Case C-446/03: Reference for a preliminary ruling by the High Court of Justice (England & Wales), Chancery Division, by order of that court dated 16 July 2003, in the case of Marks & Spencer plc against David Halsey (HM Inspector of Taxes)
Date: 2003-12-13
Institutions: Court of Justice
Subjects: United Kingdom, corporation tax, group of companies, interpretation of the law, tax on profits of self-employment, tax relief, tax system

C 304/18

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Official Journal of the European Union

13.12.2003

2.

If the answer to Question 1 is in the negative: must
refusal to accept the document be deemed to have the
effect in law of rendering the service inoperative in its
entirety?

3.

If the answer to Question 1 is in the affirmative:

(a) Within what period of time and in what manner
must the translation be brought to the attention of
the addressee? Must notification of the translation
satisfy the conditions which the Regulation imposes
on the service of documents or can the manner of
dispatch be freely determined?

(b) Does national procedural law apply in respect of the

possibility of rectifying the failure?

(1) Council Regulation (EC) No 1348/2000 of 29 May 2000 on the
service in the Member States of judicial and extrajudicial docu-
ments in civil or commercial matters (OJ 2000 L 160, p. 37).

Reference for a preliminary ruling by the High Court of
Justice (England & Wales), Chancery Division, by order
of that court dated 16 July 2003, in the case of Marks &
Spencer plc against David Halsey (HM Inspector of Taxes)

(Case C-446/03)

(2003/C 304/27)

Reference has been made to the Court of Justice of the
European Communities by an order of the High Court of
Justice (England & Wales), Chancery Division, dated 16 July
2003, which was received at the Court Registry on 22 October
2003, for a preliminary ruling in the case of Marks & Spencer
plc and David Halsey (HM Inspector of Taxes) on the following
questions:

1.

In circumstances where:

— provisions of a Member State, such as the UK
provisions on group relief, prevent a parent com-
pany which is resident for tax purposes in that State
from reducing its taxable profits in that State by
setting off losses incurred in other Member States
by subsidiary companies which are resident for tax
purposes in those States, where such set off would
be possible if the losses were incurred by subsidiary
companies resident
the parent
company;

in the State of

— the Member State of the parent company:

— subjects a company resident within its territory
to corporation tax on its total profits, including
the profits of branches in other Member States,
with arrangements for the availability of double
taxation relief
for those taxes incurred in
another Member State and under which branch
losses are taken account of in those taxable
profits;

— does not subject the undistributed profits of
subsidiaries resident in other Member States to
corporation tax;

— subjects the parent company to corporation
tax on any distributions to it by way of dividend
by the subsidiaries resident in other Member
States while not subjecting the parent company
to corporation tax on distributions by way of
dividend by subsidiary companies resident in
the State of the parent;

— grants double taxation relief

to the parent
company by way of a credit in respect of
withholding tax on dividends and foreign taxes
paid on the profits in respect of which divi-
dends are paid by subsidiary companies resi-
dent in other Member States;

is there a restriction under Article 43 EC, in conjunction
with Article 48 EC? If so, is it justified under Community
law?

2.

(a) What difference, if any, does it make to the answer
to Question 1 that, depending on the law of the
Member State of the subsidiary, it is or may be
possible in certain circumstances to obtain relief for
some or all of the losses incurred by the subsidiary
against taxable profits in the State of the subsidiary?

(b)

If it does make a difference, what significance, if any,
is to be attached to the fact that:

— a subsidiary resident in another Member State
has now ceased trading and, although there is
provision for loss relief subject
to certain
conditions in that State, there is no evidence
that
in the circumstances such relief was
obtained;

— a subsidiary resident in another Member State
has been sold to a third party and, although
there is provision under the law of that State
for the losses to be used under certain con-
ditions by a third party purchaser, it is uncertain
whether they were so used in the circumstances
of the case;

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Official Journal of the European Union

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— the arrangements under which the Member
State of the parent company takes account of
the losses of UK resident companies apply
regardless of whether the losses are also relieved
in another Member State?

(c) Would it make any difference if there were evidence
that relief had been obtained for the losses in the
Member State in which the subsidiary was resident
and,
the relief was
obtained subsequently by an unrelated group of
companies to which the subsidiary was sold?

if so, would it matter that

Action brought on 29 October 2003 (fax 24.10.2003) by
the French Republic against the Commission of the
European Communities

(Case C-455/03)

(2003/C 304/28)

An action against the Commission of the European Communi-
ties was brought before the Court of Justice of the European
Communities on 29 October 2003 (fax 24.10.2003) by the
French Republic, represented by F. Alabrune, G. de Bergues
and C. Lemaire, acting as Agents, with an address for service
in Luxembourg.

The French Republic claims that the Court should:

— annul Commission Regulation (Euratom) No 1352/2003
of 23 July 2003 amending Regulation (EC) No 1209/
2000 determining procedures for effecting the communi-
cations prescribed under Article 41 of the Treaty estab-
lishing the European Atomic Energy Community (1);

— order the Commission to pay the costs.

Pleas in law and main arguments

The Commission lacks competence to adopt the contest-
(1)
ed regulation: neither Articles 41 EA to 44 EA nor Council
Regulation (Euratom) No 2587/1999, which are the legal
bases cited by the Commission in the contested regulation,
constitute a legal basis enabling it to adopt that regulation.

(2)

Breach of the EA Treaty:

— Article 42 EA: under the procedure established by the
contested regulation, the Commission de facto alters the
three-month period laid down by this provision of the
EA Treaty, which the Council alone had the power to
alter.

— Article 43 EA: in adopting the contested regulation, the
Commission exceeded the powers conferred upon it by
this provision. The Commission has established, by
means of an instrument of general application that is
mandatory in its entirety and directly applicable in
every Member State, a procedure truly entailing detailed
examination of
investment projects, which is quasi-
suspensory in nature.

— Article 44 EA: under the contested regulation, publication
of investment projects communicated to the Commission
becomes mandatory and automatic in nature, whereas it
is merely optional under this article. Nor does the
contested regulation specify that such publication may
occur only with the prior consent of the Member States,
persons and undertakings concerned.

— The first subparagraph of Article 194(1) EA: the Com-
mission has failed to have regard to the obligation of
confidentiality contained in the first subparagraph of
Article 194(1) EA by allowing third party access to
investment projects notified by the persons and under-
takings concerned, when those projects contain confiden-
tial information that is covered in particular by the trade
secrecy of those persons and undertakings.

(3)
Breach of the principle of legal certainty: under the
contested regulation, the persons or undertakings concerned
are ‘recommended’ not to put the investment project into
effect before the Commission has issued its recommendation
on that project or it is deemed to be in compliance with the
objectives and provisions of the EA Treaty. The Commission
also fails to have regard to the requirement for legal certainty
by providing that, where the Commission has opened a
it ‘shall as far as possible
detailed examination procedure,
endeavour’ to adopt a recommendation within a period of six
months. The persons or undertakings concerned do not
know within what period the Commission will adopt its
recommendation should a detailed examination procedure be
opened.

(1) OJ L 192, 31.7.2003, p. 15.