CELEX: 62004CC0290
Language: en
Date: 2006-05-16 00:00:00
Title: Opinion of Mr Advocate General Léger delivered on 16 May 2006. # FKP Scorpio Konzertproduktionen GmbH v Finanzamt Hamburg-Eimsbüttel. # Reference for a preliminary ruling: Bundesfinanzhof - Germany. # Article 59 of the EEC Treaty (later Article 59 of the EC Treaty, now, after amendment, Article 49 EC) and Article 60 of the EEC Treaty (later Article 60 of the EC Treaty, now Article 50 EC) - Tax legislation - Income tax - Provision of services by a non-resident in the context of artistic performances - Principle of retention of tax at source - Provider of services not possessing the nationality of a Member State. # Case C-290/04.

OPINION OF ADVOCATE GENERAL
      LÉGER
      delivered on 16 May 2006 1(1)
      
      Case C-290/04
      FKP Scorpio Konzertproduktionen GmbH
      v
      Finanzamt Hamburg-Eimsbüttel
      (Reference for a preliminary ruling from the Bundesfinanzhof (Germany))
      (Tax law – Income tax – Article 59 of the EEC Treaty (later Article 59 of the EC Treaty, now, after amendment, Article 49 EC) and Article 60 of the
         EEC Treaty (later Article 60 of the EC Treaty, now Article 50 EC) – Provision of services in connection with artistic activities – Obligation on a recipient of services to make a retention at source of tax on a payment made to a non-resident service provider
         – Non-deductibility of business expenses at the time of retaining tax at source – Exemption under a double taxation convention – Effect of the nationality of the service provider)
      1.        By this reference for a preliminary ruling, the Bundesfinanzhof (Federal Finance Court, Germany) asks the Court to examine,
         with regard to the EC Treaty rules on freedom to provide services, certain provisions of German tax law relating to tax on
         the income of non-resident service providers engaged in activity in Germany in connection with musical performances.
      
      2.        This case raises in particular the issue of the compatibility with Article 59 of the EEC Treaty (later Article 59 of the EC
         Treaty, now, after amendment, Article 49 EC) and Article 60 of the EEC Treaty (later Article 60 of the EC Treaty, now Article
         50 EC) (2) of both the procedure for collecting tax by retention at source which is applicable in that situation and certain rules for
         implementing that procedure.
      
      I –  National legislation
      3.        Under Paragraph 1(4) of the German law on income tax (Einkommensteuergesetz) of 1990 (3) in force at the time of the facts in the main proceedings, natural persons who do not have their permanent or ordinary residence
         in Germany – apart from exceptions not arising in this case – have partial liability to income tax where they receive income
         in Germany within the meaning of Paragraph 49 of the EStG. Such income covers income from cultural, sporting, artistic or
         similar performances in Germany, including income from other services provided in connection therewith, irrespective of whom
         that income is paid to. (4)
      
      4.        In the case of persons with partial liability to tax, income tax is collected by way of retention at source, pursuant to Paragraph
         50a(4)(1) of the EStG. It amounts to 15% of the receipts. The total amount of receipts is subject to this retention at source
         and  deductionsfor such items as business expenses and special expenses are not permitted. (5)
      
      5.        The income tax must be paid at the time payment is made to the payment creditor. At that point in time a payment debtor must
         make a retention of tax at source on behalf of a payment creditor with partial liability to tax, since he is considered to
         be the person liable for the tax (tax debtor). (6)
      
      6.        The payment debtor must pay the competent Finanzamt (Tax Office) the tax retained during a calendar quarter by the 10th day
         of the month following that quarter. That person is responsible for retaining and paying the tax. (7)
      
      7.        Apart from exceptions not applying in this case, the tax on the income of persons with partial liability to tax is deemed
         to have been paid by means of the retention at source. (8)
      
      8.        Paragraph 50d lays down certain special rules where a convention for the avoidance of double taxation applies.
      
      9.        Accordingly, it is provided that if income which is liable to retention of tax at source under Paragraph 50a is not taxable
         or is taxable only at a lower rate under a convention for the avoidance of double taxation, the provisions concerning the
         retention, payment and declaration of the tax by the payment debtor must nevertheless be applied without prejudice to that
         convention. In such cases, the entitlement of the payment creditor to obtain a full or partial refund of the tax retained
         and paid is not affected. (9)
      
      10.      However, the debtor is permitted, under a convention of that type, not to make the retention at source or to make it at a
         lower level of tax if the Bundesamt für Finanzen (Federal Finance Office) (10) certifies, upon application, that the conditions laid down to that effect are satisfied (exemption procedure). (11) In the absence of a certificate of exemption issued by the BfF, the payment debtor is therefore bound to retain tax at source.
      
      11.      Also, where proceedings for liability are brought against the debtor for non-retention of tax at source, he is barred in those
         proceedings from relying on the rights of the payment creditor under a convention for the avoidance of double taxation. (12)
      
      12.      I should like to make clear that, according to the information supplied by the national court, the income derived from artistic
         services which is at issue in the main proceedings was not taxable in Germany, only in the Netherlands, under the convention
         between those two Member States for the prevention of double taxation. (13)
      
      13.      Lastly, it is appropriate to describe by way of comparison the situation of a service provider who has his permanent or ordinary
         residence in Germany and is therefore wholly liable to income tax in that Member State.
      
      14.      That service provider is subject to the general obligation to submit a tax return as part of the procedure for the assessment
         of income tax. There is no obligation for the debtor of the payment made to that service provider to make a retention of tax
         at source and so he can incur no liability for non‑retention of tax. Nor is the payment debtor liable for the income tax owed
         by the payment creditor.
      
      II –  Facts and procedure in the main proceedings
      15.      FKP Scorpio Konzertproduktionen GmbH (‘Scorpio’) is a company which organises concerts, with its registered office and central
         management in Germany. In 1993, it entered into a contract with a partner who signed under the name ‘Europop’, who made a
         group of musicians available to it. Europop is a natural person who at that time was established in the Netherlands and did
         not have his permanent or ordinary residence in Germany, nor did he maintain an establishment there. The national court states
         that it does not know Europop’s nationality.
      
      16.      In the first and third quarters of 1993, Scorpio paid Europop a total of DEM 438 600 for the services he provided. Scorpio
         failed to make the retention of tax at source from that amount provided for in Paragraph 50a(4)(1) of the EStG, even though
         Europop had not produced the exemption certificate mentioned in Paragraph 50d(3) of the EStG.
      
      17.      After it learned of those facts, the competent tax authority declared Scorpio liable and demanded, by a tax assessment notice
         of 21 March 1997, payment of DEM 70 395.30, being the amount of tax which Scorpio should have retained at source from the
         payment made to Europop, equivalent to 15% of the gross payment.
      
      18.      The objection made by Scorpio to the Finanzamt Hamburg-Eimsbüttel against that assessment notice was rejected. The Finanzgericht,
         to which the appellant subsequently turned, did not grant its application either, since it found that Scorpio had still not
         produced an exemption certificate from the BfF, contrary to what is required under Paragraph 50d(3) of the EStG. 
      
      19.      Scorpio lodged an appeal on a point of law before the Bundesfinanzhof, claiming that the judgment of the Finanzgericht should
         be set aside and that the tax assessment notice should be annulled.
      
      20.      In support of its appeal, the appellant on a point of law puts forward in essence the following arguments.
      
      21.      First, Paragraph 50a(4), sixth sentence, of the EStG, in so far as it excludes the deduction of business expenses from the
         amount from which tax is retained at source, infringes Articles 59 and 60 of the Treaty. That follows from the judgment in
         Gerritse. (14) According to the appellant on a point of law, the Court held in that case that business expenses should be allowed in reduction
         of tax under the procedure for tax retention at source and not only in a subsequent refund procedure.
      
      22.      Secondly, Paragraph 50d(1), fourth sentence, of the EStG, which bars the appellant as the party which may be held liable pursuant
         to Paragraph 50a(5), fifth sentence, of the EStG from relying on the tax exemption to which the payment creditor – in this
         case Europop – is entitled under the double taxation convention, is also contrary to the Treaty.
      
      III –  The reference for a preliminary ruling
      23.      The Bundesfinanzhof is uncertain, in the light of the facts and law thus described, as to the interpretation of Articles 59
         and 60 of the Treaty. 
      
      24.      First it maintains that the Court, in Gerritse, did not give a ruling on whether levying tax by way of a retention at source calculated on the basis of gross income and
         the liability rule supporting that procedure also constitute indirect discrimination contrary to Articles 59 and 60 of the
         Treaty even if the non-resident is afforded the opportunity, in a procedure subsequent to the tax retention at source, to
         be taxed on the basis of his net income in Germany, and thus obtain a refund of any difference between the amount of that
         tax and the amount of tax retained at source. With regard to that refund procedure, the national court refers to a letter
         from the Federal Ministry of Finance of 3 November 2003.
      
      25.      With regard to the levying of tax by way of retention at source and the risk of liability being incurred by the party required
         to make the retention, the Bundesfinanzhof notes that these may place non-resident service providers in a less advantageous
         position than resident service providers and may thus constitute indirect discrimination prohibited under Articles 59 and
         60 of the Treaty. According to that court, retention of tax at source may, for example, lead to liquidity problems for a non-resident,
         whereas a resident’s business receipts are not as a rule subject to such a retention. Retention at source also entails the
         risk for non-residents that they may not be able to obtain a tax refund pursuant to Paragraph 50d(1), second sentence, of
         the EStG if the payment debtor has not paid over to the tax authority the tax which he has retained.
      
      26.      The national court also notes that the payment debtor’s obligation to retain tax and his risk of being held liable for non-retention
         or insufficient retention of tax constitute competitive disadvantages for non-resident service providers since they may induce
         recipients of such services to employ the services of residents instead of obtaining equivalent services from non-residents.
         Recipients of services would thereby avoid the costs and risks associated with retention of tax at source.
      
      27.      The national court infers from this that the procedure of retention of tax at source and the associated liability rule may
         make provision of services between Member States more difficult than provision of services within one Member State, and thereby
         run counter to the objective of Article 59 of the Treaty.
      
      28.      According to that court, however, the disadvantages for non-resident service providers and the burdens for the payment debtor
         which are entailed by the procedure of retention at source and the liability rule may nevertheless be justified.
      
      29.      The Bundesfinanzhof notes in that regard that the procedure and rule in question are legitimate and appropriate methods for
         the tax treatment of non-resident service providers in respect of their income in Germany and for avoiding non-taxation of
         income in that Member State and in the State in which the service provider is established. In its view, it should also be
         borne in mind that, before the amendment of Directive 76/308/EEC (15) by Directive 2001/44/EC (16) and the entry into force on 23 June 2001 of the convention of 21 May 1999 between the Federal Republic of Germany and the
         Kingdom of the Netherlands on mutual administrative assistance for the recovery of tax claims and the disclosure of documents, (17) the Kingdom of the Netherlands was not obliged, in cases such as this, to recover German income tax claims.
      
      30.      Moreover, according to the national court, the assessment of income tax levied by way of retention at source on the basis
         of gross income, subject to a subsequent refund procedure on application by the non-resident service provider, does not infringe
         Articles 59 and 60 of the Treaty. The payment creditor does not as a rule inform the payment debtor, who is obliged to make
         the retention at source, of the amount of his business expenses, in particular so as not to reveal the bases for his cost
         calculations and his profit margin or any other business secrets. The Bundesfinanzhof considers therefore that if the non-resident
         service provider were required to inform the customer of the expenses economically connected with his service, so that the
         tax to be retained at source could be assessed on the basis of net income, cross-border provision of services would be made
         considerably more difficult.
      
      31.      The national court also raises the question whether indirect discrimination contrary to Articles 59 and 60 of the Treaty exists
         where, under a double taxation convention, a non-resident service provider can obtain, or could have obtained if he had submitted
         an application in due time, an exemption from the tax retention at source or a refund of the tax retained at source in accordance
         with the relevant provisions of German tax law.
      
      32.      Lastly, the national court states that the outcome of the main proceedings could hinge on whether Europop was or was not a
         national of a Member State during the year in question. It refers in particular to the case-law of the Court according to
         which Article 59 of the Treaty confers rights not only on the provider of services but also on the recipient. (18) The view taken in the legal literature on this question is that this ‘passive’ freedom to provide services does not require
         the provider of services to be a national of a Member State.
      
      33.      In the light of the provision contained in the second paragraph of Article 59 of the Treaty, the national court considers
         it doubtful whether that interpretation of the Treaty is correct.
      
      34.      It was in those circumstances that the Bundesfinanzhof decided to stay the proceedings and refer the following questions to
         the Court for a preliminary ruling:
      
      ‘(1)      Must Articles 59 and 60 of the [EEC] Treaty be interpreted as meaning that they are infringed if a payment debtor established
         in Germany of a payment creditor established in another State of the European Union (in this case: in the Netherlands), who
         holds the nationality of a Member State, can be held liable under Paragraph 50a(5), fifth sentence, of the [EStG] because
         he has failed to retain tax at source pursuant to Paragraph 50a(4) of the EStG, whereas payments to a payment creditor who
         is wholly liable to income tax in Germany (a German) are not subject to any retention of tax at source pursuant to Paragraph
         50a(4) of the EStG and therefore no liability of the payment debtor for not making a retention or not making a sufficient
         retention of tax at source can arise?
      
      (2)      Is the answer to Question 1 different if, at the time of providing his service, the payment creditor established in another
         State of the European Union is not a national of a Member State?
      
      (3)      If the answer to Question 1 is in the negative: 
      (a)      Are Articles 59 and 60 of the [EEC] Treaty to be interpreted as meaning that business expenses incurred by a payment creditor
         established in another State of the European Union and economically connected with his activities in Germany giving rise to
         the payments must be taken into account in reduction of tax by the payment debtor at the time of retaining tax at source pursuant
         to Paragraph 50a(4) of the EStG because Germans too are subject to income tax only on the net income remaining after retention
         of business expenses?
      
      (b)      Is it sufficient for the purpose of avoiding an infringement of Articles 59 and 60 of the [EEC] Treaty if, in retaining tax
         at source pursuant to Paragraph 50a(4) of the EStG, only the business expenses economically connected with the activity in
         Germany giving rise to the claim for payment and which the payment creditor established in another State of the European Union
         has reported to the payment debtor are taken into account in reduction of tax, and any further business expenses can be taken
         into account in a subsequent refund procedure?
      
      (c)       Are Articles 59 and 60 of the [EEC] Treaty to be interpreted as meaning that they are infringed if the tax exemption to which
         a payment creditor established in the Netherlands is entitled in Germany under the double taxation convention between the
         Federal Republic of Germany and the Kingdom of the Netherlands is initially disregarded in the retention of tax at source
         pursuant to Paragraph 50a(4) in conjunction with Paragraph 50d(1) of the EStG and only allowed in a subsequent procedure for
         exemption or refund and the payment debtor is likewise not entitled to rely on the tax exemption in proceedings concerning
         liability, whereas Germans’ tax-free income is not subject to any retention of tax and therefore no liability for non‑retention
         or insufficient retention of tax at source can arise either?
      
      (d)       Are the answers to Question 3(a) to (c) different if the payment creditor established in another State of the European Union
         is not a national of a Member State at the time of providing his service?’
      
      35.      The national court explains, in essence, that the answers to these questions will enable it to ascertain whether or not the
         liability proceedings brought against the appellant in the main proceedings for failing to retain tax at source infringe Community
         law and, if not, what the extent of the appellant’s liability is.
      
      IV –  Analysis
      A –    Question 1
      36.      By its first question, the Bundesfinanzhof is seeking a ruling from the Court on whether Articles 59 and 60 of the Treaty
         must be interpreted as meaning that they preclude a national law under which, in connection with the cross-border provision
         of a service, a recipient of services established in one Member State can be held liable in that Member State because he has
         failed to retain at source the tax on a payment made to a service provider residing in another Member State in consideration
         for that service, whereas payments to a service provider residing in the first State would not be subject to such a retention
         and therefore no liability of the payment debtor, the recipient of services, for failing to retain tax at source can arise.
      
      37.      The national court therefore requests the Court to rule, in the light of the Treaty rules on freedom to provide services,
         both on the application to non-resident service providers of a procedure for retaining income tax at source and on its corollary,
         namely the liability that may be incurred by a recipient of services if he fails to make such a retention at source on a payment
         made to a service provider.
      
      38.      All the parties which submitted observations in these proceedings, namely Scorpio, the Federal Republic of Germany, the Kingdom
         of Belgium, the Kingdom of Spain, the Italian Republic, the United Kingdom of Great Britain and Northern Ireland, and the
         Commission of the European Communities, propose that the answer to the first question should be negative. 
      
      39.      I am also of the view that Articles 59 and 60 of the Treaty do not preclude either the principle of collection by means of
         retention at source of tax owed by a non-resident service provider or the potential liability of a recipient of services for
         failing to retain tax at source.
      
      40.      As regards the potential existence of a restriction on freedom to provide services, it is appropriate to recall that the Court
         has consistently held that ‘although direct taxation falls within their competence, Member States must none the less exercise
         that competence consistently with Community law’. (19)
      
      41.      In the view of the Court, Article 59 of the Treaty ‘precludes the application of any national legislation which without objective
         justification impedes a provider of services from actually exercising that freedom’. (20) Also, in the perspective of a single market and in order to permit the realisation of its objectives, Article 59 of the Treaty
         also precludes the application of any national legislation which has the effect of making the provision of services between
         Member States more difficult than the provision of services purely within one Member State. (21)
      
      42.      Also, under the last paragraph of Article 60 of the Treaty, ‘… the person providing a service may, in order to do so, temporarily
         pursue his activity in the State where the service is provided, under the same conditions as are imposed by that State on
         its own nationals’.
      
      43.      The provisions of national tax law which are at issue in the present case concern the procedure for the collection of income
         tax which is applied in the case of payment received by a service provider who does not reside in Germany. I would point out
         in that regard that the Court has been required to consider on a number of occasions, with regard to the Treaty rules relating
         to freedom of movement for workers, procedures applying to non-resident taxpayers with regard to income tax. (22) In my view, there is nothing to prevent the same from applying with regard to freedom to provide services.
      
      44.      In the present case, it must be stated that under the national tax law there is a difference in treatment between resident
         and non-resident service providers with regard to the procedure applying to them in respect of collection of income tax. Whereas
         service providers residing in Germany are taxed on their incomes at the end of each year as part of the procedure for the
         assessment of income tax, those not residing in that Member State have tax retained at source there from their payments.
      
      45.      Non-resident service providers may, as a result of this difference in treatment, be placed in a less advantageous position
         than residents, to the extent, in particular, that the former are deprived of a cash flow advantage in relation to the latter.
         Non-resident service providers might then be deterred from carrying out their activities in Germany.
      
      46.      In addition, the difference in treatment which exists as regards the collection of tax may be a factor that encourages a recipient
         of services to approach a service provider residing in Germany rather than a service provider residing in another Member State.
         It is likely that some recipients of services, the payment debtors, will prefer to avoid placing themselves in a situation
         in which they have to bear the expense and administrative constraints associated with the collection of tax by retention at
         source and in which they risk incurring liability for non-retention or insufficient retention of tax at source.
      
      47.      However, the difference in treatment established by the German tax legislation does not, as such, appear to me to infringe
         Articles 59 and 60 of the Treaty in so far as, on the one hand, resident and non-resident service providers are in an objectively
         different situation with regard to the requirements concerning the collection of tax and, on the other hand, the procedure
         for retaining tax at source applying to non-resident service providers is justified by the need to ensure that income tax
         is collected effectively.
      
      48.      As the national court has noted, and as Scorpio considers, (23) it is necessary in that regard to take into account the difficulty which existed at the relevant time, that is to say in
         1993, for a Member State of taxation to recover a tax claim in another Member State, given the legal instruments which were
         in force at that time. It was only with Directive 2001/44 that the scope of the mutual assistance for the recovery of tax
         claims introduced by Directive 76/308 was extended to income tax claims. In addition, the double taxation convention did not
         apply during the period at issue to mutual administrative assistance for the recovery of tax claims because the two States
         did not conclude a convention on that matter until May 1999.
      
      49.      Therefore, as regards the income tax payable by a non-resident service provider in respect of the period at issue, I consider
         that recourse to the technique of retention of tax at source was justified by the need to ensure the tax was collected effectively,
         and represented a proportionate means of collecting the tax debts of the State of taxation.
      
      50.      The same applies, in my view, with regard to the possibility of a recipient of services who is required to make such a retention
         incurring liability, which would, where necessary, make it possible to penalise non-retention at source. In so far as such
         liability constitutes the corollary of that method of collecting income tax, it also contributes, in a proportionate way,
         to ensuring the tax is collected effectively.
      
      51.      In my view, therefore, it follows from the above considerations that, in the case of income tax payable in respect of the
         period at issue, Articles 59 and 60 of the Treaty must be interpreted as not precluding a national law under which, in connection
         with the cross-border provision of a service, a recipient of services established in one Member State can be held liable in
         that State because he has failed to retain at source the tax on a payment made to a service provider residing in another Member
         State in consideration for that service, whereas payments made to a service provider residing in the first State would not
         be subject to such a retention and therefore no liability of the payment debtor, the recipient of services, for non-retention
         of tax at source could arise.
      
      52.      In view of the negative answer I propose for the first question, there is no need to answer the second question.
      
      53.      It is appropriate to consider now whether certain detailed rules relating to retention at source, as laid down in the German
         tax law, comply with the provisions of Articles 59 and 60 of the Treaty. That is the subject of Question 3(a).
      
      B –    Question 3(a)
      54.      By this question, the Bundesfinanzhof is seeking a ruling from the Court on whether Articles 59 and 60 of the Treaty must
         be interpreted as precluding a national tax law under which the debtor of a payment made to a non-resident service provider
         cannot, when retaining tax at source, deduct from taxable income the business expenses of that service provider which are
         economically connected with his activities in the State in which the service is provided, whereas a service provider residing
         in the first State would be taxed only on his net income, that is to say, after retention of business expenses.
      
      55.      In order to answer that question, it is first necessary to understand clearly the contribution made by the judgment in Gerritse with regard to the deductibility of business expenses.
      
      56.      In that case, Mr Gerritse, a Netherlands national residing in the Netherlands, had received in 1996 payment for performing
         as a drummer at a radio station in Berlin. That payment had been subject to income tax, at a rate of 25%, collected by means
         of retention at source. Before the Court, Mr Gerritse and the Commission contended in particular that in the case of self-employed
         persons who were wholly taxable, only the ‘profit’ was subject to income tax, business expenses being generally excluded from
         the basis of assessment, whereas in the case of persons with partial liability to tax the tax of 25% was levied on ‘receipts’,
         business expenses being non-deductible. (24) Mr Gerritse had also argued that the contested provisions of the German tax law had serious consequences for non-resident
         artists on tour in Germany, whose business expenses were often very high.
      
      57.      In its judgment, the Court held that ‘a national provision which, in matters of taxation, refuses to allow non-residents to
         deduct business expenses, whereas residents are allowed to do so, risks operating mainly to the detriment of nationals of
         other Member States and therefore constitutes indirect discrimination on grounds of nationality, contrary in principle to
         Articles 59 and 60 of the Treaty’. (25)
      
      58.      In order to arrive at that finding, the Court had to satisfy itself that the situations of residents and non-residents were
         comparable with regard to the possibility of deducting business expenses. From that point of view, it held that ‘the business
         expenses in question are directly linked to the activity that generated the taxable income in Germany, so that residents and
         non-residents are placed in a comparable situation in that respect’. (26)
      
      59.      The criterion for comparability between residents and non-residents lies here in the idea that, in the case of income obtained
         from carrying on the same business activity in Germany, both categories of taxpayer experience, in the same way, a cut in
         that income as a result of the business expenses they have had to incur directly in connection with the activity in question.
         In so far as there is no objective difference between them from that point of view, applying different treatment to them as
         regards the possibility of deducting such expenses constitutes indirect discrimination on grounds of nationality contrary
         to Articles 59 and 60 of the Treaty.
      
      60.      The Court therefore acknowledged that resident and non-resident service providers must be treated in the same way as regards
         the basis on which they are assessed. No specific question was referred to the Court and so it did not give an express ruling
         as regards the stage of the taxation procedure at which the business expenses incurred by a service provider should be taken
         into account.
      
      61.      The Bundesfinanzhof is now seeking a specific ruling from the Court on whether or not Articles 59 and 60 of the Treaty preclude
         the retention of such business expenses from taxable income not being possible at the point when the payment debtor retains
         tax at source.
      
      62.      It is clear that where national tax law does not provide a non-resident service provider with a procedure for annual adjustment
         of tax or for a refund to take into account his business expenses after the event, that is to say, after tax has been retained
         at source, Articles 59 and 60 of the Treaty, as interpreted by the Court in Gerritse, necessarily preclude the deduction of such expenses from taxable income not being possible at the time when the payment
         debtor retains the tax at source.
      
      63.      In such a situation, failure to take business expenses into account at the stage of retention of tax at source would equate
         to treating resident and non-resident service providers differently with regard to the actual possibility of deducting such
         expenses, which constitutes, as the Court held in that judgment, indirect discrimination on grounds of nationality in breach
         of Articles 59 and 60 of the Treaty.
      
      64.      Also, with regard to the possibility of persons with partial liability to tax having their business expenses taken into account
         after the event, it is appropriate to note that in Schumacker the Court examined, in the light of the Treaty rules on freedom of movement for workers, provisions of German tax law under
         which the benefit of procedures such as annual adjustment of retentions at source in respect of wages tax and the assessment
         by the administration of the tax payable on income from employment was available only to residents.
      
      65.      The Court established first of all that, according to the information supplied by the national court, by virtue of the discharging
         effect of the retention at source, ‘non-residents are … deprived, for reasons of administrative simplification, of the possibility
         of relying, in the procedure for the annual adjustment of retentions at source or in connection with the assessment by the
         administration of tax on remuneration from employment, on certain items forming part of the basis of assessment (for example,
         occupational expenses, special expenditure or so-called extraordinary costs) which might give rise to a partial refund of the tax deducted at source’. (27) In the view of the Court, non-residents might thereby ‘be placed in a less advantageous position than residents’ in so far
         as the German tax law made provision for the latter to be taxed ‘in such a way that all items forming part of the basis of
         assessment are taken into account’. (28)
      
      66.      In that context, the Court’s statement that ‘Article 48 of the Treaty requires equal treatment at procedural level for non-resident
         Community nationals and resident nationals’ (29) is closely linked to the obligation on Member States not to tax the former more heavily than the latter without objective
         reason.
      
      67.      It is that line of reasoning which led the Court to rule that ‘Article 48 of the Treaty must be interpreted as precluding
         a provision in the legislation of a Member State on direct taxation under which the benefit of procedures such as annual adjustment
         of retentions at source in respect of wages tax and the assessment by the administration of the tax payable on remuneration
         from employment is available only to residents, thereby excluding natural persons who have no permanent residence or usual
         abode on its territory but receive income there from employment’. (30)
      
      68.      That reasoning is valid in respect of freedom to provide services, so that it may in my view be inferred from this that Articles
         59 and 60 of the Treaty also preclude failure to take business expenses of non-resident service providers into account after
         the event where that possibility exists in the case of resident service providers.
      
      69.      As regards the existence in German tax law of a procedure allowing non-resident service providers to have their business expenses
         taken into account after the event, and thereby be refunded any difference between the amount of their net income in Germany
         and the amount of tax retained at source, (31) the national court refers to a letter from the Federal Ministry of Finance dated 3 November 2003. (32)
      
      70.      In its written observations, (33) Scorpio states, however, that, contrary to what was the case for resident service providers, the possibility of persons with
         partial liability to tax having their business expenses taken into account after the event did not exist in 1993, the year
         at issue. Scorpio also states that it was not possible to apply after the event for a refund of an overpayment of tax under
         what is known as the ‘simplified refund’ procedure until 1996. (34)
      
      71.      Although this information gives cause to doubt whether a refund procedure existed in 1993 which allowed business expenses
         incurred by non-resident service providers to be taken into account after the event, it is important to stress that it is
         the responsibility of the national court to decide what national law is applicable in the main proceedings. It will therefore
         be for the Bundesfinanzhof to determine whether the German tax law which was in force at the relevant time did provide a refund
         procedure for non-resident service providers. If that determination were to lead it to conclude that it was impossible for
         such service providers to have their business expenses taken into account after the event, whereas such a possibility existed
         for resident service providers, it would be necessary for that court to consider that the law in force at that time was on
         that point contrary to Articles 59 and 60 of the Treaty, as interpreted by the Court in Schumacker and Gerritse.
      
      72.      Having given those clarifications, I note that it is apparent from the Bundesfinanzhof’s order for reference that that court,
         on the basis of a different premiss, seeks to ascertain whether, in view of what the Court held in Gerritse, the levying of tax by means of retention at source calculated on the basis of gross income and the liability rule deriving
         from it also constitute indirect discrimination in breach of Articles 59 and 60 of the Treaty, since the possibility is offered
         to a non-resident service provider to obtain after the event a refund of any difference between the amount of his net income
         in Germany and that of the tax retained at source. (35)
      
      73.      In other words, should the Court go so far as to adopt an interpretation whereby, even in a case where the possibility of
         taking into account the business expenses incurred by a non-resident service provider after the event is provided for by national
         tax law, Articles 59 and 60 of the Treaty preclude the payment debtor from not being able, under that law, to deduct such
         expenses from his payment at the time when he retains the tax at source?
      
      74.      I think not.
      
      75.      In so far as the national procedural framework thus described ultimately allows a non-resident service provider to deduct
         from his taxable receipts the business expenses he has incurred, the determining factor, in my view and in the light of the
         case-law analysed above, is that that service provider should not, at the end of the day, be taxed more heavily than a service
         provider residing in Germany. As both those categories of taxpayer are therefore treated in a comparable manner with regard
         to the option open to them to deduct business expenses from their taxable income, I consider that the mere fact that such
         expenses cannot be deducted from a non-resident service provider’s taxable receipts at the actual point when the tax is retained
         at source does not constitute an infringement of Articles 59 and 60 of the Treaty.
      
      76.      I am therefore of the view that the answer that should be given to the Bundesfinanzhof is that Articles 59 and 60 of the Treaty
         must be interpreted as not precluding a national tax law under which the debtor of the payment made to a non-resident service
         provider cannot, when he retains tax at source, deduct from taxable income the business expenses of that service provider
         which are economically connected with his activities in the State in which the service is provided, on condition, however,
         that those expenses may be taken into account after the event and therefore that a non-resident service provider is not ultimately
         taxed more heavily than a resident service provider.
      
      77.      In view of the negative answer I am thus proposing the Court should give to Question 3(a), there is no need to answer Question
         3(b). I shall therefore proceed directly to consideration of Question 3(c).
      
      C –    Question 3(c)
      78.      By this question, the Bundesfinanzhof is asking the Court whether Articles 59 and 60 of the Treaty must be interpreted as
         precluding, on one hand, the tax exemption which a non-resident service provider who has pursued his activity in Germany enjoys
         under the double taxation convention between the Federal Republic of Germany and the Kingdom of the Netherlands from not being
         taken into account under the procedure for retention of tax at source by the payment debtor, but only under a subsequent exemption
         or refund procedure and, on the other hand, as precluding the payment debtor from not being able to rely on that tax exemption
         in proceedings concerning liability brought against him.
      
      79.      According to the information supplied by the national court, the income derived from artistic services which is at issue in
         the main proceedings was not taxable in Germany, only in the Netherlands, under the double taxation convention between those
         two Member States. (36)
      
      80.      Also, under Paragraph 50d(1) of the EStG, where income which is subject to retention of tax at source pursuant to Paragraph
         50a of that law cannot be taxed, or can only be taxed at a lower rate of tax, under a double taxation convention, the provisions
         of national tax law relating to retention, payment and declaration of tax by the payment debtor must apply nevertheless without
         prejudice to that convention. In that case, the right of the payment creditor to obtain a total or partial refund of the tax
         retained and paid is not affected.
      
      81.      However, under the provisions of Paragraph 50d(3), first sentence, of the EStG, the payment debtor may, under a convention
         of that type, refrain from making a retention of tax at source or make it at a lower rate of tax if the BfF certifies on application
         that the relevant conditions are met (exemption procedure). The payment debtor is therefore required to retain tax at source
         except where an exemption certificate has been issued by the BfF.
      
      82.      The first part of Question 3(c) must therefore be understood as seeking to ascertain, in essence, whether Articles 59 and
         60 of the Treaty preclude a national tax law which allows a tax exemption pursuant to a double taxation convention to be taken
         into account at the stage at which tax is retained at source only where an exemption certificate is issued by the competent
         tax authority.
      
      83.      As the Court has held, ‘in the absence of unifying or harmonising measures adopted in the Community, in particular under the
         second indent of Article 220 of the EC Treaty (now the second indent of Article 293 EC), the Member States remain competent
         to determine the criteria for taxation of income and wealth with a view to eliminating double taxation by means, inter alia,
         of international agreements. In this context, the Member States are at liberty, in the framework of bilateral agreements concluded
         in order to prevent double taxation, to determine the connecting factors for the purposes of allocating powers of taxation
         as between themselves’. (37)
      
      84.      The Court also said that ‘[a]s far as the exercise of the power of taxation so allocated is concerned, the Member States nevertheless
         may not disregard Community rules’, (38) in so far as they are required to exercise their powers with regard to direct taxation consistently with Community law.
      
      85.      One of the difficulties in the present case is deciding whether the procedure that a non-resident service provider must follow
         in order to obtain an exemption certificate from the BfF, since it involves determining whether the criteria for the taxation
         of income laid down in the double taxation convention are met, falls within the Treaty rules on freedom to provide services.
      
      86.      In so far as the implementation of that procedure is closely linked to the definition of connecting factors for the purposes
         of allocating powers of taxation between the Federal Republic of Germany and the Kingdom of the Netherlands, it could be argued
         that it does not fall within the scope of Community law and is a matter concerning only the bilateral relationship which those
         two States have established between themselves in order to avoid double taxation.
      
      87.      However, the question referred by the national court does not relate to the actual definition of the criteria for taxation
         which enable those two States to allocate their powers of taxation between themselves, but rather to the exercise by the Federal
         Republic of Germany of what it considers falls within its power of taxation with regard to a non-resident service provider
         where the latter has neither applied for nor obtained an exemption certificate. In exercising such power, the Federal Republic
         of Germany is required to comply with Community law, and in particular Articles 59 and 60 of the Treaty.
      
      88.      In that regard, it must, in my view, be considered that the obligation incumbent on a non-resident service provider to apply
         to the BfF for an exemption certificate in order to avoid taxation of his income in Germany constitutes a restriction on the
         freedom to provide services due to the administrative steps which it involves at the service provider’s expense.
      
      89.      However, I consider that restriction to be objectively justified in order to ensure the correct implementation of the procedure
         for taxation at source.
      
      90.      As the Kingdom of Belgium contends, it is important that the payment debtor should be able to refrain from retaining tax at
         source only if he is certain that the service provider meets the conditions under which he is entitled to exemption. (39) Also, it appears to me to be justified to allow the competent tax authority to determine whether the conditions for exemption
         are met, since, as the Federal Republic of Germany contends, the payment debtor himself cannot be required to clarify in each
         individual case whether or not the income in question is exempt under a double taxation convention. (40) Lastly, to allow a payment debtor unilaterally to refrain from retaining tax at source might, in the event of an error on
         his part, have the effect of prejudicing the collection of the tax from the payment creditor.
      
      91.      I am therefore of the view that Articles 59 and 60 of the Treaty do not preclude a national tax law which allows a tax exemption
         pursuant to a double taxation convention to be taken into account at the stage at which tax is retained at source only where
         an exemption certificate is issued by the competent tax authority.
      
      92.      In order to answer the second part of Question 3(c), it now remains to be decided whether Article 59 of the Treaty precludes
         the payment debtor not being able to rely on the tax exemption pursuant to the double taxation convention in liability proceedings
         brought against him. (41)
      
      93.      As we saw when considering Question 1, Articles 59 and 60 of the Treaty must, in my view, be interpreted as not precluding
         a national law under which, in connection with  the cross-border provision of a service, a recipient of services established
         in one Member State can be held liable in that State because he has failed to retain at source the tax on a payment made to
         a service provider residing in another Member State in consideration for that service.
      
      94.      Such liability proceedings, which constitute the corollary of the procedure for retention of tax at source, help to achieve,
         in a proportionate manner, the objective of ensuring that tax is collected effectively.
      
      95.      However, with regard to the rules regarding the bringing of such proceedings, it appears to me to be disproportionate in relation
         to such an objective for the payment debtor not to be able to rely on a tax exemption under a double taxation convention in
         proceedings concerning liability.
      
      96.      Where the payment creditor has not applied for an exemption certificate and the payment debtor has nevertheless decided not
         to retain the tax at source and the German tax authorities are therefore holding him liable, it is, in my view, contrary to
         the freedom to provide services to refuse categorically to allow him to rely on the creditor’s rights under a double taxation
         convention. Such a ban is liable to deter him from approaching a service provider established in another Member State, and
         also goes beyond what is necessary with regard to the objective of ensuring effective collection of tax.
      
      97.      In that regard, as Scorpio states, it should be noted that at the stage of proceedings concerning liability the German tax
         authorities are in a position to determine whether the conditions for exemption laid down in the double taxation convention
         are met and, if so, they should be able to withdraw the proceedings against the payment debtor concerning a tax which it has
         been finally established does not have to be paid in Germany. (42) Following the example of the appellant in the main proceedings, it should also be pointed out that if the BfF can make such
         a determination in the context of an exemption procedure prior to retention at source, the German tax authorities should also
         be able to make it in the context of subsequent proceedings concerning liability. (43)
      
      98.      In view of this, I propose that the answer to the Bundesfinanzhof should be that Articles 59 and 60 of the Treaty must be
         interpreted as not precluding a national tax law which allows a tax exemption pursuant to a double taxation convention to
         be taken into account at the stage at which tax is retained at source only where an exemption certificate is issued by the
         competent tax authority. However, Article 59 of the Treaty precludes the payment debtor not being able to rely on a tax exemption
         under a double taxation convention in liability proceedings brought against him.
      
      D –    Question 3(d)
      99.      By this last question, the Bundesfinanzhof is asking the Court whether the answers to Question 3(a) to (c) would be different
         if the payment creditor, established in another Member State, was not a national of a Member State when he provided his service. (44)
      
      100. This raises the question of principle of the applicability of the Treaty rules relating to freedom to provide services in
         a case where the recipient of services who relies on those rules is a national of Member State and the service provider is
         a national of a non-member country.
      
      101. It is necessary first of all to consider the admissibility of this question.
      
      102. The national court states that it does not know Europop’s nationality. Its question is therefore based on a hypothesis which
         remains to be verified. However, the Court has consistently held that it may refuse to rule on a question referred for a preliminary
         ruling by a national court ‘where the problem is hypothetical’. (45)
      
      103. I am of the view that the Court could, however, agree to answer the question referred by the Bundesfinanzhof since, as a judge
         of the law and not of the facts, it does not make findings as regards the facts. Its task is to resolve issues of principle,
         on the basis of the facts established by the Finanzgericht, which is the court of first instance. In the light of the answer
         given by the Court to that question, it will be for the competent Finanzgericht to which the case is remitted to determine
         whether Europop was a national of a Member State at the time he provided his service.
      
      104. Also, since this is a question of principle on which, so far as I am aware, the Court has not yet given a ruling, I will present
         my analysis to it in order to enable it, if appropriate, to answer this question.
      
      105. In this connection, it is appropriate first to note that, according to settled case-law, Article 59 of the Treaty confers
         rights not only on the service provider himself but also on the recipient of services. (46) In particular, that article confers on the recipient of services the right to go to another Member State in order to receive
         a service there, without being hindered by restrictions. (47)
      
      106. In addition to the intra-Community movement of the provider or recipient of services, Article 59 of the Treaty also protects
         the ‘movement’ of the provision of services itself. By way of illustration, it is clear from Alpine Investments (48) that Article 59 covers the activity of ‘cold calling’, which includes operations whereby a service provider makes telephone
         contact with persons established in another Member State in order to offer them various financial services which he provides
         without moving from the Member State in which he is established. (49)
      
      107. It has been noted in that connection that ‘the purpose of liberalising trade pursued by the Treaty in order to achieve an
         internal market explains the extent of the meaning attributed by the Court to the concept of provision of services, within
         the meaning of [Article 60] of the Treaty. It covers services provided from one Member State to another, including cases in
         which neither the providers of those services nor their actual or potential recipients cross any borders’. (50)
      
      108. That interpretation also applies, in my view, in a case where it is the recipient of services who relies on the Treaty rules
         relating to freedom to provide services. In a case such as that in the main proceedings, the important point is that the provision
         of services, which, let us remember, consists in making available a group of musicians, is effected by a service provider
         established in one Member State to a recipient established in another Member State and thus involves intra-Community ‘movement’.
         Being more tangible than an offer of services by telephone or by internet, the ‘movement’ of the service provision is in this
         case given concrete expression by the physical movement of the group of musicians.
      
      109. It follows from this information that the appellant in the main proceedings should, as the recipient of the service provided
         by Europop, be able to rely on the subjective rights conferred on it by Article 59 of the Treaty.
      
      110. However, should we consider that it would be the same if the service provider were to prove to be a national of a non-member
         country?
      
      111. I think the answer should be yes.
      
      112. We have seen above that Article 59 of the Treaty confers rights directly on both the provider and the recipient of services.
         In the present state of Community law, only nationals of Member States can rely on such rights. (51)
      
      113. With regard to the service provider, the first and second paragraphs of Article 59 of the Treaty expressly state that in order
         to enjoy freedom to provide services a service provider must, as well as being established in a Member State of the European
         Community, also be a national of a Member State.
      
      114. The second paragraph of Article 59 of the Treaty, however, contains the possibility, which has so far not been given concrete
         expression, for the Council, acting by a qualified majority on a proposal from the Commission, to extend the provisions of
         the chapter relating to services to nationals of a third country who provide services and who are established within the Community. (52)
      
      115. I note that no such possibility is provided for recipients of services who are nationals of a non-member country and are established
         within the Community. (53) The absence of a provision of that nature in my opinion supports the view that only recipients of services who are nationals
         of a Member State may rely on the Treaty rules on freedom to provide services. (54) Moreover, I see no reason that would justify third-country nationals enjoying a more favourable position as recipients of
         services than they would as service providers. (55)
      
      116. The situation about which the Bundesfinanzhof has doubts is, however, completely different.
      
      117. As we have seen above, this is a case in which the recipient of services, who it is agreed is a national of a Member State,
         is seeking to enjoy rights under the Treaty rules on freedom to provide services in the context of the relationship he has
         with a service provider whose nationality is not known by the national court.
      
      118. In such a situation, I am of the view that the nationality of the service provider is irrelevant as regards the rights enjoyed
         by the recipient of the services.
      
      119. It is important to note in that regard that it does not follow either from the wording of Article 59 of the Treaty or from
         the case-law of the Court that enjoyment by a service provider of the freedom provided for in that article is conditional
         upon the service provider showing that his contractual partner who is the recipient of the services is a national of a Member
         State.
      
      120. Nor does such a view hold good where it is the recipient of services who is relying on that article. To take an example cited
         in Advocate General Elmer’s Opinion in Svensson and Gustavsson, the right of entry as a tourist into another Member State to receive services without being exposed to discrimination cannot,
         in my view, be conditional upon the recipient of services demonstrating that the service providers, the owners of a hotel
         for example, are nationals of a Member State. (56)
      
      121. Also, as the Commission observes, it is unjustified and unreasonable to distinguish according to the nationality of the service
         provider, because that would require the recipient of the service systematically to obtain, and check, information concerning
         the nationality of his trading partners established in another Member State. (57)
      
      122. Lastly, as Scorpio states, quite rightly in my view, to accept that protection of a recipient of services depends on the nationality
         of his contractual partner would amount to depriving freedom to provide services of a significant part of its effects. (58)
      
      123. In the light of the foregoing, I propose that the answer the Court should give to Question 3(d) should be that Article 59
         of the Treaty must be interpreted as applying in a case where the recipient of services who relies on that article is a national
         of a Member State and the provider of the services is a national of a non-member country.
      
      V –  Conclusion
      124. In the light of the above considerations, I propose that the Court should answer the questions referred for a preliminary
         ruling by the Bundesfinanzhof as follows:
      
      (1)      In the case of income tax payable in respect of the period at issue, Article 59 of the EEC Treaty (later Article 59 of the
         EC Treaty, now, after amendment, Article 49 EC) and Article 60 of the EEC Treaty (later Article 60 of the EC Treaty, now Article
         50 EC) must be interpreted as not precluding a national law under which, in connection with the cross-border provision of
         a service, a recipient of services established in one Member State can be held liable in that State because he has failed
         to retain at source the tax on a payment made to a service provider residing in another Member State in consideration for
         that service, whereas payments made to a service provider residing in the first State would not be subject to such a retention
         and therefore no liability of the payment debtor, the recipient of services, for non-retention of tax at source could arise.
      
      (2)      Articles 59 and 60 of the Treaty must be interpreted as not precluding a national tax law under which the debtor of the payment
         made to a non-resident service provider cannot, when he retains tax at source, deduct from taxable income the business expenses
         of that service provider which are economically connected with his activities in the State in which the service is provided,
         on condition, however, that those expenses may be taken into account after the event and therefore that a non-resident service
         provider is not ultimately taxed more heavily than a resident service provider.
      
      (3)      Articles 59 and 60 of the Treaty must be interpreted as not precluding a national tax law which allows a tax exemption pursuant
         to a double taxation convention to be taken into account at the stage at which tax is retained at source only where an exemption
         certificate is issued by the competent tax authority. However, Article 59 of the Treaty precludes the payment debtor not being
         able to rely on a tax exemption under a double taxation convention in liability proceedings brought against him.
      
      (4)      Article 59 of the Treaty must be interpreted as applying in a case where the recipient of services who relies on that article
         is a national of a Member State and the provider of the services is a national of a non-member country.
      
      1 –	Original language: French.
      
      2 –	Since, as we shall see, the facts in the main proceedings occurred during the first and third quarters of 1993, and thus
         before the entry into force of the Maastricht Treaty, the EEC Treaty applies to those facts.
      
      3 –	Law as amended by the Tax Amendment Law of 25 February 1992 (Steueränderungsgesetz, BGBl. 1992 I, p. 297) (‘the EStG’).
      
      4 –	Paragraph 49(1)(2)(d) of the EStG.
      
      5 –	Paragraph 50a(4), third, fifth and sixth sentences, of the EStG.
      
      6 –	Paragraph 50a(5), first and second sentences, of the EStG.
      
      7 –	Paragraph 50a(5), third and fifth sentences, of the EStG.
      
      8 –	Paragraph 50(5) of the EStG. This is the ‘discharging’ effect of retention at source.
      
      9 –	Paragraph 50d(1), first and second sentences, of the EStG. This entitlement must be applied for on an officially prescribed
         form.
      
      10 –	‘The BfF’.
      
      11 –	Paragraph 50d(3), first sentence, of the EStG.
      
      12 –	Paragraph 50d(1), last sentence, of the EStG.
      
      13 –	Convention of 16 June 1959 between the Federal Republic of Germany and the Kingdom of the Netherlands for the avoidance
         of double taxation in the area of income, capital and various other taxes and for regulating other tax matters (BGBl. 1960
         II, p. 1782; ‘the double taxation convention’). The national court refers to the provisions of Article 5(1) in conjunction
         with Article 1(2)(1)(a), Article 2(1)(1), (2) and (5), and Article 20(1) of that convention (see order for reference, p. 7).
         
      
      14 –	Case C‑234/01 [2003] ECR I‑5933.
      
      15 –	Council Directive of 15 March 1976 on mutual assistance for the recovery of claims resulting from operations forming part
         of the system of financing the European Agricultural Guidance and Guarantee Fund, and of the agricultural levies and customs
         duties (OJ 1976 L 73, p. 18). 
      
      16 –	Council Directive of 15 June 2001 amending Directive 76/308 and in respect of value added tax and certain excise duties
         (OJ 2001 L 175, p. 17). The third recital in the preamble to Directive 2001/44 states that ‘claims relating to certain taxes
         on income and capital … should be added to the scope of the mutual assistance provided for by Directive [76/308]’. 
      
      17 –	BStBl. 2000 I, p. 66.
      
      18 –	The national court cites Case C‑294/97 Eurowings Luftverkehr [1999] ECR I‑7447.
      
      19 –	See, in particular, Case C-136/00 Danner [2002] ECR I-8147, paragraph 28 and case-law cited.
      
      20 –	See, in particular, Case C-381/93 Commission v France [1994] ECR I-5145, paragraph 16, and Case C-118/96 Safir [1998] ECR I-1897, paragraph 22.
      
      21 –	See, for example, Commission v France, paragraph 17; Safir, paragraph 23; and Danner, paragraph 29.
      
      22 –	See, in particular, Case C-175/88 Biehl [1990] ECR I-1779; Case C-279/93 Schumacker [1995] ECR I-225; and C-151/94 Commission v Luxembourg [1995] ECR I-3685.
      
      23 –	Written observations (p. 17).
      
      24 –	As stated in paragraph 25 of Gerritse, an exception to non-deductibility was however made in the EStG of 1996 where business expenses were higher than half of
         the receipts, in which case tax was repaid in so far as it exceeded 50% of the difference between the receipts and the business
         expenses.
      
      25 –	Paragraph 28.
      
      26 –	Paragraph 27.
      
      27 –	Schumacker, paragraph 51 (emphasis added).
      
      28 –	Ibid., paragraph 52.
      
      29 – 	Ibid., paragraph 58.
      
      30 –	Ibid., paragraph 59.
      
      31 –	Such a procedure does not appear to correspond to the one provided for in Paragraph 50d(1), second sentence, of the EStG.
         That provision concerns the particular case of total or partial refund of tax retained and paid where, under a convention
         for the avoidance of double taxation, the income in question cannot be taxed, or can only be taxed at a lower rate, in Germany.
      
      32 –	According to the explanations supplied by the Federal Republic of Germany in paragraph 50 of its written observations,
         that letter was a measure taken following the judgment in Gerritse in order to allow ‘offsetting’ in the context of a procedure for refunding tax. 
      
      33 –	Written observations (p. 13).
      
      34 –	Scorpio refers in that regard to Paragraph 50(5), fourth sentence, point 3, of the EStG of 1996.
      
      35 –	I should like to point out in that regard that it is clear from the facts and law in Gerritse that, under the German tax law in force in 1996, the applicant in the main proceedings did not benefit from a procedure for
         annual adjustment or assessment that would have made it possible to take into account his business expenses after the event,
         that is to say, after tax had been retained at source. Moreover, Mr Gerritse did not fulfil the conditions which would have
         allowed him to benefit from the refund procedure provided for in Paragraph 50(5), fourth sentence, point 3, of the EStG of
         1996, since that procedure applies only where the business expenses are higher than half of the receipts, in which case tax
         may be repaid if it exceeds 50% of the difference between the receipts and the business expenses.
      
      36 –	See point 12 and footnote 13 above.
      
      37 –	Case C‑307/97 Saint-Gobain [1999] ECR I-6161, paragraph 57. See also, to that effect, Case C‑336/96 Gilly [1998] ECR I-2793, paragraphs 24 and 30.
      
      38 –	Saint-Gobain, paragraph 58.
      
      39 – 	Written observations (paragraph 12).
      
      40 – 	Written observations (paragraph 77).
      
      41 –	Under Paragraph 50d(1), last sentence, of the EStG, where proceedings concerning liability are brought against a payment
         debtor for non-retention of tax at source, that person may not, in those proceedings, rely on rights which a double taxation
         convention confers on the payment creditor.
      
      42 –	Written observations (p. 31).
      
      43 –	In that regard, it may avail itself of the opportunities offered by Council Directive 77/799/EEC of 19 December 1977 concerning
         mutual assistance by the competent authorities of the Member States in the field of direct taxation (OJ 1977 L 336, p. 15).
      
      44 –	In view of the answers I propose should be given to Question 3(a) and the first part of Question 3(c), it is only relevant
         to answer this question in relation to the second part of Question 3(c).
      
      45 –	See, in particular, Case C-380/01 Schneider [2004] ECR I-1389, paragraph 22, and Case C‑165/03 Längst [2005] ECR I-5637, paragraph 32.
      
      46 –	See, in particular, Joined Cases 286/82 and 26/83 Luisi and Carbone [1984] ECR 377; Case 186/87 Cowan [1989] ECR 195; Case C-43/93 Vander Elst [1994] ECR I-3803, paragraph 13; Case C-484/93 Svensson and Gustavsson [1995] ECR I-3955; Case C-158/96 Kohll [1998] ECR I-1931, paragraph 35; and EurowingsLuftverkehr, paragraph 34. 
      
      47 –	See, in particular, Luisi and Carbone, paragraph 16; Case C-55/98 Vestergaard [1999] ECR 
         I-7641, paragraph 20; and Case C-215/03 Oulane [2005] ECR I-1215, paragraph 37.
      
      48 –	Case C-384/93 [1995] ECR I-1141.
      
      49 –	For another example, concerning the offer of services on the internet, see Case C-243/01 Gambelli and Others [2003] ECR I-13031, paragraphs 53 and 54.
      
      50 –	See Truchot, L., ‘Articles 49 et 50 CE’, Commentaire article par article des traités UE et CE, Helbing & Lichtenhahn, Dalloz, Bruylant, 2000, p. 447, point 33.
      
      51 –	According to the first paragraph of Article 58 of the EEC Treaty (later the first paragraph of Article 58 of the EC Treaty,
         now the first paragraph of Article 48 EC), applying in the field of freedom to provide services under Article 66 of the EEC
         Treaty (later Article 66 of the EC Treaty, now Article 55 EC), ‘[c]ompanies or firms formed in accordance with the law of
         a Member State and having their registered office, central administration or principal place of business within the Community
         shall … be treated in the same way as natural persons who are nationals of Member States’.
      
      52 –	The proposal for a Council directive extending the freedom to provide cross-border services to third-country nationals
         established within the Community (OJ 1999 C 67, p. 17) was withdrawn by the Commission: see the communication from the Commission
         – ‘Withdrawal of Commission proposals which are no longer of topical interest’, 1 October 2004 (COM(2004) 542 final/2).
      
      53 –	That is doubtless the reason why Article 1(2) of the abovementioned proposal for a directive provided that ‘[t]his Directive
         shall not cover nationals of a third country as recipients of cross-border services …’.
      
      54 –	This view, that Article 59 of the Treaty cannot be relied upon ‘autonomously’ by a third-country national, was supported
         by Advocate General Elmer in his Opinion in Svensson and Gustavsson, point 35 et seq. The Court did not deal with this issue in its judgment, however, perhaps because Council Directive 88/361/EEC
         of 24 June 1988 for the implementation of Article 67 of the Treaty (OJ 1988 L 178, p. 5) was also applicable; that directive
         covers recipients who are residing in Member States but do not have the nationality of a Member State. See, to that effect,
         Huglo, J.-G., ‘Droit d’établissement et libre prestation de services’, Jurisclasseur Europe, fasc. 710, point 29. 
      
      55 –	See, to the same effect, the Opinion of Advocate General Elmer in Svensson and Gustavsson, point 40.
      
      56 –	Point 38.
      
      57 –	Written observations (paragraph 49).
      
      58 –	Written observations (p. 35).