Case C-397/07: Action brought on 27 August 2007 — Commission of the European Communities v Kingdom of Spain
Date: 2007-11-10
Institutions: Court of Justice
Subjects: European Commission, Spain, action for failure to fulfil an obligation, capital transfer, head office, indirect tax, tax exemption, third country

10.11.2007

EN

Official Journal of the European Union

C 269/31

Questions referred

1. Is Article 4(2) of Council Directive 2001/23/EC (1) to be
interpreted as meaning that a Member State must, in a situa-
tion in which an employee has himself given notice to termi-
nate his contract of employment after his working conditions
have become substantially worse following the transfer of a
in its law guarantee the employee the right to
business,
obtain financial compensation from the employer in the
same way as in the case where the employer has unlawfully
terminated the employment contract, having regard to the
fact that the employer has, as permitted by Article 3(3) of
the directive, observed a collective agreement, binding on the
transferor and guaranteeing the employee better working
conditions, only until its expiry and the worsening of the
working conditions arises from that?

2. If the employer's responsibility in accordance with the direc-
tive is not as extensive as described in Question 1, must the
responsibility of the employer nevertheless be implemented
by providing compensation, for example, for pay and other
the notice period to be observed by the
benefits
employer?

for

(1) Council Directive 2001/23/EC of 12 March 2001 on the approxima-
tion of the laws of the Member States relating to the safeguarding of
employees' rights in the event of transfers of undertakings, businesses
or parts of undertakings or businesses OJ L 82, 22 March 2001,
p. 16.

Action brought on 27 August 2007 — Commission of the
European Communities v Kingdom of Spain

(Case C-397/07)

(2007/C 269/54)

Language of the case: Spanish

Parties

Applicant: Commission of the European Communities (repre-
sented by E. Gippini Fournier and M. Afonso, acting as Agents)

Defendant: The Kingdom of Spain

Forms of order sought by the applicant

— Declare that:

— by subjecting the application of obligatory exemptions

from capital duty to certain conditions;

— by imposing an indirect tax on the transfer of the effec-
tive centre of management or the registered office of a
company to Spain, for those companies which have not
been subject to a similar tax in their country of origin;

— by subjecting, to an indirect tax, capital used to carry out
business transactions through a subsidiary or fixed place
of business for companies established in a Member State
which does not apply a similar
to the
Spanish tax,

tax similar

The Kingdom of Spain has failed to fulfil
under Directive 69/335/EEC (1), of 17 July 1969.

its obligations

— Order the Kingdom of Spain to pay the costs.

Pleas in law and main arguments

— Directive 69/335 maintains the status quo regarding the
freedom of Member States to re-introduce a capital duty or
once again to subject transactions, currently exempt, to that
tax. Consequently, Spain cannot abolish its exemptions and
tax all transactions to which the special scheme of Royal
Decree No 4/2004 is applicable, but which are excluded
from the scope of former Article 7(1)(b) and (b)a. Spain
must apply the exemption of Article 45(1)(B)10 to all trans-
actions within the scope of the special scheme of Royal
Decree No 4/2004, whether in fact that scheme applies or
not.

— Article 4 of Directive 69/335 lays down an exhaustive list of
transactions subject
In accordance with
to capital duty.
Article 4(1)(g) the transfer of the effective centre of manage-
ment of a company, firm, association or legal person which
is considered in the host Member State, for the purposes of
charging capital duty, as a capital company, although it is
not so considered in the Member State of origin, is subject
to capital duty. Consequently Spain cannot tax the transfer
of
the effective centre of management or the registered
office of a capital company which is not subject to a similar
tax in its country of origin. The transfer, by a capital
company, of its seat to another Member State is not such as
to generate capital duty, even where the Member State in
which the company was formed did not claim that tax. In
addition, nothing in the Spanish legislation indicates that it
applies solely in cases of tax evasion or fraud.

— Spain cannot subject to capital duty that part of the capital
used to carry out business transactions in Spain through
subsidiaries or fixed places of business. As is clear from
Article 2(1) of Directive 69/335 Spain cannot subject to
capital tax companies whose effective centre of management
in Spain.
is situated in another Member State, and not
Article 2(3) of Directive 69/335 reserves measures, such as
that
to the specific case of a
company whose registered office and effective centre of

to be applied by Spain,

C 269/32

EN

Official Journal of the European Union

10.11.2007

management is in a third country. As regards the issue of
fraud or tax evasion, the Commission emphasises that the
Spanish provisions apply without any limitation or distinc-
tion according to whether there is tax evasion or fraud.
Consequently Spain cannot validly claim such a justification.

(1) Council Directive 69/335/EEC, of 17 July 1969, concerning indirect
taxes on the raising of capital OJ, English Special Edition 1969 (II),
p. 412.

On a proper construction of the reference to ‘decreases in
prices … being made, if any’, is that provision to be interpreted
as meaning that, as well as the general remedy of freezing
the prices of all categories, or certain specific categories, of
medicinal product, another general remedy may be applied
in the form of a reduction in the prices of all categories, and
of certain specific categories, of medicinal product, or must
‘decreases …, if any’ be interpreted as referring exclusively to
the medicinal products which are already subject to the price
freeze?

2. In requiring the competent authorities of a Member State to
verify, at least once a year,
in the case of price freezes,
whether the macroeconomic conditions justify continuing
that price freeze, may Article 4(1) [of Directive 89/105/EC]
be interpreted as meaning that, if the reply to Question I is
that a price reduction is permissible, it is possible to have
recourse to such a measure even more than once in the
course of a single year, and to do that again for many years
(from 2002 until 2010)?

3. Under the terms of Article 4 [of Directive 89/105/EC] —
read in the light of the preamble emphasising that the prin-
cipal aim of measures controlling the prices of medicinal
products is ‘the promotion of public health by ensuring the avail-
ability of adequate supplies of medicinal products at a reasonable
cost’ and preventing ‘disparities in such measures [which] may
hinder or distort intra-Community trade in medicinal products’ —
is it compatible with the Community rules to adopt measures
which refer to economic values attributed to that expenditure
on the basis of ‘predictions’ rather than values which have
been ‘ascertained’ (this question relates to both situations)?

4. Must the requirements relating to compliance with the ceil-
ings for pharmaceutical expenditure which each Member
State is competent to determine be linked, point by point, to
pharmaceutical expenditure alone, or is it within the powers
of the Member States to take account also of data relating to
other health expenditure?

5. Must

the principles,

to be inferred from … Directive
[89/105/EC], of transparency and of shared participation on
the part of the undertakings with an interest in measures
freezing the prices of pharmaceutical products or reducing
them across the board be interpreted as requiring provision
to be made, always and in any circumstances, for the possibi-
lity of derogation from the price imposed (Article 4(2) [of
Directive 89/105/EC]) and for genuine participation by the
applicant company, with the consequent need for the admin-
istrative authorities to state the reasons for any refusal?

(1) Council Directive 89/105/EEC of 21 December 1988 relating to the
transparency of measures
regulating the pricing of medicinal
products for human use and their inclusion in the scope of national
health insurance systems (OJ L 40, 11.2.1989, p. 8).

Reference for a preliminary ruling from the Tribunale
Amministrativo Regionale del Lazio (Italy)
lodged on
29 August 2007 — S.A.L.F. Spa v Agenzia Italiana del
Farmaco (AIFA) and Ministero della Salute

(Case C-400/07)

(2007/C 269/55)

Language of the case: Italian

Referring court

Tribunale Amministrativo Regionale del Lazio

Parties to the main proceedings

Applicant: S.A.L.F. Spa

Defendants: Agenzia Italiana del Farmaco (AIFA), Ministero della
Salute

Question referred

the

1. After the provisions contained in Articles 2 and 3 (1) [of
Directive 89/105/EC] which modulate
relationship
between the public authorities of a Member State and the
pharmaceutical companies — by allowing the pricing of a
medicinal product or the raising of its price to be determined
on the basis of information provided by the [latter], but only
in so far as is acceptable to the competent authority, and
thus on the basis of dialogue between the undertakings
themselves and the authorities competent to supervise phar-
maceutical expenditure — Article 4(1) [of that Directive]
concerning ‘price freeze[s] imposed on all medicinal products or
on certain categories of medicinal products’ characterises a price
freeze as a general instrument, the continuing use of which
is conditional upon a review which must be carried out, at
least once a year, with reference to the macro-economic
conditions existing in the Member State in question.

That provision allows the competent authorities a period of
90 days in which to take a final decision, requiring them, on
expiry of
increases or
decreases in prices are being made, if any.

to announce what

that period,