CELEX: C2003/304/27
Language: en
Date: 2003-12-13 00:00:00
Title: 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)

C 304/18                EN                         Official Journal of the European Union                                         13.12.2003
2.    If the answer to Question 1 is in the negative: must                      —     the Member State of the parent company:
      refusal to accept the document be deemed to have the
      effect in law of rendering the service inoperative in its
      entirety?                                                                       —     subjects a company resident within its territory
                                                                                            to corporation tax on its total profits, including
                                                                                            the profits of branches in other Member States,
3.    If the answer to Question 1 is in the affirmative:                                    with arrangements for the availability of double
                                                                                            taxation relief for those taxes incurred in
      (a)   Within what period of time and in what manner                                   another Member State and under which branch
            must the translation be brought to the attention of                             losses are taken account of in those taxable
            the addressee? Must notification of the translation                             profits;
            satisfy the conditions which the Regulation imposes
            on the service of documents or can the manner of
            dispatch be freely determined?                                            —     does not subject the undistributed profits of
                                                                                            subsidiaries resident in other Member States to
                                                                                            corporation tax;
      (b) Does national procedural law apply in respect of the
            possibility of rectifying the failure?
                                                                                      —     subjects the parent company to corporation
                                                                                            tax on any distributions to it by way of dividend
(1) Council Regulation (EC) No 1348/2000 of 29 May 2000 on the                              by the subsidiaries resident in other Member
    service in the Member States of judicial and extrajudicial docu-                        States while not subjecting the parent company
    ments in civil or commercial matters (OJ 2000 L 160, p. 37).                            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-
Reference for a preliminary ruling by the High Court of                                     dent in other Member States;
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)                        is there a restriction under Article 43 EC, in conjunction
                                                                                with Article 48 EC? If so, is it justified under Community
                                                                                law?
                         (Case C-446/03)
                                                                           2.   (a)   What difference, if any, does it make to the answer
                         (2003/C 304/27)                                              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
Reference has been made to the Court of Justice of the                                against taxable profits in the State of the subsidiary?
European Communities by an order of the High Court of
Justice (England & Wales), Chancery Division, dated 16 July                     (b) If it does make a difference, what significance, if any,
2003, which was received at the Court Registry on 22 October                          is to be attached to the fact that:
2003, for a preliminary ruling in the case of Marks & Spencer
plc and David Halsey (HM Inspector of Taxes) on the following
questions:                                                                            —     a subsidiary resident in another Member State
                                                                                            has now ceased trading and, although there is
1.    In circumstances where:                                                               provision for loss relief subject to certain
                                                                                            conditions in that State, there is no evidence
                                                                                            that in the circumstances such relief was
      —     provisions of a Member State, such as the UK                                    obtained;
            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                        —     a subsidiary resident in another Member State
            setting off losses incurred in other Member States                              has been sold to a third party and, although
            by subsidiary companies which are resident for tax                              there is provision under the law of that State
            purposes in those States, where such set off would                              for the losses to be used under certain con-
            be possible if the losses were incurred by subsidiary                           ditions by a third party purchaser, it is uncertain
            companies resident in the State of the parent                                   whether they were so used in the circumstances
            company;                                                                        of the case;
 ---pagebreak--- 13.12.2003              EN                       Official Journal of the European Union                                         C 304/19
            —    the arrangements under which the Member                 (2)     Breach of the EA Treaty:
                 State of the parent company takes account of
                 the losses of UK resident companies apply
                 regardless of whether the losses are also relieved      —     Article 42 EA: under the procedure established by the
                 in another Member State?                                      contested regulation, the Commission de facto alters the
                                                                               three-month period laid down by this provision of the
      (c)   Would it make any difference if there were evidence                EA Treaty, which the Council alone had the power to
            that relief had been obtained for the losses in the                alter.
            Member State in which the subsidiary was resident
            and, if so, would it matter that the relief was
            obtained subsequently by an unrelated group of               —     Article 43 EA: in adopting the contested regulation, the
            companies to which the subsidiary was sold?                        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
Action brought on 29 October 2003 (fax 24.10.2003) by
                                                                               of investment projects communicated to the Commission
the French Republic against the Commission of the
                                                                               becomes mandatory and automatic in nature, whereas it
                     European Communities
                                                                               is merely optional under this article. Nor does the
                                                                               contested regulation specify that such publication may
                         (Case C-455/03)                                       occur only with the prior consent of the Member States,
                                                                               persons and undertakings concerned.
                         (2003/C 304/28)
                                                                         —     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
An action against the Commission of the European Communi-                      investment projects notified by the persons and under-
ties was brought before the Court of Justice of the European                   takings concerned, when those projects contain confiden-
Communities on 29 October 2003 (fax 24.10.2003) by the                         tial information that is covered in particular by the trade
French Republic, represented by F. Alabrune, G. de Bergues                     secrecy of those persons and undertakings.
and C. Lemaire, acting as Agents, with an address for service
in Luxembourg.
                                                                         (3) Breach of the principle of legal certainty: under the
The French Republic claims that the Court should:                        contested regulation, the persons or undertakings concerned
                                                                         are ‘recommended’ not to put the investment project into
—     annul Commission Regulation (Euratom) No 1352/2003                 effect before the Commission has issued its recommendation
      of 23 July 2003 amending Regulation (EC) No 1209/                  on that project or it is deemed to be in compliance with the
      2000 determining procedures for effecting the communi-             objectives and provisions of the EA Treaty. The Commission
      cations prescribed under Article 41 of the Treaty estab-           also fails to have regard to the requirement for legal certainty
      lishing the European Atomic Energy Community (1);                  by providing that, where the Commission has opened a
                                                                         detailed examination procedure, it ‘shall as far as possible
                                                                         endeavour’ to adopt a recommendation within a period of six
—     order the Commission to pay the costs.                             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.
Pleas in law and main arguments
                                                                         (1) OJ L 192, 31.7.2003, p. 15.
(1) The Commission lacks competence to adopt the contest-
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.