The Trustees of the BT Pension Scheme v Commissioners for Her Majesty's Revenue and Customs.
Date: 2017-09-14
30


It follows from the settled case-law of the Court that an acquisition of shares on the capital market solely with the intention of making a financial investment without any intention to influence the management and control of the undertaking falls, in principle, within the scope of Article 63 TFEU, and not within that of Article 49 TFEU, that latter article applying only to those shareholdings which enable the holder to exert a definite influence on a company’s decisions and to determine its activities (see, to that effect, judgment of 13 November 2012, Test Claimants in the FII Group Litigation, C‑35/11, EU:C:2012:707, paragraphs 91 and 92 and the case-law cited).
32


As regards the question, thus clarified, whether Article 63 TFEU confers, in circumstances such as those of the main proceedings, rights on a shareholder receiving shares treated as FIDs, it should be recalled that, according to the settled case-law of the Court, Article 63(1) TFEU lays down a general prohibition on restrictions on the movement of capital between Member States and third countries (see, to that effect, judgment of 28 September 2006, Commission v Netherlands, C‑282/04 and C‑283/04, EU:C:2006:608, paragraph 18 and the case-law cited).
36


Such an absence of a tax credit for shareholders not subject to income tax in respect of dividends, such as the Trustees, has the effect of discouraging those shareholders from investing in the capital of companies resident in the United Kingdom which receive dividends from companies resident outside the United Kingdom, and favouring investments in companies resident in the United Kingdom receiving dividends from other companies resident in that same State (see, by analogy, judgment of 12 December 2006, Test Claimants in the FII Group Litigation, C‑446/04, EU:C:2006:774, paragraph 166).
39


In that regard, it should be recalled that, according to the case-law of the Court, national legislation which applies without distinction to nationals of all the Member States, may generally fall within the scope of the provisions of the FEU Treaty on the free movement of capital only to the extent that it applies to situations related to trade between Member States (see, to that effect, judgment of 5 March 2002, Reisch and Others, C‑515/99, C‑519/99 to C‑524/99 and C‑526/99 to C‑540/99, EU:C:2002:135, paragraph 24).
40


The provisions of the FEU Treaty on the free movement of capital do not apply to situations which are confined in all respects within a single Member State (judgment of 20 March 2014, Caixa d’Estalvis i Pensions de Barcelona, C‑139/12, EU:C:2014:174, paragraph 42).
47


It must be noted, at the outset, that the Member States are obliged, under, inter alia, the principle of sincere cooperation, laid down in the first subparagraph of Article 4(3) TEU, to ensure, in their respective territory, the application of and compliance with EU law and that, under the second subparagraph of Article 4(3) TEU, the Member States are to take any appropriate measure, general or particular, to ensure fulfilment of the obligations resulting from the acts of the institutions of the Union. Moreover, under the second subparagraph of Article 19(1) TEU, Member States are to provide remedies sufficient to ensure effective legal protection in the fields covered by EU law.
49


According to the settled case-law of the Court, Article 63 TFEU may be relied on before national courts and may render national rules that are inconsistent with it inapplicable (see, to that effect, judgments of 14 December 1995, Sanz de Lera and Others, C‑163/94, C‑165/94 and C‑250/94, EU:C:1995:451, paragraph 48, and of 18 December 2007, A, C‑101/05, EU:C:2007:804, paragraph 27).
50


It is also the settled case-law of the Court that the right to a refund of charges levied by a Member State in breach of rules of EU law is the consequence and complement of the rights conferred on individuals by provisions of EU law, as interpreted by the Court. The Member State is therefore required, in principle, to repay charges levied in breach of EU law (see, to that effect, judgments of 9 November 1983, San Giorgio, 199/82, EU:C:1983:318, paragraph 12; of 14 January 1997, Comateb and Others, C‑192/95 to C‑218/95, EU:C:1997:12, paragraph 20, and of 6 September 2011, Lady & Kid and Others, C‑398/09, EU:C:2011:540, paragraph 17).
52


However, it must be recalled that the right to a refund, within the meaning of the case-law cited in paragraph 50 of the present judgment, is concerned not only with the amounts paid to the Member State by way of unlawful charges but also any deducted amount the refund of which is essential in restoring the equal treatment required by the provisions of the FEU Treaty on the freedoms of movement (see, by analogy, judgments of 8 March 2001, Metallgesellschaft and Others, C‑397/98 and C‑410/98, EU:C:2001:134, paragraph 87; of 12 December 2006, Test Claimants in the FII Group Litigation, C‑446/04, EU:C:2006:774, paragraph 205, and of 19 July 2012, Littlewoods Retail and Others, C‑591/10, EU:C:2012:478, paragraph 25), including, consequently, the amounts due to the individual in respect of a tax credit of which he has been deprived under the national legislation precluded by EU law.
54


Next, it must be recalled that, according to the settled case-law of the Court, both the administrative authorities and the national courts called upon, within the exercise of their respective jurisdiction, to apply provisions of EU law, are under a duty to give full effect to those provisions, if necessary refusing of their own motion to apply any conflicting provision of national law, and it is not necessary for that court to request or to await the prior setting aside of that provision of national law by legislative or other constitutional means (see, to that effect, in relation to administrative authorities, judgments of 22 June 1989, Costanzo, 103/88, EU:C:1989:256, paragraph 31, and of 29 April 1999, Ciola, C‑224/97, EU:C:1999:212, paragraphs 26 and 30, and, in relation to courts, judgments of 9 March 1978, Simmenthal, 106/77, EU:C:1978:49, paragraph 24, and of 5 July 2016, Ognyanov, C‑614/14, EU:C:2016:514, paragraph 34).
55


Moreover, that obligation does not prevent the national courts with jurisdiction from applying, among the various procedures of the internal legal order, those which are appropriate to safeguard the individual rights conferred by EU law (see, to that effect, judgments of 22 October 1998, IN. CO. GE.’90 and Others, C‑10/97 to C‑22/97, EU:C:1998:498, paragraph 21, and of 19 July 2012, Littlewoods Retail and Others, C‑591/10, EU:C:2012:478, paragraph 33).
57


As regards, last, the procedural rules governing such an action, it is not for the Court of Justice to assign a legal classification to the actions brought by the Trustees before the referring court, as it is for them to specify the nature and basis of their action, subject to review by the referring court. It is apparent from the case-law of the Court, however, that individuals must have an effective legal remedy enabling them to obtain payment of the tax credit of which they have been unduly deprived (see, by analogy, judgment of 12 December 2006, Test Claimants in the FII Group Litigation, C‑446/04, EU:C:2006:774, paragraphs 201 and 220).
58


Thus, although, in the absence of EU rules in the area of payment of tax credits of which the beneficiaries have been unduly deprived, it is for the domestic legal system of each Member State to determine the procedural rules governing actions intended to ensure the protection of directly effective EU law rights, under the principle of equivalence, those rules must not be less favourable than those relating to similar domestic actions (see, to that effect, judgments of 16 December 1976, Rewe-Zentralfinanz and Rewe-Zentral, 33/76, EU:C:1976:188, paragraph 5; of 8 March 2001, Metallgesellschaft and Others, C‑397/98 and C‑410/98, EU:C:2001:134, paragraph 85; of 12 December 2006, Test Claimants in the FII Group Litigation, C‑446/04, EU:C:2006:774, paragraph 203, and of 6 October 2015, Târșia, C‑69/14, EU:C:2015:662, paragraphs 26 and 27).
59


Furthermore, under the principle of effectiveness, the Member States are responsible for ensuring that the rights conferred by EU law are effectively protected in each case and, in particular, for ensuring compliance with the right to an effective remedy and to a fair hearing enshrined in Article 47(1) of the Charter of Fundamental Rights of the European Union (see, to that effect, judgments of 15 September 2016, Star Storage and Others, C‑439/14 and C‑488/14, EU:C:2016:688, paragraph 46; of 8 November 2016, Lesoochranárske zoskupenie VLK, C‑243/15, EU:C:2016:838, paragraph 65, and of 16 May 2017, Berlioz Investment Fund, C‑682/15, EU:C:2017:373, paragraph 44).