Case C-533/24, Vermilion Energy Ireland e.a.: Reference for a preliminary ruling from High Court (Ireland) made on 1 August 2024 – Vermilion Energy Ireland Ltd, Vermilion Exploration and Production Ireland Ltd, Vermilion Energy Corrib Ireland Ltd v The Minister for the Environment, Climate and Communications, Ireland, The Attorney General
Date: 2024-08-01
Institutions: Court of Justice
Subjects: Ireland, civil liability, competition law, corporation tax, direct tax, legal basis, price of energy, principle of legal certainty, principle of proportionality, retroactivity of a law








C_202406632EN.000101.fmx.xml












Official Journal of the European Union


EN
C series













C/2024/6632


11.11.2024






Reference for a preliminary ruling from High Court (Ireland) made on 1 August 2024 – Vermilion Energy Ireland Ltd, Vermilion Exploration and Production Ireland Ltd, Vermilion Energy Corrib Ireland Ltd v The Minister for the Environment, Climate and Communications, Ireland, The Attorney General


(Case C-533/24, Vermilion Energy Ireland e.a.)

(C/2024/6632)
Language of the case: English

Referring court

High Court

Parties to the main proceedings


Applicants: Vermilion Energy Ireland Ltd, Vermilion Exploration and Production Ireland Ltd, Vermilion Energy Corrib Ireland Ltd

Defendants: The Minister for the Environment, Climate and Communications, Ireland, The Attorney General

Questions referred







1.


Does Article 122 TFEU afford a valid legal basis for Chapter III of the Regulation [2022/1854] (1)? If not, is Chapter III invalid by virtue of the Regulation having been






a)


adopted on an invalid legal basis and/or










b)


not in compliance with the requirements of Article 122 TFEU and / or










c)


in contravention of the principle of conferral of competence provisions of the TEU and / or










d)


in contravention of the requirement for unanimity of voting within the EU Council for the adoption of measures concerning direct taxation and / or fiscal measures?














2.


Does Chapter III of the Regulation [2022/1854], and in particular Article 14 and Article 15 thereof, in providing that the Temporary Solidarity Contribution thereunder applies to fiscal years 2022 and / or 2023, fail to comport with the general principles of legal certainty and / or non-retroactivity and / or the principle of proportionality, such that Chapter III is invalid and/or in particular Articles 14 and / or 15 thereof?










3.


Is Chapter III of the Regulation [2022/1854], and in particular Articles 14 and / or 15 thereof, in the introduction of the Temporary Solidarity Contribution, invalid by reason of interfering with the Plaintiffs’ rights guaranteed under Articles 16 and / or 17 of the Charter of Fundamental Rights of the European Union?










4.


Where a national court is asked to decide whether the Act (2) is incompatible with the EU law general principles of legal certainty and / or non-retroactivity because it imposes a Temporary Solidarity Contribution for the years 2022 and 2023 by reference to the definition of ‘chargeable period’ (defined in section 2 of the Act as ‘the 12 month period commencing on 1 January in each of the years 2022 and 2023’), what factors are relevant to assessing the validity of the Act with reference to the above principles of EU law, and what relevance (if any) do the following factors have (noting that the facts remain to be determined by the referring court)?






a)


The fact that the Regulation [2022/1854] was published on 7 October 2022, and came into effect next day,










b)


the fact that at the time the Regulation came into effect the year 2022 had not yet ended and 2023 had not begun,










c)


the fact that some (but not all) of the operations which generated profits for the Plaintiffs in 2022 had been completed when the Regulation came into effect,










d)


the fact that the Regulation requires Member States to impose a Temporary Solidarity Contribution or equivalent measures in relation to the years 2022 and / or 2023,










e)


the fact that the Act was signed into law on 17 July 2023 and applied from 2 August 2023,










f)


the fact that the Act imposes a civil liability only,










g)


the fact that Ireland has clear obligations under the Regulation,










h)


the justification advanced by Ireland for its definition of the ‘chargeable period’,










i)


the fact that a related company to the Plaintiffs represented to Ireland’s national competition law enforcement authority that it viewed increasing its working interest in the Corrib gas field to be an ‘attractive investment’ after the adoption of the Regulation and after the announcement of the Government of Ireland measures to implement the Temporary Solidarity Contribution, and/ or










j)


any other factor, and if so what factor?














5.


Where the Plaintiffs contend that the obligation to pay the Temporary Solidarity Contribution breached their rights under Articles 16 and 17 of the Charter of Fundamental Rights of the European Union (or either of them) and / or the principle of proportionality including as set out in Recitals 54 and / or 55 of the Regulation [2022/1854], in particular because of:






a)


the imposition of a rate of 75 % under Section 4(2) of the Act, and / or










b)


the manner in which the Act legislated for the treatment of losses in previous fiscal years,
what factors are relevant to a national court deciding on whether the Act is compatible with the above provisions of EU law, what relevance (if any) should be given to the following factors (noting that the facts remain to be determined by the referring court)?






a)


The fact that energy prices have risen considerably in Ireland and other Member States,










b)


the contention (made by the Defendants but disputed by the Plaintiffs) that this has caused hardship to consumers and businesses in Ireland, which the Defendants have addressed at a cost of c. €4.5 billion in assisting consumers and businesses,










c)


the contention (made by the Defendants but disputed by the Plaintiffs) that the Plaintiffs have made significant profits in 2022 and 2023 due to a general increase in the price of energy, rather than due to additional investment or improved efficiency and / or development/implementation of new product features for which customers would pay an enhanced price,










d)


the fact that profits have exceeded 120 % of the average profits in the previous four years,










e)


the fact that the Regulation requires Member States to impose a Temporary Solidarity Contribution or equivalent measures on such profits,










f)


the fact that where Member States impose a Temporary Solidarity Contribution, the Regulation fixes a minimum rate of 33 % but no maximum rate,










g)


the fact that Ireland set a rate of 75 % (applicable to that proportion of the profits which exceed 120 % of the average profits in the previous four years),










h)


the fact that the Plaintiffs have paid approximately €99 million by way of Temporary Solidarity Contribution in respect of 2022,










i)


the fact that the Plaintiffs expect to pay approximately €40 million by way of Temporary Solidarity Contribution in respect of 2023,










j)


the fact that the returns from the Temporary Solidarity Contribution are applied to the costs of the measures adopted by the Defendants to assist consumers and businesses with the increased energy prices,










k)


the fact that it was considered appropriate by the Union legislature and / or the Irish legislature that companies enjoying supra-normal profits should make a reasonable contribution to the costs incurred in supporting consumers and businesses,










l)


the fact that the Plaintiffs assert that they did not expect to have a tax liability under Irish corporation tax in respect of 2022 or 2023 due to accumulated losses in previous tax years (noting that, as with all factual matters and contentions which have not been expressly stated to be agreed, the national court will determine whether this assertion and its reasonableness are proven),










m)


the fact that Article 16(1) of the Regulation [2022/1854] provides that ‘the temporary solidarity contribution shall apply in addition to the regular taxes and levies applicable according to the national law of a Member State’,










n)


the fact that the Act does not permit losses in years prior to 2018 to be taken into account in determining the profits which are subject to the temporary solidarity contribution,










o)


the fact that a related company to the Plaintiffs represented to Ireland’s national competition law enforcement authority that it viewed increasing its working interest in the Corrib gas field to be an ‘attractive investment’ after the adoption of the Regulation and after the announcement of the Government of Ireland measures to implement the Temporary Solidarity Contribution, and / or










p)


any other factor, and if so what other factor?














(1)  Council Regulation (EU) 2022/1854 of 6 October 2022 on an emergency intervention to address high energy prices (OJ 2022, L 261I, p. 1).

(2)  Energy (Windfall Gains in the Energy Sector) (Temporary Solidarity Contribution) Act 2023


ELI: http://data.europa.eu/eli/C/2024/6632/oj
ISSN 1977-091X (electronic edition)