CELEX: C1999/048/32
Language: en
Date: 1999-02-20 00:00:00
Title: Action brought on 21 December 1998 by the Commission of the European Communities against the Kingdom of Belgium (Case C-478/98)

C 48/20               EN                Official Journal of the European Communities                                 20.2.1999
While the Greek authorities have transposed Directive              withholding tax which is levied at source from the party
90/675/EEC into national law, they have not adopted the            making the income payments. However, the Belgian State
measures needed in order for Articles 3 and 4 of that              has waived the withholding tax on the interest payable on
directive to be capable of being applied since they have           the loan in the present case. According to the Belgian
not yet laid down at national level the fees for the               State, it is necessary to exclude Belgian residents from the
veterinary and administrative checks, such fees being              issue, in order to prevent such persons from evading tax
necessary for the application of those provisions.                 by not declaring the interest received.
(1) OJ L 373, 31.12.1990, p. 1.                                    The fiscal reasons advanced cannot justify the restriction
                                                                   in question.
Action brought on 21 December 1998 by the Commission
of the European Communities against the Kingdom of                 Action brought on 30 December 1998 by the Commission
                           Belgium                                 of the European Communities against the French Republic
                       (Case C-478/98)                                                    (Case C-481/98)
                        (1999/C 48/32)                                                     (1999/C 48/33)
An action against the Kingdom of Belgium was brought               An action against the French Republic was brought before
before the Court of Justice of the European Communities            the Court of Justice of the European Communities on
on 21 December 1998 by the Commission of the                       30 December 1998 by the Commission of the European
European Communities, represented by HeÂleÁne Michard              Communities, represented by Enrico Traversa, acting as
and Bernard Mongin, of its Legal Service, acting as                Agent, assisted by Nicole Coutrelis, of the Paris Bar, with
Agents, with an address for service in Luxembourg at the           an address for service in Luxembourg at the Chambers of
Office of Carlos Gómez de la Cruz, Wagner Centre,                  Carlos Gómez de la Cruz, Wagner Centre, Kirchberg.
Kirchberg.
                                                                   The Commission claims that the Court should:
The Commission of the European Communities claims
that the Court should:
                                                                   Ð declare that by introducing and maintaining in force
                                                                       rules on value added tax whereby medicaments
Ð declare that, by prohibiting the acquisition by persons              reimbursable by the social security are taxed at the
    resident in Belgium of certificates relating to a loan             rate of 2,1 %, whereas other medicaments are taxed at
    issued abroad, the Kingdom of Belgium has failed to                the reduced rate of 5,5 %, the French Republic has
    fulfil its obligations under Article 73(b) of the EC               failed to fulfil its obligations under Article 12
    Treaty;                                                            of Council Directive 77/388/EEC (Sixth VAT
                                                                       Directive) (1);
Ð order the Kingdom of Belgium to pay the costs.
                                                                   Ð order the French Republic to pay the costs.
Pleas in law and main arguments adduced in support
                                                                   Pleas in law and main arguments adduced in support
Pursuant to a Royal Decree of 14 October 1994, the
                                                                   Under the third subparagraph of Article 12(3)(a) of
Kingdom of Belgium has issued a loan of DEM 1 000
                                                                   Council Directive 77/388/EEC, as amended by Council
million underwritten by an international syndicate of
                                                                   Directive 92/77/EEC of 19 October 1992 supplementing
banks and financial institutions led by the Dresdner Bank
                                                                   the common system of value added tax and amending
and the Schweizerische Bankverein.
                                                                   Directive 77/388/EEC (approximation of VAT rates) (OJ
                                                                   L 316, 31.10.1992, p. 1) and Council Directive
The conditions governing the loan issue expressly exclude          92/111/EEC of 14 December 1992 amending Directive
applications to subscribe thereto made by persons resident         77/388/EEC and introducing simplification measures with
in Belgium. That condition constitutes a restriction on the        regard to value added tax (OJ L 384, 30.12.1992, p. 47),
free movement of capital which is incompatible with                a reduced rate of the tax may not be lower than 5 % and
Article 73(b) of the EC Treaty.                                    applicable only to supplies of goods referred to in
                                                                   Annex H, which refers, inter alia, to medicaments.
                                                                   However, under Article 28(2)(a) of the directive, reduced
According to the Belgian authorities, the restriction in           rates of tax below the minimum level thus fixed which
question is necessary for fiscal reasons. Income derived           were applicable on 1 January 1991 and comply with
from movable assets of Belgian origin is subject to                Community law may be retained.