Lady & Kid A/S and Others v Skatteministeriet.
Date: 2011-09-06
17. In that regard, it must be borne in mind that the right to a refund of charges levied in a Member State in breach of the rules of European Union law is the consequence and complement of the rights conferred on individuals by provisions of European Union law prohibiting such charges. The Member State is therefore required in principle to repay charges levied in breach of European Union law (see Case 199/82 San Giorgio  [1983] ECR 3595, paragraph 12; Joined Cases C‑441/98 and C‑442/98 Michaïlidis [2000] ECR I‑7145, paragraph 30; Case C‑309/06 Marks & Spencer  [2008] ECR I‑2283, paragraph 35; and Case C‑264/08 Direct Parcel Distribution Belgium  [2010] ECR I‑0000, paragraph 45).
18. However, by way of exception to the principle of reimbursement of taxes incompatible with European Union law, repayment of a tax wrongly paid can be refused where it would entail unjust enrichment of the persons concerned. The protection of the rights so guaranteed by the legal order of the European Union does not require repayment of taxes, charges and duties levied in breach of European Union law where it is established that the person required to pay such charges has actually passed them on to other persons (see Comateb and Others , paragraph 21).
19. In such circumstances, the burden of the charge levied but not due has been borne not by the trader, but by the purchaser to whom the cost has been passed on. Therefore, to repay the trader the amount of the charge already received from the purchaser would be tantamount to paying him twice over, which may be described as unjust enrichment, whilst in no way remedying the consequences for the purchaser of the illegality of the charge ( Comateb and Others , paragraph 22).
20. None the less, since such a refusal of reimbursement of a tax levied on the sale of goods is a limitation of a subjective right derived from the legal order of the European Union, it must be interpreted narrowly. Accordingly, the direct passing on to the purchaser of the tax wrongly levied constitutes the sole exception to the right to reimbursement of tax levied in breach of European Union law.
21. The Court has also held that, even where it is established that the burden of the charge levied though not due has been passed on to third parties, repayment to the trader of the amount thus passed on does not necessarily entail his unjust enrichment, since even where the charge is wholly incorporated in the price, the taxable person may suffer as a result of a fall in the volume of his sales (see Comateb and Others , paragraphs 29 to 32; Michaïlidis , paragraphs 34 and 35; and Weber’s Wine World and Others , paragraph 98 and 99).
24. That abolition falls within the ambit of choices made by the State in the field of taxation which express its general policy in economic and social matters. Such a choice can easily have the most diverse of consequences which, disregarding the potential difficulties in ascertaining whether and, if so, to what extent one tax has, in reality, purely and simply replaced another, preclude the reimbursement of an unlawful tax in such a context’s being regarded as giving rise to unjust enrichment.
25. That conclusion cannot be called into question by the Court’s judgments in Case 177/78 McCarren  [1979] ECR 2161 and Case 222/82 Apple and Pear Development Council  [1983] ECR 4083. Even if, in paragraph 25 of the judgment in McCarren  and paragraph 41 of the judgment in Apple and Pear Development Council , the Court did not rule out that the national court, applying its national law, could take into consideration possible methods of refusing reimbursement of an unlawful tax other than passing on, it must be noted that the Court, in paragraph 20 of the present judgment, states that the direct passing on of the tax wrongly levied to the purchaser constitutes the sole exception to the right to reimbursement of tax levied in breach of European Union law.