Case C-383/10: Action brought on 30 July 2010 — European Commission v Kingdom of Belgium
Date: 2010-07-30
Institutions: Court of Justice
Subjects: Belgium, action for failure to fulfil an obligation, central bank, joint competence, tax exemption, tax inspection, tax system








C_2010274EN.01001302.xml










9.10.2010   


EN


Official Journal of the European Union


C 274/13





Action brought on 30 July 2010 — European Commission v Kingdom of Belgium
(Case C-383/10)
()
2010/C 274/20
Language of the case: French

Parties


Applicant: European Commission (represented by: R. Lyal and F. Dintilhac, Agents)

Defendant: Kingdom of Belgium

Form of order sought







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declare that, by introducing and maintaining a system of discriminatory taxation of interest payments by non-resident banks, by applying a tax exemption only to interest payments by Belgian banks, the Kingdom of Belgium has failed to fulfil its obligations under Articles 56 and 63 of the Treaty on the Functioning of the European Union (ex Articles 49 and 56 respectively of the EC Treaty) and Articles 36 and 40 of the Agreement on the European Economic Area;










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order the Kingdom of Belgium to pay the costs.





Pleas in law and main arguments

The Commission criticises the national provisions at issue inasmuch as they have the effect of discouraging Belgian residents from using the services of banks established in other Member States of the European Union, as the interest paid by such banks cannot benefit from a tax exemption applicable only to interest paid by Belgian banks.
As a preliminary issue, the Commission rejects, in particular, the defendant’s argument that direct taxation is an exclusive competence of Member States and makes clear that this area is implicitly but necessarily included in the competence relating to the internal market and therefore constitutes a shared competence between the European Union and the Member States.
In response to the objections raised by the Belgian authorities, the Commission submits, first of all, that the absence of a complaint brought on this matter by the financial sector has no relevance since an action seeking a declaration of a failure to fulfil obligations is objective and so cannot be subject to there being a complaint. Second and third, the Commission does not agree, first, with the argument that the aforementioned measures are justified by the overriding reason relating to the public interest in ensuring the effectiveness of fiscal supervision and second, with the claim that the legislation at issue is a socio-political measure that protects the public interest. In the fourth place, the applicant rejects the justification of the Belgian authorities relating to the limited effectiveness of extending this exemption and contends that the group of taxpayers to which this measure applies could also be interested by the services of banks established in other Member States. In the fifth place, the Commission challenges the defendant’s argument relating to the disparities existing in the European Union as regards consumer where a bank fails and recalls the fact that this area is subject to European Union harmonisation. Finally, the Commission invokes the fact that Belgium has three official languages (Dutch, French and German) and that the objections raised, relating to the risk of inadequate information because of the use of a language that is not spoken in Belgium by a bank established outside Belgium, are not justified.