Niels Nygård v Svineafgiftsfonden, and Ministeriet for Fødevarer, Landbrug og Fiskeri.
Date: 2002-04-23
17 It should be noted at the outset that, as the Court has consistently held, provisions relating to charges having equivalent effect and those relating to discriminatory internal taxation cannot be applied together, with the result that, under the system established by the Treaty, the same charge cannot belong to both categories at the same time (see, inter alia, Case C-347/95 UCAL [1997] ECR I-4911, paragraph 17, and Case C-213/96 Outokumpu [1998] ECR I-1777, paragraph 19).
19 It is settled case-law ((see, inter alia, Case C-90/94 Haahr Petroleum [1997] ECR I-4085, paragraph 20, and Outokumpu, cited above, paragraph 20) that any pecuniary charge, whatever its designation and mode of application, which is imposed unilaterally on goods by reason of the fact that they cross a frontier, and which is not a customs duty in the strict sense, constitutes a charge having equivalent effect within the meaning of Articles 9 and 12 of the Treaty. However, such a charge may not be so characterised if it forms part of a general system of internal dues applying systematically to categories of products according to objective criteria applied without regard to the origin of the products, in which case it falls within the scope of Article 95 of the Treaty.
20 This latter case, however, presupposes that the charge is imposed on national products processed or marketed on the national market and on national products exported in an unprocessed state at the same marketing stage, and that the chargeable event is identical for both classes of products (see, by way of analogy, in regard to charges levied on national products and imported products, Joined Cases C-149/91 and C-150/91 Sanders Adour and Guyomarc'h Orthez Nutrition Animale [1992] ECR I-3899, paragraph 17, and Outokumpu, paragraph 24).
21 It also follows from the Court's case-law that, for the purposes of the legal characterisation of a charge levied on national products processed or marketed on the national market and on national products exported in an unprocessed state in accordance with identical criteria, it may be necessary to take into account the purpose for which the revenue from the charge is applied (see, by way of analogy, UCAL, cited above, paragraph 20).
22 Thus, if the revenue from such a charge is intended to finance activities for the special advantage of the taxed national products processed or marketed on the national market, it may follow that the charge imposed on the basis of the same criteria nevertheless constitutes discriminatory taxation in so far as the fiscal burden on products processed or marketed on the national market is neutralised by the advantages which the charge is used to finance whilst the charge on the products exported in an unprocessed state constitutes a net burden (see, by way of analogy, Case 73/79 Commission v Italy [1980] ECR 1533, paragraph 15, Joined Cases C-78/90 to C-83/90 Compagnie Commerciale de l'Ouest and Others [1992] ECR I-1847, paragraph 26, and UCAL, paragraph 21).
23 It is in this regard settled case-law that if the advantages stemming from the use of the revenue from a charge forming part of a general system of internal charges applying systematically to national products processed and marketed on the national market and to products exported in an unprocessed state fully offset the burden borne by the national product processed and marketed on the national market when it is placed on the market, that charge constitutes a charge having an effect equivalent to a customs duty, contrary to Articles 9 and 12 of the Treaty (see, by way of analogy, Compagnie Commerciale de l'Ouest and Others, cited above, paragraph 27, Case C-17/91 Lornoy and Others [1992] ECR I-6523, paragraph 21, and Case C-72/92 Scharbatke [1993] ECR I-5509, paragraph 10). On the other hand, if the advantages accruing to the taxed national products processed and marketed on the national market from the use of the revenue generated by the charge offset only partially the burden borne by those products, such a charge will constitute a breach of the prohibition of discrimination laid down by Article 95 of the Treaty (see inter alia, by way of analogy, UCAL, paragraph 22).
24 In order to assess the levy in issue in the main proceedings in the light of the principles just outlined, it is first necessary to note that it is common ground that this levy forms part of a general system of taxation of Danish agricultural products covering several production levy schemes. It is also common ground that these production levy schemes have the same legal basis, namely the Enabling Law, and are intended to finance specific funds in individual sectors, the revenue from which is allocated to objectives relating to the production and marketing of Danish agricultural products.
28 With regard to the question of determining the transaction which constitutes the event triggering the levy in the case in the main proceedings, it should be recalled that, in its judgment in Joined Cases 36/80 and 71/80 Irish Creamery Milk Suppliers Association and Others [1981] ECR 735, at paragraph 23, the Court ruled, in regard to a tax charged, in the case of exportation of live animals for purposes other than their immediate slaughter, when the animals were exported, whereas animals not exported were exempted from it until the time of their delivery for slaughter, that the event giving rise to such a tax is the withdrawal of those animals from the national herd, whether for export or for slaughter. From this the Court concluded that a domestic duty charged on animals exported live at the time of their delivery for export does not come under the prohibition of charges having equivalent effect to customs duties on exports if it is also applied, systematically and in accordance with the same criteria, to animals not being exported at the time of their delivery for slaughter (Irish Creamery Milk Suppliers Association and Others, cited above, paragraph 24).
30 In those circumstances, no difference may be discerned in the fact that pigs exported live are taxed at the time of exportation, whereas pigs intended for slaughter on the national market are taxed at the time of supply for purposes of slaughter, as in real economic terms those two moments correspond to the same marketing stage, both operations being carried out with a view to releasing the pigs from national primary production (see, along these lines, Sanders Adour and Guyomarc'h Orthez Nutrition Animale, cited above, paragraph 18, and Outokumpu, paragraph 25).
38 As it stands at present, Community law does not contain any provision designed to prohibit the effects of double taxation occurring in the case of charges, such as that in issue in the main proceedings, which are governed by independent national legislation, and, while the elimination of such effects is desirable in the interests of the free movement of goods, it may none the less result only from the harmonisation of national systems (see, along these lines, Case 142/77 Larsen and Kjerulff [1978] ECR 1543, paragraphs 33 to 35, and Scharbatke, cited above, paragraphs 14 and 15).
39 Finally, with regard to the use made of the revenue generated by the levy in issue in the main proceedings, it is clear from the order for reference that the national court regards it as established that this revenue is not solely allocated to financing activities exclusively benefiting the production of pigs for slaughter on the national market, but that it is used to finance activities of more general benefit to primary production of pigs in Denmark, including, therefore, the production of pigs for live export.
41 With regard to the classification of a levy charged on exported goods under Article 95 of the Treaty, it must first be noted that, according to the Court's case-law, that article must be interpreted as also prohibiting any tax discrimination against products intended for export to other Member States (see Larsen and Kjerulff, cited above, paragraph 27).
42 As to whether a levy such as that in issue in the main proceedings is compatible with Article 95 of the Treaty, it must be borne in mind that, as pointed out in paragraph 23 of the present judgment, such a levy, although applicable without distinction, must none the less be regarded as constituting a breach of the prohibition of discrimination laid down by Article 95 of the Treaty if the advantages accruing to the taxed national products processed and marketed on the national market from the use of the revenue generated by the charge offset only partially the burden borne by those products and thus adversely affect exported domestic products (see, by way of analogy, Case C-266/91 CELBI [1993] ECR I-4337, paragraph 14). In that case, the charge levied on the exported product, which is in principle lawful, will have to be prohibited to the extent to which it partially compensates the charge borne by the product processed or marketed on the national market and will have to be reduced proportionally (see, by way of analogy, Case 94/74 IGAV [1975] ECR 699, paragraph 13, Scharbatke, paragraph 10, and UCAL, paragraph 23).
43 According to settled case-law, it is for the national court to establish the extent of any discrimination against exported products (see, by way of analogy, Scharbatke, paragraph 11). For that purpose it must check, during a reference period, on the financial equivalence of the total amounts levied on national products processed or marketed on the domestic market in connection with the charge in question and the advantages afforded exclusively to those products (see inter alia, by way of analogy, UCAL, paragraph 25).
51 It is necessary to state at the outset that, according to settled case-law, Articles 12 and 95 of the Treaty are directly effective and confer on individuals rights which national courts must protect (see, inter alia, Lornoy and Others, cited above, paragraph 24).
53 With regard to a parafiscal charge, such as that in issue in the main proceedings, which may fall within the scope of either Article 12 or Article 95 of the Treaty, the Court has ruled that the use to which the revenue from that charge is put, for the benefit of domestic products, may constitute State aid incompatible with the common market if the conditions for the application of Article 92 of the EC Treaty (now, after amendment, Article 87 EC) are met, this being a matter which the Commission alone is competent to determine in accordance with the procedure laid down for that purpose in Article 93 of the Treaty and subject to review by the Court (see Scharbatke, paragraphs 18 and 20).
54 The Court has also ruled that, while the procedure provided for in Articles 92 and 93 of the Treaty leaves a wide discretion to the Commission to come to a decision on the compatibility of a system of State aid with the requirements of the common market, it is clear from the general scheme of the Treaty that that procedure must never produce a result which is contrary to the specific provisions of the Treaty concerning, for example, internal taxation (Commission v Italy, cited above, paragraph 11).
55 As the Court pointed out in paragraph 8 of its judgment in Commission v Italy, while Articles 92 and 93 of the Treaty, on the one hand, and Article 95 of the Treaty, on the other, pursue the same objective, namely to ensure that the two categories of intervention on the part of a Member State, that is to say, the grant of aid, on the one hand, and the imposition of discriminatory taxation, on the other, do not distort the conditions of competition within the common market, the application of those provisions presupposes distinct conditions peculiar to the two kinds of State measure which they are intended to govern and they differ, furthermore, as to their legal consequences, particularly inasmuch as in the implementation of Articles 92 and 93, unlike Article 95, the intervention of the Commission plays a large part. From this the Court concluded that discriminatory taxation practices are not exempted from the application of Article 95 by reason of the fact that they may at the same time be described as a means of financing State aid (see Commission v Italy, paragraph 9, and Case 17/81 Pabst & Richarz [1982] ECR 1331, paragraph 22).
56 With more particular regard to the procedures allowing a charge forming part of an aid scheme to be examined from the perspective of the various Treaty provisions which may apply, the Court has ruled that the existence of the procedure provided for in Article 93 of the Treaty does not in any way prevent the compatibility of an aid scheme in relation to Community rules other than those contained in Article 92 of the Treaty from being assessed under the procedure provided for in Article 226 EC (see Case 290/83 Commission v France [1985] ECR 439, paragraph 17), as well as, in the case of directly effective provisions of the Treaty, by national courts (see, along these lines, Case 74/76 Iannelli & Volpi [1977] ECR 557, paragraph 14).
57 Admittedly, the possibility for national courts to assess the arrangements of a system of aid in the light of Treaty provisions other than those of Articles 92 and 93 presupposes that the arrangements in question can be evaluated separately, and are thus conditions or factors which, though forming part of the system of aid in question, are not necessary for the attainment of its object or for its functioning (Iannelli & Volpi, cited above, paragraph 14).
58 If that is, however, the case, there are no reasons based on the division of powers under Articles 92 and 93 of the Treaty which permit the conclusion to be drawn that, if other provisions of the Treaty which have direct effect are infringed, those provisions may not be invoked before national courts simply because the factor in question is an aspect of aid (Iannelli & Volpi, paragraph 14).
59 The Court has consistently held in this regard that it is incumbent on the national courts to safeguard the rights of individuals when faced with any disregard by national authorities of the prohibition on the implementation of aid, which is set out in the final sentence of Article 93(3) of the Treaty and is directly effective. Such disregard, if relied on by individuals and confirmed by the national courts, must lead those courts to draw from it all the consequences in accordance with their national law, without their decisions, however, implying an assessment of the compatibility of the aid with the common market, which is a matter within the exclusive competence of the Commission, subject to review by the Court (see CELBI, cited above, paragraph 23, Case C-354/90 Fédération Nationale du Commerce Extérieur des Produits Alimentaires and Syndicat National des Négociants et Transformateurs de Saumon [1991] ECR I-5505, paragraph 14, and Case C-39/94 SFEI and Others [1996] ECR I-3547, paragraphs 40 and 42).
60 Although, as follows from paragraph 41 of SFEI and Others, cited above, the national courts and the Commission fulfil complementary and separate roles within the actual system of supervision of State aid established by the Treaty, the same applies, a fortiori, where what is in issue is the examination of a parafiscal charge, intended to finance an aid scheme, in the light of Treaty provisions other than those concerning State aid, with a view to remedying, if necessary, infringements of Community law which have not been confirmed in the procedure provided for under Article 93 of the Treaty.
61 While any examination into whether an aid scheme is compatible with the common market is a matter for the Commission, regard being had to the fact that such an examination involves assessments of an economic and social nature which must be made within a Community context (see, in this regard, Case C-156/98 Germany v Commission [2000] ECR I-6857, paragraph 67), it cannot be disputed that, regarding the assessment of the manner in which the revenue generated by a domestic parafiscal charge is allocated, the national courts are best placed to collate the necessary information and to carry out the assessments required in that regard on the basis of data which should normally follow from the accounts and other documents relating to the management of the bodies which collect the levy and allocate subsidies and other benefits.