Denkavit International BV, VITIC Amsterdam BV and Voormeer BV v Bundesamt für Finanzen.
Date: 1996-10-17
20 The Commission adds that, in the Proposal for a directive which it submitted to the Council on 16 January 1969 (JO 1969 C 39, p. 1)), it recommended that a company which ordinarily satisfied the requisite conditions should cease, with retrospective effect, to be regarded as a parent company if that company disposed of its holding within two years of acquiring it. So, according to the Commission, the tax advantage must be granted as soon as the holding is acquired, subject to subsequent confirmation that the minimum holding period has been complied with.
22 It is to be noted, first, that, as appears particularly from the third recital in its preamble, the Directive seeks, by the introduction of a common tax system, to eliminate any disadvantage to cooperation between companies of different Member States as compared with cooperation between companies of the same Member State and thereby to facilitate cross-border cooperation. Thus, with a view to avoiding double taxation, Article 5(1) of the Directive provides for exemption in the State of the subsidiary from withholding tax upon distribution of profits.
24 However, reference must be made to the actual wording of the second indent of Article 3(2) of the Directive, according to which a parent company may be deprived of the exemption from withholding tax only if it "does not maintain such a holding for an uninterrupted period of at least two years."
26 Moreover, the interpretation is confirmed by the purpose of the Directive, which, as already explained in paragraph 22 above, is to facilitate the tax arrangements governing cross-border cooperation. Member States cannot therefore, in this regard, unilaterally introduce restrictive measures such as the requirement, as in this instance, that a minimum holding period must already have been completed when the profits in respect of which the tax advantage is sought are distributed.
27 Likewise, the Member States' option to lay down a minimum period during which the parent company must maintain a holding in the subsidiary is to be interpreted strictly, since it constitutes a derogation from the principle of exemption from withholding tax provided for in Article 5(1) of the Directive. That option cannot, therefore, be given an interpretation going beyond the actual words of Article 3(2), to the detriment of beneficiary undertakings.
29 That argument cannot be accepted. Expressions of intent on the part of Member States in the Council, such as those on which the Governments rely in their observations, have no legal status if they are not actually expressed in the legislation. Legislation is addressed to those affected by it. They must, in accordance with the principle of legal certainty, be able to rely on what it contains.
31 It is to be noted that Article 1(2) of the Directive is a provision of principle, the content of which is explained in detail in Article 3(2) thereof. Thus, Article 3(2) ° and this is not disputed by any of the parties which have submitted observations to the Court ° is aimed in particular at counteracting abuse whereby holdings are taken in the capital of companies for the sole purpose of benefiting from the tax advantages available and which are not intended to be lasting. In those circumstances, it is not appropriate to refer to Article 1(2) of the Directive in interpreting Article 3(2).
39 It is true that Article 3(2) of the Directive gives Member States the option of derogating from that principle where the parent company does not maintain its holding in the subsidiary for a minimum period and gives those States latitude as regards both the duration of that period, which may not exceed two years, and, as already found, the administrative procedures applicable. However, those factors do not make it impossible to determine minimum rights on the basis of the provisions of principle contained in Article 5 of the Directive (see, in this regard, Case C-91/92 Faccini Dori v Recreb [1994] ECR I-3325, paragraph 17).
44 Suffice it to recall in this regard that, according to settled case-law, it is for the national courts alone, before which the proceedings are pending and which must assume responsibility for the judgment to be given, to determine, having regard to the particular features of each case, both the need for a preliminary ruling to enable them to give judgment and the relevance of the questions which they refer to the Court. A request for a preliminary ruling from a national court may be rejected only if it is quite obvious that the interpretation of Community law sought by that court bears no relation to the actual nature of the case or the subject-matter of the action (see, in particular, Case C-129/94 Ruiz Bernáldez [1996] ECR I-0000, paragraph 7).
47 According to the consistent case-law of the Court, the principle of State liability for loss and damage caused to individuals as a result of breaches of Community law for which the State can be held responsible is inherent in the system of the Treaty (see, in particular, Joined Cases C-46/93 and C-48/93 Brasserie du Pêcheur and Factortame [1996] ECR I-0000, paragraph 31, and Joined Cases C-178/94, C-179/94, C-188/94, C-189/94 and C-190/94 Dillenkofer and Others [1996] ECR I-0000, paragraph 20).
48 In those judgments, the Court, having regard to the circumstances of the cases, held that Community law recognizes the existence of a right to reparation when three conditions are met: the rule of law infringed must be intended to confer rights on individuals; the breach must be sufficiently serious; and there must be a direct causal link between the breach of the obligation resting on the State and the damage suffered by the injured parties (Brasserie du Pêcheur and Factortame, cited above, paragraph 51, and Dillenkofer and Others, cited above, paragraphs 21 and 23). The Court has in particular held that those conditions apply where a Member State incorrectly transposes a Community directive into national law (Case C-392/93 British Telecommunications [1996] ECR I-0000, paragraph 40).
49 While it is, in principle, for national courts to determine whether the conditions for State liability for breach of Community law are met, it must be held that in this instance the Court has all the information necessary in order to judge whether the facts presented are to be characterized as a sufficiently serious breach of Community law.
50 It follows from the Court' s case-law that a breach is sufficiently serious if a Community institution or a Member State, in the exercise of its rule-making powers, manifestly and gravely disregards the limits on those powers (Brasserie du Pêcheur and Factortame, cited above, paragraph 55, and Dillenkofer and Others, cited above, paragraph 25). One of the factors that may be taken into consideration in this regard is the clarity and precision of the rule breached (Brasserie du Pêcheur and Factortame, cited above, paragraph 56, and British Telecommunications, cited above, paragraph 42).