Modelo SGPS SA v Director-Geral dos Registos e Notariado.
Date: 1999-09-29
3 The aim of the Directive, as is clear from the preamble thereto, is to encourage the free movement of capital, which is regarded as essential for the creation of an economic union whose characteristics are similar to those of a domestic market.  As far as concerns taxes on the raising of capital, the pursuit of that objective presupposes the abolition of indirect taxes in force in the Member States until then and imposing in their place a duty charged only once in the common market and at the same level in all the Member States (Case C-188/95 Fantask and Others [1997] ECR I-6783, paragraph 13).
8 Article 12(1) of the Directive sets out an exhaustive list of taxes and duties other than capital duty which, by derogation from Article 10, may be levied on capital companies in respect of transactions listed therein (see Case 36/86 Dansk Sparinvest [1988] ECR 409, paragraph 9). Article 12(1)(e) of the Directive mentions `duties paid by way of fees or dues'.
The relevant national legislation
18 It appears from the Portuguese Government's reply to questions put by the Court that, in Portugal, notaries are employed by the State and have the same rights and duties as other civil servants, their remuneration being made up partly of a fixed amount - determined in accordance with the same criteria as are applied to all other civil servants - and partly of a variable amount representing a share of the monies received in payment.
19 Notaries prepare a monthly statement of the monies received in payment of their charges.  From the total amount thus obtained, the percentage amounts payable to the notary and the members of his staff are deducted.  The balance is paid to the Cofre dos Conservadores, Notários e Funcionários de Justiça (Fund for Registrars, Notaries and Officers of the Ministry of Justice; hereinafter `the Fund').
20 According to the Portuguese Government, the Fund is responsible for paying the fixed portion of the salaries payable to notaries and other civil servants; it also meets the cost of training notaries and of acquiring office space and equipment for them; and, subject to authorisation from the Ministry of Justice, it covers other expenditure in the field of legal administration.
21 Thus, a proportion of the charges at issue in the main proceedings, payable pursuant to a rule of law laid down by the State, is paid by a private individual to the State for the financing of its official business.
22 In the light of the objectives pursued by the Directive, in particular the abolition of indirect taxes having the same characteristics as capital duty, charges collected by public officials for notarising a transaction covered by the Directive, which are in part paid to the State in order to subsidise public expenditure, must be regarded as taxes for the purposes of the Directive.
23 Consequently, the Directive must be interpreted as meaning that charges constitute taxes for the purposes of the Directive where they are collected for drawing up notarially attested acts recording a transaction covered by the Directive, under a system where notaries are employed by the State and the charges in question are paid in part to that State for the financing of its official business.
The prohibition laid down in Article 10 of the Directive
24 Article 10(c) of the Directive prohibits, in addition to capital duty, taxes in respect of registration or any other formality required before the commencement of business, to which a company may be subject by reason of its legal form. That prohibition is justified by the fact that even though the taxes in question are not levied on capital contributions as such, they are nevertheless levied on account of formalities connected with the company's legal form, that is to say, on account of the instrument employed for raising capital, so that their continued existence would similarly risk frustrating the aims of the Directive (Case C-2/94 Denkavit Internationaal and Others [1996] ECR I-2827, paragraph 23).
25 That prohibition covers not only charges paid for the registration of new companies, but also duties payable by companies for the registration of increases in capital since these, too, are levied on account of an essential formality connected with the legal form of the companies in question.  While registration of an increase in capital is not, strictly speaking, a formality required before the commencement of business by a company, it is none the less necessary for the carrying on of that business (Fantask and Others, paragraph 22).
26 Since it is compulsory under Portuguese law to register increases in share capital by a notarially attested act, it follows that this constitutes an essential formality connected with the legal form of the company and that it is necessary if the company is to carry on business.
27 Moreover, a tax in the form of a charge collected for drawing up a notarially attested act recording a change in the name and registered office of a capital company must be regarded as having the same characteristics as capital duty in so far as it is calculated by reference to the company's share capital.  Otherwise, it would be possible for Member States, while refraining from imposing taxes on the raising of capital as such, to tax that capital whenever the company amended its articles of association.  That would enable the objective pursued by the Directive to be circumvented.
29 The distinction drawn between taxes prohibited by Article 10 of the Directive and duties paid by way of fees or dues implies that the latter comprise only remuneration the amount of which is calculated on the basis of the cost of the service rendered.  Where the amount payable is wholly unrelated to the cost of the service in question or is calculated, not by reference to the costs of the transaction for which it constitutes the consideration, but to all the operational and capital costs incurred by the department responsible for that transaction, it would have to be regarded as a tax falling exclusively within the prohibition laid down in Article 10 of the Directive (see Joined Cases C-71/91 and C-178/91 Ponente Carni and Cispadana Costruzioni [1993] ECR I-1915, paragraphs 41 and 42).
30 Furthermore, charges with no upper limit which increase directly in proportion to the nominal value of the capital raised cannot, by their very nature, constitute duties paid by way of fees or dues within the meaning of the Directive. Even though in some cases the complexity of a registration may be linked to the amount of capital raised, the amount of the charge will generally bear no relation to the costs actually incurred by the administrative body which provided the service (see, to that effect, Fantask and Others, paragraph 31).
31 In the present case, even though the charge is levied in accordance with a sliding scale, the amount of tax payable increases in direct proportion to the nominal value of the capital raised.  Moreover, given that in the case of values above PTE 10 000 000 the charge is levied at the not inconsiderable rate of 0.3%, and that no upper limit has been set, the amount payable could be substantial.
33 The Court has consistently held that wherever the provisions of a directive appear, so far as their subject-matter is concerned, to be unconditional and sufficiently precise, they may be relied upon by an individual against the State in proceedings before the national courts where the State has failed to transpose the directive into national law by the end of the period prescribed or has failed to do so correctly (see, inter alia, Case C-236/92 Comitato di Coordinamento per la Difesa della Cava and Others [1994] ECR I-483, paragraph 8).
34 On that point, the Court has already observed that the prohibition laid down in Article 10 of the Directive is expressed in sufficiently precise and unconditional terms to be relied upon by individuals in the national courts in order to contest a provision of national law which is contrary to the Directive (Case C-347/96 Solred [1998] ECR I-937, paragraph 29).