Court, the scope of national laws, regulations or administrative provisions must be assessed in the light of the interpretation given to them by national courts. See, to that effect, judgments of 16 September 2015, Commission v Slovakia (C‑433/13, EU:C:2015:602, paragraph 81), and of 18 July 2007, Commission v Germany (C‑490/04, EU:C:2007:430, paragraph 49).

( 19 ) Judgments of 22 March 1977, Iannelli & Volpi (74/76, EU:C:1977:51, paragraph 9); of 16 December 1992, Lornoy and Others (C‑17/91, EU:C:1992:514, paragraph 14); and of 17 June 2003, De Danske Bilimportører (C‑383/01, EU:C:2003:352, paragraph 30).

( 20 ) See judgment of 14 December 1962, Commission v Luxembourg and Belgium (2/62 and 3/62, EU:C:1962:45, page 805).

( 21 ) Judgment of 2 October 2014, Orgacom (C‑254/13, EU:C:2014:2251, paragraph 23).

( 22 ) See, inter alia, the judgments of 9 September 2004, Carbonati Apuani (C‑72/03, EU:C:2004:506, paragraph 31), and of 22 April 1999, CRT France International (C‑109/98, EU:C:1999:199, paragraph 17).

( 23 ) See judgments of 7 July 1994, Lamaire (C‑130/93, EU:C:1994:281, paragraph 14), and of 27 September 1988, Commission v Germany (18/87, EU:C:1988:453, paragraph 6).

( 24 ) In this case, according to the Commission, it would be necessary to look into the applicability of Article 35 TFEU to the case in question. See paragraph 51 of this Opinion.

( 25 ) See, inter alia, the judgments of 6 October 2009, Commission v Spain (C‑153/08, EU:C:2009:618, paragraph 28); of 18 July 2007, Lakebrink and Peters-Lakebrink (C‑182/06, EU:C:2007:452, paragraph 14); of 14 December 2006, DenkavitInternationaal and Denkavit France (C‑170/05, EU:C:2006:783, paragraph 19); of 23 February 2006, Keller Holding (C‑471/04, EU:C:2006:143, paragraph 28). On this subject, although with reference to a provision of secondary law implementing the principle of free movement for workers, see also the Opinion of Advocate General La Pergola in Commission v France (C‑34/98 and C‑169/98, EU:C:1999:392, point 19).

( 26 ) Furthermore, even if it were accepted that the manner in which the contributions are classified in French law to provide guidance for the purpose of determining the nature of the C3S and the additional contribution, it should be noted the nature of those contributions, even in the national legal system, is far from clear, as acknowledged by some of the parties at the hearing. Whereas the Conseil constitutionnel (Constitutional Council) has taken the view that it is a mandatory levy which does not have the characteristics of a social contribution or a parafiscal charge, but instead amounts to ‘taxation of any nature’, in accordance with Article 34 of the French Constitution (Decision No 91-302 DC of 30 December 1991, recital 12), the Court of Cassation has stated that it is a social contribution because its purpose is solely to fund social security schemes (see, for example, Second Civil Chamber, judgments of 28 March 2002, No 00-17675, and of 14 January 2010, No 09-11284).

( 27 ) Judgment of 16 February 1977, Schöttle (20/76, EU:C:1977:26).

( 28 ) Emphasis added.

( 29 ) Emphasis added.

( 30 ) Ibid., paragraph 15.

( 31 ) Opinion of Advocate General Sharpston in Stadtgemeinde Frohnleiten and Gemeindebetriebe Frohnleiten (C‑221/06, EU:C:2007:372, point 36).

( 32 ) These values are individually calculated by the companies and undertakings concerned both for the purpose of inclusion in column 6 of the VAT declaration, where, along with national sales, they form part of the total for ‘Intra-Community transfers’, and for reporting to the tax and statistical authorities in the Déclaration d’échanges de biens entre États membres de la Communauté européenne (Declaration of goods exchanged between the Member States of the European Community).

( 33 ) See the case-law cited in footnote 17 to this Opinion.

( 34 ) Judgments of 23 April 2002, Nygård (C‑234/99, EU:C:2002:244, paragraph 21), and of 8 June 2006, Koornstra (C‑517/04, EU:C:2006:375, paragraph 16).

( 35 ) Judgments of 23 April 2002, Nygård (C‑234/99, EU:C:2002:244, paragraph 22), and of 8 June 2006, Koornstra (C‑517/04, EU:C:2006:375, paragraph 18).

( 36 ) Judgment of 31 May 1979, Denkavit Loire (132/78, EU:C:1979:139, page 1923).

( 37 ) See the judgment of 11 June 1992, Sanders Adour and Guyomarc’h Orthez Nutrition Animale (C‑149/91 and C‑150/91, EU:C:1992:261, paragraph 18), in which the Court states: ‘As to the requirement that the chargeable events be identical, no difference may be discerned in the present case in the fact that the charge is levied on an imported product at the time of importation and on the domestic product when it is sold or used, for in actual economic terms the marketing stage is the same since both operations are carried out with a view to utilisation of the product.’ This interpretation was subsequently confirmed by the Court in the judgments of 2 April 1998, Outokumpu (C‑213/96, EU:C:1998:155, paragraph 25), and of 23 April 2002, Nygård (C‑234/99, EU:C:2002:244, paragraph 25). On this point, see also the Opinion of Advocate General Jacobs in Outokumpu (C‑213/96, EU:C:1997:540, point 35).

( 38 ) See, in this regard, the Opinion of Advocate General Mischo in Nygård (C‑234/99, EU:C:2001:260, point 30).

( 39 ) Judgment of 23 April 2002, Nygård (C‑234/99, EU:C:2002:244, paragraph 30).

( 40 ) At the hearing, the French Government indicated that a reimbursement for the nominal value of the unsold goods could be obtained by making a claim as provided for by Article L. 243-6 of the Social Security Code, which governs the general reimbursement procedure for social contributions and family allowances that are ‘incorrectly paid’ (indûment versées’). The French Government admitted that the procedure had been attempted only once and that the claim was abandoned by the business in question when the authority requested the evidence. In view of this admission by the French government, I have doubts as to whether Article L. 243-6 offers any real likelihood of reimbursement of C3S and the additional contribution if goods transferred to another Member State go unsold.

( 41 ) See judgment of 17 September 1997, Fricarnes (C-28/96, EU:C:1997:412, paragraph 28).