ddrg/super_eurlex huggingface dataset:
39.

Article 17(5) provides for cases in which goods and services are used for the taxable person's economic activity where that activity consists both of transactions which give a right to deduct and transactions for which there is no such right. No right to deduct may be claimed for the latter, because, for instance, they are transactions of negotiation of credit, on which the taxable person himself has not had to pay value added tax. There is no apparent reason why in such a case, for example, a transaction exempt from value added tax under Article 13B(d) should not be included in the denominator of the fraction for calculating the deductible percentage. The taxable person is not required to pay any value added tax for a portion of his transactions in the course of his activity — why, then, should he be able to claim deduction? For this reason these untaxed transactions are included in the denominator for the purpose of the calculation of the deductible proportion, as a result of which the amount of the deduction is reduced. A case in which untaxed transactions were left out of the denominator would be conceivable only at the cost of distorting the overall calculation of the deductible input tax. I shall now explain what is to be understood by the concept ‘distortion’ in this connection: the criterion for the application of Article 17(5) and with it the calculation of the deductible proportion is the use of the taxable person's business assets for taxed transactions, which thus entail a right to deduct, and of transactions which do not entail such a right. But the turnover attributable to every transaction is included in the calculation of the deductible proportion. That is, as long as the resources utilized are to some extent related to the transactions arising (taxed or untaxed), there are no difficulties. The position is different, however, if the resources applied are slender but the transaction for which they are used is proportionally much greater. Then this relatively substantial transaction has the effect of reducing the deduction. The relevant turnover is included in its entirety in the denominator although only slender resources were used for the transaction. The diminution of the deduction therefore becomes disproportionately high. In the case before the Court, for example, the income from the investment activity amounts to 14% of the total income. That is to say, that 14% would be included in the denominator and would thus reduce the input tax, although according to the plaintiff's pleadings only a few telephone calls and letters were required for these transactions. That is to say, the secretaries had to use very little time on these transactions and the relevant telephone charges are also very slight. It is not clear why an activity such as this, which is not part of the actual economic activity, should reduce the amount of the deduction disproportionately. ( 10 )
34.

Before turning to the national court's questions I should mention a preliminary point, although it has not been raised in these proceedings. According to the Court's case-law, a directive which has not been implemented can impose obligations only on the State; a directive cannot of itself impose obligations on an individual and cannot therefore be relied upon as such against an individual. ( 16 ) The levy in issue in the present case is prescribed by the State, but its amount is fixed by, and it is payable to, the Chambers. The question therefore arises whether, independently of their classification under Netherlands law as public or private bodies, the Chambers are to be regarded under Community law as an emanation of the State against which the provisions of a directive can be invoked. The Court has held that a body, whatever its legal form, which has been made responsible, pursuant to a measure adopted by the State, for providing a public service under the control of the State and has for that purpose special powers beyond those which result from the normal rules applicable in relations between individuals is included among the bodies against which the provisions of a directive capable of having direct effect may be relied upon. ( 17 ) The attributes of the Chambers, as set out above, suggest that the Chambers satisfy those criteria. In any event, it would be unsatisfactory to hold that, by reason of the form in which a body is set up, a taxpayer cannot rely on the illegality of a tax merely because it is payable to that body rather than to the State. It is true that if the taxpayers' claims were to succeed in the present case, it would be the Chambers, not the State, which would be liable to refund the taxes. However in my view that merely shows that the principle according to which an unimplemented directive can impose obligations only on the State is a principle which has to be understood broadly, if it is not to have arbitrary consequences.
66.

I reach that conclusion on the basis of the information provided by France both in its correspondence with the Commission preceding the adoption of the decision and in its pleadings in this action. It should however also be noted that the legality of a decision must be assessed in the light of the information available to the Commission when the decision was adopted. ( 18 ) In this case, the Commission requested information from France about the functioning of the FNE scheme before it reached its decision. The stated basis for the decision, that Kimberly Clark's restructuring had been undertaken with a view to improving its competitiveness and that the FNE's contribution to the costs of a social plan is negotiated with the undertaking concerned and determined on a case-by-case basis depending on the undertaking's financial situation and own efforts, closely reflected the somewhat sketchy information provided by France. As the Commission has pointed out, it was only in the course of the pleadings that full information about the FNE scheme was provided. Its conclusion that the aid granted to Kimberly Clark was liable to distort competition and to affect trade within the meaning of Article 92(1) of the Treaty is reasonable both in retrospect and a fortiori in the light of the very limited information available to it at the time.
8.

I must point out in limine that, to my mind, it is doubtful whether the question as formulated is admissible. The Court has held that Article 6 of the Treaty ‘requires that persons in a situation governed by Community law be placed on a completely equal footing with nationals of the Member State’ ( 1 ) (my emphasis). The question has been raised because the constraint of the security for costs provided for by the Swedish legislation in the context of judicial protection allegedly operates to the disadvantage of natural and legal persons from other Member States and hence has the effect (albeit indirect) of discriminating — again to the detriment of the said persons — as regards the manner in which a freedom guaranteed by the Treaty, namely the free movement of goods, is exercised. It is alleged, in fact, that the security at issue makes it more difficult for foreign traders to recover claims arising out of dealings and transactions conducted pursuant to the free movement of goods. This has precisely the effect of discriminating against the exercise of a right conferred by the Treaty on foreign natural and legal persons on terms of perfect equality with Swedish nationals, by constituting a disincentive thereto. That the question is framed with this end in mind has been made plain by the Greek and Swedish Governments, which, along with the Irish Government, have submitted observations. The Commission takes the same view. There is no doubt that the Court has jurisdiction to consider such a question. The doubt as to admissibility emerges, however, when it is considered that the commercial transaction underlying the claim which is contested in the main proceedings goes back to the period between April 1990 and September 1991, when Sweden was not yet a member of the European Community. In view of that fact, it cannot consequently be presumed that the civil action brought by the plaintiff in order to recover its claim in the Swedish court of first instance is the upshot of, or in any event relates to, any legal act or relationship capable, at the time when it was brought into being, of coming under the provisions of Community law, and hence under the principle referred to in the order for reference. Moreover, the Court has repeatedly held that it has no jurisdiction to rule on questions referred for preliminary rulings where the interpretation of Community law does not have a bearing on the ‘effectiveness’, in addition, of course, to the subject-matter, of the main proceedings. ( 2 ) In my view, ‘effectiveness’ also signifies in this context that the Community provisions must be applicable ratione temporis.
14.

If there are two possible headings for the classification of a product, classification is effected in accordance with Rule 3 of the General Rules. Rule 3(b) is relevant in the present case. As the Commission rightly submits, the basic module is a composite product. There is no inseparable connection between the individual components. According to the Explanatory Notes, however, that is irrelevant, provided that the components are adapted one to the other, are mutually complementary, and together form a whole which would not normally be offered for sale in separate parts. ( 6 ) The basic module satisfies those conditions. It is therefore to be classified, under Rule 3(b), according to the component which gives it its essential character. Decisive factors here are the nature of the components, their bulk, quantity, weight or value, and their role in relation to the use of the goods. ( 7 ) As the Commission rightly submits, the nature, bulk, quantity and weight of the various components cannot be of any great significance in this case, since they are not important for the function of the basic module. Instead the value of the components and their role in relation to the use of the goods are decisive. As the Commission submits, the display and user elements and the connection cable and housing are of subordinate importance only. They serve either to make the drives and power supply usable for the actual purpose — the automatic processing of data — or as protection for the components which have been built in. The Commission is also right in presuming that from the point of view of value the drives are the most important components. Above all if one considers the purpose, namely automatic data processing, it is the drives, not the power supply unit, which are to be regarded as the components which determine the essential character. From that it follows that the basic module is to be classified, like the components which determine its character, namely the drives, as a storage unit in subheading No 84719359. The answer to Question 1 must therefore be that the basic module is to be classified pursuant to General Rule 3(b) as a storage unit in subheading No 84719359, on the basis of the drives it contains.
62.

Finally, it has been argued that, under Article 1599(q) of the General Tax Code, the issue of a log book as a result of a change in marital or civil status (in the case of natural persons) or merely a change of name (in the case of legal persons) gave rise to the payment of a fixed charge, not a proportional charge. It has tentatively been inferred from this that the proportional charge was payable by reason of a change of ownership (of the vehicle, in this case) and thus fell within the scope of the directive. Those arguments cannot be upheld. First of all, the contested charge is payable by reason of the vehicle being used for the first time by the owner himself or being used once again by the new owner, and not only on the sale or transfer of the vehicle. In any event, however, a change of ownership is not relevant in itself for the purpose of bringing the contested charge within the scope of the directive. It is self-evident that any contribution entails a change of ownership. However, the directive does not apply to every kind of transfer of ownership, in other words, it does not aim to harmonize transfer duties. It applies to one particular transfer of ownership, that is to say, the contribution of capital and other asset in order to promote the raising of capital by capital companies. This aim differs from those of a transfer of vehicles (sale, gift, succession, and so on). It follows that capital duty (and duties treated as such) within the meaning of the directive, and the vehicle registration charge, when considered by reference to their objective characteristics and not to incidental factors, ( 26 ) are different in nature and not linked to one another in any way. In addition, as the registration charge at issue does not, because of its objective characteristics, come within the scope of the directive but within the remit of the national legislature, the fact that the latter lays down more favourable tax rules for certain special cases of vehicle registration (for example, as a result of a change in the civil or marital status of natural persons or in the name of a legal person) is not sufficient on its own to alter the nature of that charge or to bring it within the scope of the directive.
9.

It is, therefore, claimed that the reference for a preliminary ruling is inadmissible because the national court, in confining itself to reproducing the arguments of the plaintiff, has not adequately set out the facts and the legal framework of the dispute, nor the reasons prompting it to refer questions to the Court, with the result that the Member States and any other interested parties are not in a position to submit any pertinent observations to the Court. In that connection, it should be noted that, under settled case-law, the national court must clearly set out the factual and legislative context of the dispute in the main proceedings or, at the very least, explain the factual circumstances on which the questions referred to the Court of Justice are based, so as to enable the Court to perform its task and give the Governments of the Member States and other interested parties to whom the order for reference is communicated the opportunity to submit observations pursuant to Article 20 of the EC Statute of the Court. ( 4 ) An order for reference which does not satisfy any of these requirements will be rejected as inadmissible, as illustrated by the case-law cited. That is not, however, the case here. The factual and legislative context of the dispute in the main proceedings is shown sufficiendy clearly in the order for reference read in conjunction with the observations of the parties, and of the Commission in particular, and the grounds for the reference are comprehensible regardless of the reply to be given. Moreover, national courts are empowered or bound, according to the circumstances, to refer a question to the Court of Justice for a preliminary ruling either of their own motion or at the request of the parties. ( 5 ) Consequently, the sole fact that the Pretore acceded to the plaintiff's claim that questions be referred for a preliminary ruling is irrelevant here. Accordingly, the objection to the contrary effect must be rejected.
((State aid – Decision 96/666/EC – Compensation for economic disadvantages caused by the division of Germany – Serious disturbance in the economy of a Member State – Regional economic development))
10.

In the case before the Court, on the other hand, the situation is in essence reversed: the creditor in question is the awarding body and its contractual partner is the holding company which performs the contract through the intermediary of companies within its group. The relations existing between the holding company and the companies in the group may be of the most varied nature as regards the extent of participation and even the nature of the legal relationships which bind them together. The influence of national company law may, moreover, play a decisive role as far as the image and structure of the group are concerned. In that situation, the awarding entity could actually be penalized by the fact that it would not be able validly and effectively in such cases to require the holding company and, more importantly, the various companies within the group to honour the undertakings made by the holding company when the contract was awarded. ( 8 ) In other words, the requisite conditions must be met in order that the companies within the group are in fact subject to the obligation to perform provided for, which must take the form of a legally binding obligation. ( 9 ) It goes without saying that the context in which this problem arises is rendered considerably more complicated when one reflects on the consequences stemming from the fact that, even within a group, the company laws of different Member States are applicable at the same time, which means that recourse must inevitably be had to the rules of private international law, which are often unable to permit the person interpreting them to find his way through the intricacies with which he is faced and above all to ensure full equivalence as between the rules of States having different traditions and conceptions of the law. ( 10 )
Opinion of Mr Advocate General La Pergola delivered on 5 May 1998. - Commission of the European Communities v Grand Duchy of Luxembourg. - Failure of a Member State to fulfil its obligations - Failure to transpose Directives 94/15/EC and 94/51/EC. - Case C-339/97.



European Court reports 1998 Page I-04903



Opinion of the Advocate-General

1 By application lodged on 30 September 1997 the Commission requested the Court to declare that, by failing to adopt within the prescribed period the measures necessary to comply with Commission Directive 94/15/EC of 15 April 1994 adapting to technical progress for the first time Council Directive 90/220/EEC on the deliberate release into the environment of genetically modified organisms, (1) and with Commission Directive 94/51/EC of 7 November 1994 adapting to technical progress Council Directive 90/219/EEC on the contained use of genetically modified micro-organisms, (2) the Grand Duchy of Luxembourg has failed to fulfil its obligations.

2 The defendant Member State, while acknowledging that it has not yet transposed the abovementioned directives into national law, points out that the legislative procedures for the implementation of those measures are under way. As the Commission correctly points out, however, the date which must be taken into account when determining whether a Member State has failed to fulfil its obligations is that set in the reasoned opinion. (3) It is not disputed that, at the time, the defendant State had not adopted the provisions necessary to bring national law into line with the abovementioned directives; nor do such provisions appear to have been adopted in the course of the present proceedings. The Grand Duchy of Luxembourg has therefore failed to comply with the directives in question within the prescribed period.

3 I therefore propose that the Court uphold the application and order the defendant State to pay the costs.

(1) - OJ 1994 L 103, p. 20.

(2) - OJ 1994 L 297, p. 29.

(3) - See Case C-302/95 Commission v Italy [1996] ECR I-6769.
I therefore propose that the Court answer the questions referred to it by the Audiencia Provincial de Palma de Mallorca as follows:

The 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 allows the Member States to extend the scope of the exclusions from the exemptions to cases not provided for, which may include, as in this case, the letting of property as an economic activity.
((EC and ECSC Treaties – State aid – Aid granted by the German Government to Gröditzer Stahlwerke GmbH and its subsidiary Walzwerk Burg GmbH – Composition of the Commission – Notification to the Commission of aid and plans to grant aid – Concept and content of notification – Scope of the ECSC Treaty – Fifth Steel Aid Code – Powers of Commission ratione temporis – Article 87(2)(c) EC – Privatisation procedure – Private investor principle – Bidding procedures – Transparency))
((Interpretation of Article 5a(3) of Council Directive 90/387/EEC of 28 June 1990 on the establishment of the internal market for telecommunications services through the implementation of open network provision, as amended by Directive 97/51/EC of the European Parliament and of the Council of 6 October 1997 – Appeal to an independent body against decisions of the regulatory authority – Direct effect))
((Failure to fulfil Treaty obligations – Free movement of goods – Directive 73/241/EEC – Marketing of chocolate – Products containing vegetable fats other than cocoa-butter – Prohibition – Obligation to rename as chocolate substitute))
((Freedom of establishment – Tax legislation – Tax on company profits – Covert distribution of profits – Tax credit – Indirect discrimination))
((Social policy – Directives 76/207/EEC and 79/7/EEC – Collective agreement – Pre-retirement scheme – Discrimination between employees based on sex – Possible consequent incompatibility with the directives))
((Failure of a Member State to fulfil its obligations – Incorrect transposition of Articles 2(a) and 3(2), (3) and (4) of Council Directive 90/313/EEC on the freedom of access to information on the environment – Transposition by means of a general legal framework))
((Failure of a State to fulfil obligations – Public contracts for services, supplies and works – Review procedures – Directive 89/665/EEC – Transposition – Definition of contracting authorities – Body governed by public law – Reviewable measures – Interim measures))
((Annulment of Commission Decision 2000/362/EC of 25 May 2000 on the total amount of Community aid for the eradication of classical swine fever in the Netherlands in 1997 (C(2000) 1385) and Commission Decision 2001/739/EC of 17 October 2001 on the total amount of Community aid for the eradication of classical swine fever in the Netherlands in 1998 (C(2001) 3110) – Flat-rate reduction in the amount to be paid under the co-financing system))