Source: http://kluwertaxblog.com/2017/09/13/european-court-justice-court-arbitration-disputes-dtas-case-c-64815-austria-v-federal-republic-germany/?doing_wp_cron=1594160813.3007240295410156250000
Timestamp: 2020-07-07 22:26:53
Document Index: 687269893

Matched Legal Cases: ['CJEU ', 'CJEU ', 'CJEU ', 'CJEU ', 'CJEU ', 'CJEU ', 'CJEU ', 'CJEU ', 'CJEU ', 'CJEU ', 'CJEU ', 'CJEU ', 'CJEU ', 'CJEU ', 'CJEU ', 'CJEU ', 'CJEU ', 'CJEU ']

On 12 September 2017, the CJEU confirmed that it has jurisdiction over a dispute between Austria and Germany regarding the interpretation of a double tax convention entered into between the two Member States under article 273 TFEU.1)CJEU 12 September 2017, case number C-648/15, Opinion delivered by Advocate-General Mengozzi on 27 April 2017. The case was the first occasion in which a Member State had brought before the CJEU a dispute on the interpretation of a bilateral tax convention, between itself and another Member State, pursuant to article 273 TFEU.
Although the decision of the CJEU can be welcomed as it eliminates double taxation within the European Union as a result of the parallel exercise of taxing rights by two Member States, the question is whether the CJEU has not stretched its jurisdiction too far. In addition, the decision seems to confirm that the draft Directive for Double Taxation Resolution Mechanisms2)Draft DIRECTIVE on Double Taxation Dispute Resolution Mechanisms in the European Union {COM(2016) 686 final} {SWD(2016) 344 final}. is a missed opportunity when it comes to enhancing uniformity in the interpretation of double tax conventions between Member States.
In relation to the dispute at hand, particularly the third criterion was of importance, i.e. whether resolving a dispute arisen under a Convention for the avoidance of double taxation relates to the subject matter of the Treaties. Referring to the AG’s opinion and the Commission Notice on Double Taxation in the internal market,3)COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL AND THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE Double Taxation in the Single Market /* COM/2011/0712 final */. the CJEU held that the elimination of double taxation relates indeed sufficiently enough to the subject matter of the Treaties, given the beneficial effect of the mitigation of double taxation on the functioning of the internal market under article 3 par. 3 TEU and 26 TFEU.
Interestingly, the CJEU did not refer at all to existing case law,4)CJEU 16 July 2009, Damseaux, C-128/08, EU:C:2009:471, Case C‑298/05 Columbus Container Services [2007] ECR I‑10451, paragraph 46) and order of 19 September 2012, Levy and Sebbag, C-540/11, not published, EU:C:2012:581. where the CJEU has consistently held that,
In its current decision, the CJEU merely stated that it did not have sufficient information to decide on the reciprocal claims from both States to order that the other state should reimburse the wrongfully levied taxes.5)CJEU C-648/15, par. 56 and 57. Does this observation imply that the CJEU considers that it does have jurisdiction to compel one or the other state to act in a certain way?
4. Would refraining from taxation, in spite of the interpretation of the CJEU allowing thereto, qualify as State aid?6)See in this respect also the pending State aid investigation conducted by the European Commission in relation to alledged aid granted by Luxembourg to McDonalds, State aid SA. 38945 (2015/C) (ex 2015/NN) – Luxembourg Alleged aid to McDonald’s, http://europa.eu/rapid/press-release_IP-15-6221_en.htm.
It is noted that the Convention between Germany and Austria is the only convention which appoints the CJEU as court of arbitration, even though it has been in place for more than 15 years. Apparently, other Member States did not have much appetite to follow this example. In addition, the Commission had its doubts too, as to whether or not the CJEU would have jurisdiction over such disputes as indicated in the Impact Assessment7)COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENT Accompanying the document Proposal for a COUNCIL DIRECTIVE on Double Taxation Dispute Resolution Mechanisms in the European Union {COM(2016) 686 final} {SWD(2016) 344 final}, https://ec.europa.eu/taxation_customs/sites/taxation/files/swd_2016_343_en.pdf. regarding the draft directive.
1. ↑ CJEU 12 September 2017, case number C-648/15, Opinion delivered by Advocate-General Mengozzi on 27 April 2017.
2. ↑ Draft DIRECTIVE on Double Taxation Dispute Resolution Mechanisms in the European Union {COM(2016) 686 final} {SWD(2016) 344 final}.
3. ↑ COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL AND THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE Double Taxation in the Single Market /* COM/2011/0712 final */.
4. ↑ CJEU 16 July 2009, Damseaux, C-128/08, EU:C:2009:471, Case C‑298/05 Columbus Container Services [2007] ECR I‑10451, paragraph 46) and order of 19 September 2012, Levy and Sebbag, C-540/11, not published, EU:C:2012:581.
5. ↑ CJEU C-648/15, par. 56 and 57.
6. ↑ See in this respect also the pending State aid investigation conducted by the European Commission in relation to alledged aid granted by Luxembourg to McDonalds, State aid SA. 38945 (2015/C) (ex 2015/NN) – Luxembourg Alleged aid to McDonald’s, http://europa.eu/rapid/press-release_IP-15-6221_en.htm.
7. ↑ COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENT Accompanying the document Proposal for a COUNCIL DIRECTIVE on Double Taxation Dispute Resolution Mechanisms in the European Union {COM(2016) 686 final} {SWD(2016) 344 final}, https://ec.europa.eu/taxation_customs/sites/taxation/files/swd_2016_343_en.pdf.
Johann Müller (International tax professional)/ September 19, 2017 September 20, 2017
Ramon Tomazela (Mariz de Oliveira e Siqueira Campos Advogados)/ September 5, 2017 September 5, 2017