CELEX: 61968CC0023
Language: en
Date: 1969-01-29
Title: Opinion of Mr Advocate General Gand delivered on 29 January 1969. # Johannes Gerhardus Klomp v Inspektie der Belastingen. # Reference for a preliminary ruling: Gerechtshof 's-Gravenhage - Netherlands. # Case 23-68.

OPINION OF MR ADVOCATE-GENERAL GAND
      DELIVERED ON 29 JANUARY 1969 (
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         Mr President,
      
         Members of the Court,
      Since 1956 a general old-age insurance scheme (Algemene Ouderdomsverzekering) (hereinafter referred to as ‘the AOW’) has existed in the Netherlands, applicable in principle to all persons resident there and financed by contributions assessed on the income of the persons concerned and recovered in the same way as taxes. The application of this scheme has already led some social security courts of that State to ask you, under the conditions laid down by Article 177 of the Treaty of Rome, to interpret certain provisions of Regulation No 3 concerning social security for migrant workers (Case 92/63, Moebs (née Nonnenmacher) [1964] ECR 281). The question now referred to you by the Gerechtshof, The Hague,—still in relation to this legislation — is a problem of quite another kind. It is a question whether the provision of Article 11(b) of the ECSC Protocol on the Privileges and Immunities, exempting the officials of that Community from any national tax on salaries and emoluments paid by the Community, prevents the contribution payable under the AOW from being assessed on those salaries and emoluments. Let us briefly recall the facts.
      Mr Klomp, an established official of the High Authority formerly employed in Luxembourg, was from the 1 February 1959 assigned to the Communities' Press and Information Department in The Hague and established his residence there. At the end of 1961 the tax authorities sent him a notice of assessment to the contribution to the AOW for the year 1959, in which for the purpose of calculating the contribution account had been taken of the salary which he had received as an official of the ECSC.
      Having failed to induce the appropriate authority to amend this basis of calculation Mr Klomp brought an action before the Gerechtshof, The Hague, which was registered on 13 February 1963. In this action he invoked Article 11(b) of the ECSC Protocol, maintaining that he was only liable to pay a contribution to the AOW on the income received by him in the Netherlands excluding, however, income attributable to his duties with the ECSC which in fact would result in the reduction of his contribution to zero.
      In these circumstances, by letter dated 24 September 1968, the President of the Fiscal Chamber of the Gerechtshof acting in the name of the court and ‘on the basis of the relevant provisions of the Treaty establishing the European Coal and Steel Community’ asks you to rule whether the terms of Article 11(b) exempting from national taxation salaries and emoluments paid by the Community ‘applies equally to the contribution charged on such income under the (Netherlands) General Law on Old Age’.
      I
      Does the Court have jurisdiction to reply to this question? This is the first problem which arises and it is one which cannot be resolved by a reference as vague as that made by the Gerechtshof which I have just cited.
      On what provision can you base your jurisdiction?
      
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               Article 31 of the Treaty cannot by itself confer jurisdiction upon you. It is true that it provides that you shall ensure that the law is observed in the interpretation and the explanation of the Treaty which, by virtue of Article 84, must extend also to the annexed Protocols. But this provision, which more or less reproduces Article 164 of the Treaty of Rome, amounts to nothing more than a very general declaration of principle which only acquires value and content to the extent to which the subsequent articles specify precisely the various kinds of proceedings which may be brought before you.
            
         
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               As is submitted by the Government of the Netherlands, Article 41 must likewise be rejected. The exclusive jurisdiction conferred on you by that article for giving preliminary rulings concerns only the validity of acts of the High Authority and of the Council where such validity is in issue in proceedings brought before a national court or tribunal; it cannot be extended to the provisions of the Protocol on the Privileges and Immunities.
            
         
               —
            
            
               You may, on the other hand, consider basing your jurisdiction on Article 16 of that Protocol, which provides that any dispute concerning the interpretation or application of the Protocol shall be submitted to the Court.
            
         One might well ask, since no procedure for referring preliminary rulings has been provided, in what form and by whom the question could be brought before you. Your judgment in the Humblet case (16 December 1960, Rec. 1960, p. 1131) recognizes that it may be brought before you by the official concerned without his having exhausted his remedies under the national legal system. In fact Mr Humblet had, at the same time, brought a claim before the Cour d'Appel, Liege, against the tax levied on him and a request before your Court for interpretation of Article 11(b) of the Protocol and the annulment of the contribution in question. Whilst, as you stated, it was not for you to grant the latter part of this request which was purely a matter for the national court, your jurisdiction to interpret the Protocol was exclusive; the national court which alone has jurisdiction to annul the tax could only, in the absence of an initiative by the parties, have sent them before you to obtain the interpretation of the Community provisions or have brought the matter before you itself by a reference for a preliminary ruling. I agree, therefore, with Mr Advocate-General Lagrange (Humblet, Rec. 1960, p. 1172) that the absence of any procedure expressly laid down could not have precluded a reference by the court of its own motion founded upon the exclusive character of your jurisdiction.
      Today, however, the difficulty arises in another way.
      The contribution is due for the year 1959; it was claimed from Mr Klomp in 1961 and he brought the matter before the Gerechtshof in February 1963. It was only on 24 September 1968 that that court asked you to interpret Article 11(b) of the ECSC Protocol. The Protocol, however, has been completely repealed as from 1 July 1967 by Article 28 of the Treaty of 8 April 1965 and has been replaced as from the same date by a single Protocol on the Privileges and Immunities of the Communities which now takes the place of the three Protocols of the ECSC, EEC and EAEC. The laconic nature of the letter referring the matter to you does not show whether the Gerechtshof was aware of the questions arising from the chronological succession of these various provisions but they are questions which you cannot avoid considering. A distinction must also be made according to whether we are dealing with provisions of substance or rules of jurisdiction or procedure.
      First, the repeal as from 1 July 1967 of Article 11(b) of the ECSC Protocol, the substance of which is re-enacted by Article 13 of the 1965 Protocol, does not preclude an appraisal of the plaintiffs position with regard to a contribution charged for 1959, and any right which he may have to exemption, with reference to the provisions in force at the latter date, that is, the provisions of the former Protocol. That is a principle common to the laws of the Member States.
      The position is less clear as regards the jurisdiction with regard to interpretation conferred on you by Article 16 of the ECSC Protocol, since the application of that article seems to be precluded by Article 30 of the Treaty of 1965, which reads as follows:
      ‘The provisions or the Treaties establishing the European Economic Community and the European Atomic Energy Community relating to the jurisdiction of the Court of Justice and to the exercise of such jurisdiction shall be applicable to the provisions of this Treaty and of the Protocol annexed thereto, with the exception of those which represent amendments to Articles of the Treaty establishing the European Coal and Steel Community, in respect of which the provisions of the Treaty establishing the European Coal and Steel Community shall remain applicable’.
      Thus, among the former rules of jurisdiction the only ones maintained are those in the ECSC Treaty and not those peculiar to the Protocol. In particular they are only maintained for the provisions of the new Treaty and Protocol ‘taking the form of amendments of articles of the Treaty establishing the ECSC’. This is the case, for example, of Article 8 which amends certain provisions of the third and fourth paragraphs of Article 28, as formerly worded, on the method of calculating a majority in the Council. It also supplements the third paragraph of Article 20 and the fifth paragraph of Article 28 of the Statute of the ECSC Court — which is maintained in to to— by providing that the approval by the Council of certain annexed rules of procedure laid down by you shall henceforth require unanimity. On the other hand, the Protocol on the Privileges and Immunities of the ECSC is repealed in its entirety, although, as I have said, the provision now in question, namely Article 11(b), is substantially re-enacted by Article 13 of the Single Protocol.
      The Treaty of 1965, which repeals the ECSC Protocol, does not include any transitional provisions, at least on the point which now concerns us. Such problems frequently arise in the law of the Member States to which it is permissible to refer. Generally speaking and in the absence of any express provision, laws governing jurisdiction and procedure are immediately applicable; it follows that as soon as a law of this kind is repealed by another law it is no longer possible to apply the former law for the resolution of disputes, even if such disputes relate to facts or legal relationships which arose while the former law was still in force. This rule which the Commission has expounded and which it supports by an analysis of legal opinion and case-law seems to me correct. It is, however, qualified by certain fairly wide reservations drawn from the doctrine of vested rights and no doubt essentially justified by a concern for legal certainty; hence proceedings begun under a given law may be continued even if such proceedings are no longer possible under a new law. This would no doubt permit you to pronounce today on a request for interpretation under Article 16 submitted before 1 July 1967 but this does not cover the present case since the court in The Hague only brought the matter before you on 24 September 1968.
      If the provisions both of the ECSC Treaty (Articles 31 to 41) and of the ECSC Protocol (Article 16) are thus left out of account, the choice lies between two solutions: either to state that you no longer have jurisdiction to interpret that Protocol or to base your jurisdiction on some other provision which, in this particular field, could only be Article 177 of the EEC Treaty (Article 150 of the EAEC Treaty).
      The first solution does not seem to me desirable nor, in so far as it is permissible to take this into account, does it seem to accord with the intention of the authors of the Merger Treaty. They have expressly recognized your jurisdiction to interpret the new Protocol; it is difficult to see why they should have intended at the same time to renounce the principle for cases where you might still have to consider in the future questions relating to the former Protocol, even if the combination of Articles 28 and 30 of the Treaty must exclude the application of the provision on which your powers were previously based.
      As from the 1965 Treaty it is the provisions of Article 177 — or the identical provisions of Article 150 of the EAEC Protocols. If it is considered that the provision in question has in substance the same content as Article 13 of the 1965 Protocol, which reproduces exactly Article 12 of the EEC Protocol, it is not unreasonable to suppose that its interpretation should be given by the same court and should follow the same forms. This solution, bold as it may seem, has at least the advantage of filling a legal void in a situation which the authors of the Treaty of 1965 could not reasonably have foreseen and which is unlikely to recur.
      This having been said, if, as I propose, your jurisdiction is founded on Article 177, two remarks must be made.
      
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               First, I should like to note the simple fact that ever since it began the case has proceeded along these lines. The procedure adopted from the outset has been that of Article 20 of the Statute of the EEC Court. The letter referring the matter to you has been notified to the Member States and to the Commission. The latter, and also the Government of the Netherlands, submitted written and oral observations, whereas in the Humblet case the High Authority remained entirely outside the dispute.
            
         
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               Secondly, Article 16 of the ECSC Protocol and Article 117 of the EEC Treaty are not conceived in identical terms and the powers which they confer on you are not absolutely the same. The first of these provisions gives you exclusive jurisdiction to pronounce on any dispute bearing on the interpretation Or the application of the Protocol; whilst refusing in the Humblet case to annul the charge payable by the applicant, the operative part of your judgment nevertheless confirms the irregularity of that charge. The terms of Article 177, which do not exclude the right of the Gerechtshof, The Hague, itself to pronounce on the meaning of the Community provision, have always led you to give a rather general and abstract interpretation.
            
         II
      It is in the light of these various remarks that I now come to the question posed by the Netherlands court.
      It asks you to rule whether the terms of Article 11(b) exempting from national taxes salaries and emoluments paid by the Community apply equally to the contributions levied on such income under the AOW.
      It is not possible for you to reply to the question in the form in which it is put directly linked with a national law. All you can interpret is the meaning of the expression ‘national taxes’ used in the provision in question, by considering whether it includes social security contributions imposed by a Member State on an official of the Community. It must also be pointed out, as the Commission has recalled in the course of the oral procedure, that the exemption referred to in Article 11 is a rule of Community law the content of which must be determined by reference to such law and not by reference to Netherlands law, even if it is necessary to take the AOW as an example in studying the question.
      Enough has been said about the AOW during the hearing for me to be very brief about its principal characteristics. It is a general insurance extending to all persons between 15 and 65 years old residing in the Netherlands according the benefits of retirement to all persons insured by it who have attained the age of 65 years. It is financed by contributions paid by all insured persons and calculated on the basis of such persons' incomes up to a certain maximum in the course of a calendar year. These contributions are paid to an old-age fund managed by the Sociale Verzekeringsbank which pays the pensions; they are assessed and collected by the tax authorities. Some of these factors resemble characteristics of a tax; automatic affiliation to a scheme established by law — an obligation to pay a contribution serving, it is true, to finance a definite reciprocal benefit — and finally the method of collection of this contribution which relies very largely on the staff of the taxation authorities and on procedures of fiscal technique.
      Subject to the important reservation that the scheme thus described is applicable to the whole population, these factors are to be found in the legislation of other countries and it is undeniable that social security tends more and more to assume the character of taxation. However, in the matter of national laws neither legal opinion nor case-law seems to permit a genuine assimilation; at the most the term ‘quasi-taxation’ is often used which emphasizes the similarities and the dissimilarities existing between these two concepts.
      If we now consider the matter from the point of view of international relations it will be noted that agreements relating to the privileges and immunities granted to international organizations frequently deal separately with exemption from national taxes and the non-applicability of schemes of social security, a distinction which shows that in the practice and vocabulary of international affairs a social security contribution is not included in the standard exemption from taxation.
      Moreover, although the rules relating to exemption from national taxes are in substance identical in the ECSC Protocol, in the EEC and EAEC Protocols and in the Protocol of 1965, these three latter documents include an article (Article 14 of the EEC and EAEC Protocols, Article 15 of the single Protocol), which does not appear in the Protocol now under discussion, bearing on the social security scheme applicable to officials of the Communities. As the Commission remarks, if these Protocols can be invoked to deny to Member States the right to claim a social security contribution from such officials, this can only be on the basis of the provision dealing with the social security scheme and not on the basis of the provisions exempting salaries from taxation. Yet the ECSC Protocol relating to this latter exemption can hardly receive a different interpretation from that applicable to the more recent Protocols.
      For all these reasons it seems to me that the national taxes mentioned in Article 11(b) of the ECSC Protocol do not include social security contributions levied by a Member State on an official of that Community. The fact that the salaries received from that Community cannot be subject to taxes does not suffice to confer a fiscal character on the contribution assessed on the basis of such income (Case 32/67, Van Leeuwen,8 February 1968, Rec. 1968, p. 64).
      III
      You should reply in this way to the single question put to you by the Gerechtshof, The Hague. That does not prevent officials of the Communities from being compulsorily affiliated in a Member State to a national social security scheme affording them benefits similar to those accorded to them by their staff regulations. You know that in the Netherlands a ministerial decree dated 17 January 1967, which took effect from 1 January 1965, excluded the officials of the three Communities from the provisions of the AOW, thus applying Article 6(3)(b) of the AOW which allows derogations from its provisions as regards persons to whom a corresponding scheme of an organization established under international law is applicable. Since that date the officials of the Communities are no longer affiliated to the AOW, no longer make contributions to it and therefore no longer acquire any right to a pension.
      But the Commission still wonders whether, even in the absence of any provision of the Protocols capable of being interpreted as precluding it or of any legislative derogation, such an affiliation is permissible.
      One might well ask the question but, before you would have any authority to resolve it in the present case, it would be necessary for the Gerechtshof to have brought it formally before you, which would have enabled the various parties mentioned in Article 20 of the EEC Statute to submit to you their observations on this point.
      However, in view of the arguments to which this question has given rise, both in the written procedure and at the Bar, I would repeat that international practice tends increasingly to consider that the existence of a social security scheme — which an international organization is always free to establish for the benefit of its servants — excludes a compulsory application of a national scheme of the same kind. This is accepted for the United Nations Organization, although the question is not dealt with by the agreement reached with the United States on the Privileges and immunities of the Organization. It is expressly provided by an agreement between the Swiss Federal Council and the International Labour Organization. In a slightly different field Article 33 of the Vienna Convention of 1961 on Diplomatic Relations exempts diplomats from any social security provisions which may be in force in the State to which they are accredited.
      You know that Article 14 of the EEC Protocol imposes on the Council the duty, acting unanimously on a proposal from the Commission, to determine the scheme of social benefits applicable to the officials of the Community and one may perhaps deduce from this that this agreement between the Member States excludes the concurrent and automatic application of national legislation. But nothing like this appears in Article 14 of the ECSC Protocol. Must it be admitted then that here is a principle applicable even where the legislative provisions are silent? Whatever might be the arguments of law or natural justice which might be invoked in favour of this view, the question, for the reason which I have indicated, must, it seems, be left open.
      I submit then that the reply to be given to the Gerechtshof, The Hague, is that the expression ‘all taxes on salaries and emoluments paid by the Community’ appearing in Article 11 (b) of the Protocol dated 18 April 1951 on the Privileges and Immunities of the ECSC does not include social security contributions levied by a Member State on an official of that Community.
      It is for the court of The Hague to decide on the costs of the present proceedings.
      (
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         )	Translated from the French.