Ministre du Budget, des Comptes publics et de la Fonction publique v Accor SA.
Date: 2011-09-15
19. In that regard, it is clear from the case-law that the Court may of its own motion, or on a proposal from the Advocate General, or at the request of the parties, order the reopening of the oral procedure in accordance with Article 61 of its Rules of Procedure if it considers that it lacks sufficient information, or that the case must be dealt with on the basis of an argument which has not been debated between the parties (see Cases C‑284/06 Burda [2008] ECR I‑4571, paragraph 37 and the case-law cited, and Case C‑266/09 Stichting Natuur en Milieu and Others [2010] ECR I‑0000, paragraph 27).
30. In this connection, it is to be noted that the tax treatment of dividends may fall within Article 49 TFEU on freedom of establishment and Article 63 TFEU on the free movement of capital (Joined Cases C‑436/08 and C‑437/08 Haribo Lakritzen Hans Riegel and Österreichische Salinen [2011] ECR I‑0000, paragraph 33 and the case-law cited).
31. As regards the question whether national legislation falls within the scope of one or other of the freedoms of movement, it is clear from what is now well-established case-law that the purpose of the legislation concerned must be taken into consideration ( Haribo Lakritzen Hans Riegel and Österreichische Salinen , paragraph 34 and case-law cited).
32. It has already been held in that regard that national legislation intended to apply only to those shareholdings which enable the holder to exert a definite influence on a company’s decisions and to determine its activities falls within the provisions of the Treaty on freedom of establishment (see Test Claimants in the FII Group Litigation , paragraph 37, and Case C‑81/09 Idrima Tipou  [2010] ECR I‑0000, paragraph 47). However, national provisions which apply to shareholdings acquired solely with the intention of making a financial investment without any intention to influence the management and control of the undertaking must be examined exclusively in light of the free movement of capital ( Haribo Lakritzen Hans Riegel and Österreichische Salinen , paragraph 35 and case-law cited).
37. In that regard, it must be borne in mind that, under the cooperation procedure established by Article 267 TFEU, it is not for the Court of Justice but for the national court to ascertain the facts which have given rise to the dispute and to establish the consequences which they have for the judgment which it is required to deliver (see, inter alia, Case C‑435/97 WWF and Others [1999] ECR I-5613, paragraph 32; Case C‑510/99 Tridon [2001] ECR I-7777, paragraph 28; and Case C‑291/05 Eind  [2007] ECR I‑10719, paragraph 18).
39. The freedom of establishment conferred by Article 49 TFEU on EU nationals, which entails for them access to, and pursuit of, activities as self-employed persons and the forming and management of undertakings, under the same conditions as those laid down for its own nationals by the laws of the Member State of establishment, includes, pursuant to Article 54 TFEU, the right of companies or firms formed in accordance with the laws of a Member State and having their registered office, central administration or principal place of business within the European Union, to pursue their activities in the Member State concerned through a subsidiary, a branch or an agency (see, inter alia, Case C‑307/97 Saint Gobain ZN [1999] ECR I-6161, paragraph 35; Case C‑471/04 Keller Holding [2006] ECR I-2107, paragraph 29; and Case C‑196/04 Cadbury Schweppes and Cadbury Schweppes Overseas  [2006] ECR I‑7995, paragraph 41).
40. Even though, according to their wording, the Treaty provisions concerning freedom of establishment are directed to ensuring that foreign nationals and companies are treated in the host Member State in the same way as nationals of that State, they also prohibit the Member State of origin from hindering the establishment in another Member State of one of its nationals or of a company incorporated under its legislation (see, inter alia, Case C‑264/96 ICI  [1998] ECR I‑4695, paragraph 21, and Cadbury Schweppes and Cadbury Schweppes Overseas , paragraph 42).
43. In that regard, it follows from the case-law that in structuring their tax system and, in particular, when they establish a mechanism for preventing or mitigating the imposition of a series of charges to tax or economic double taxation, Member States must comply with the requirements of EU law and especially those imposed by the Treaty provisions concerning the freedoms of movement (see Test Claimants in the FII Group Litigation , paragraph 45).
44. It is thus clear from the case-law that, whatever the mechanism adopted for preventing or mitigating the imposition of a series of charges to tax or economic double taxation, the freedoms of movement guaranteed by the Treaty preclude a Member State from treating foreign-sourced dividends less favourably than nationally-sourced dividends, unless such a difference in treatment concerns situations which are not objectively comparable or is justified by overriding reasons in the public interest (see, to that effect, Case C‑315/02 Lenz  [2004] ECR I‑7063, paragraphs 20 to 49; Case C‑319/02 Manninen  [2004] ECR I‑7477, paragraphs 20 to 55; and Test Claimants in the FII Group Litigation , paragraph 46).
45. In the context of a tax rule which seeks to prevent or to mitigate the taxation of distributed profits, the situation of a parent company receiving foreign-sourced dividends is comparable to that of a parent company receiving nationally-sourced dividends in so far as, in each case, the profits made are, in principle, liable to be subject to a series of charges to tax (see Test Claimants in the FII Group Litigation , paragraph 62).
51. In view of the unfavourable treatment applied to dividends received from a subsidiary established in another Member State as compared to that applied to dividends received from a resident subsidiary, a parent company might have been dissuaded from carrying on its activities through the intermediary of subsidiaries established in other Member States (see, to that effect, Case C-168/01 Bosal  [2003] ECR I‑9409, paragraph 27 and Keller Holding , paragraph 35).
53. The French Government points out, first, that the tax credit was implemented as a consequence of an autonomous decision by the competent organs of a parent company and not as a consequence of the legislation at issue in the main proceedings, since it is the decision of that parent company to redistribute the dividends paid by a French subsidiary which results in the tax credit applied to the dividends in question being set off against the advance payment. Referring to Case C‑190/98 Graf [2000] ECR I‑493, paragraphs 24 and 25, the French Government also contends that the possible negative effect of the provisions at issue in the main proceedings depends upon a decision by the competent organs of the parent company which is so hypothetical that those provisions cannot be considered to constitute an obstacle to the freedoms of movement.
62. It must be stated that, since it is related to intra-Community trade, such a situation may fall within the scope of the provisions of the Treaty relating to the fundamental freedoms ( Keller Holding , paragraph 24) and that inasmuch as, from a taxation perspective, they put Community situations at a disadvantage compared with purely domestic situations, the provisions of the CGI at issue in the main proceedings thus constituted a restriction which is, in principle, prohibited by the Treaty provisions relating to freedom of establishment (see Case C‑418/07 Papillon  [2008] ECR I‑8947, paragraph 32).
63. According to the Court’s case-law, a restriction on freedom of establishment is permissible only if it is justified by overriding reasons in the public interest (see, inter alia, Case C‑303/07 Aberdeen Property Fininvest Alpha  [2009] ECR I‑5145, paragraph 57). Neither the national court nor the parties which submitted observations have provided evidence to justify that restriction. It must therefore be held that Article 49 TFEU precludes legislation such as that at issue in the main proceedings.
Free movement of capital
66. In so far as income arising from foreign-sourced capital was treated less favourably from a tax point of view than dividends paid by companies established in France, shares in companies established in other Member States were less attractive to parent companies established in France than those of companies having their seat in that Member State (see Case C‑35/98 Verkooijen  [2000] ECR I‑4071, paragraph 35; Manninen , paragraphs 22 and 23; and Test Claimants in the FII Group Litigation , paragraph 64).
71. It should be noted in that regard that the right to a refund of charges levied in 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 (see, inter alia, Case 199/82 San Giorgio  [1983] ECR 3595, paragraph 12, and Joined Cases C‑397/98 and C‑410/98 Metallgesellschaft and Others  [2001] ECR I‑1727, paragraph 84). The Member State is therefore required in principle to repay charges levied in breach of EU law (Joined Cases C-192/95 to C-218/95 Comateb and Others [1997] ECR I-165, paragraph 20; Metallgesellschaft and Others , paragraph 84; Case C‑147/01 Weber’s Wine World and Others [2003] ECR I‑11365, paragraph 93; and Test Claimants in the FII Group Litigation , paragraph 202).
72. However, according to established case-law, EU law does not prevent a national legal system from disallowing repayment of charges which have been levied but were not due where to do so would lead to unjust enrichment of the recipients (Case 104/86 Commission v Italy [1988] ECR 1799, paragraph 6; Case C-343/96 Dilexport [1999] ECR I‑579, paragraph 47; Joined Cases C-441/98 and C-442/98 Michaïlidis  [2000] ECR I-7145, paragraph 31; and Case C‑309/06 Marks & Spencer [2008] ECR I‑2283, paragraph 41). The protection of the rights so guaranteed by the EU legal order does not therefore require repayment of taxes, charges and duties levied in breach of EU 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, and Case C‑398/09 Lady & Kid and Others [2011] ECR I‑0000, paragraph 18).
73. However, it is settled law that, since the disallowing of repayment in such circumstances entails placing a limitation on a subjective right derived from the EU legal order, that restriction must be narrowly construed ( Weber’s Wine World and Others , paragraph 95, and Lady & Kid and Others , paragraph 20).
74. Thus, it is apparent from paragraphs 20 and 25 of Lady & Kid and Others that the only exception to the right to repayment of taxes levied in breach of EU law is in a case in which a charge that was not due has been directly passed on by the taxable person to the purchaser.
78. In that regard, according to settled case-law, under the principle of sincere cooperation laid down in Article 4 TEU, it is for the Member States to ensure judicial protection of an individual’s rights under EU law (see, to that effect, Case 33/76 Rewe-Zentralfinanz and Rewe-Zentral  [1976] ECR 1989, paragraph 5; Case 45/76 Comet [1976] ECR 2043, paragraph 12; Case C-213/89 Factortame and Others  [1990] ECR I-2433, paragraph 19; and Case C‑432/05 Unibet [2007] ECR I‑2271, paragraph 38).
79. Therefore, in the absence of EU rules on this matter it is for the domestic legal system of each Member State to designate the courts and tribunals having jurisdiction and to lay down the detailed procedural rules governing actions for safeguarding rights which individuals derive from EU law, provided, first, that such rules are not less favourable than those governing similar domestic actions (principle of equivalence) and, secondly, that they do not render virtually impossible or excessively difficult the exercise of rights conferred by EU law (principle of effectiveness) ( Test Claimants in the FII Group Litigation , paragraph 203 and the case-law cited).
82. It should be noted that the tax authorities of a Member State are entitled to require the taxpayer to provide such proof as they may consider necessary in order to determine whether the conditions of a tax advantage provided for in the legislation at issue have been met and, consequently, whether to allow that advantage (see, to that effect, Case C‑136/00 Danner  [2002] ECR I‑8147, paragraph 50; Case C‑422/01 Skandia and Ramstedt  [2003] ECR I‑6817, paragraph 43; Case C‑318/07 Persche [2009] ECR I‑359, paragraph 54; Haribo Lakritzen Hans Riegel and Österreichische Salinen , paragraph 95; and Case C-262/09 Meilicke and Others [2011] ECR I‑0000, paragraph 45).
87. However, whilst it follows from the case-law that EU law requires a Member State which has a system for the avoidance of double economic taxation as regards dividends paid to residents by resident companies to treat dividends paid to residents by resident companies in the same way as dividends paid to residents by non-resident companies (see Test Claimants in the FII Group Litigation , paragraph 72), that law does not require Member States to give taxpayers that have invested in foreign companies an advantage compared with those having invested in domestic companies (see, to that effect, Case C‑298/05 Columbus Container Services  [2007] ECR I‑10451, paragraphs 39 and 40, and Haribo Lakritzen Hans Riegel and Österreichische Salinen , paragraph 89).
88. Thus, it has been held that EU law does not prohibit a Member State from preventing the imposition of a series of charges to tax on dividends received by a resident company by applying rules which exempt those dividends from tax when they are paid by a resident company, while preventing those dividends from being liable to a series of charges to tax through an imputation method when they are paid by a non-resident company, provided, however, that the tax rate applied to foreign-sourced dividends is not higher than the rate applied to nationally-sourced dividends and that the tax credit is at least equal to the amount paid in the State of the company making the distribution, up to the limit of the tax charged in the Member State of the company receiving the dividends (see Test Claimants in the FII Group Litigation , paragraphs 48 and 57; Haribo Lakritzen Hans Riegel and Österreichische Salinen , paragraph 86; and order of 23 April 2008 in Case C‑201/05 Test Claimants in the CFC and Dividend Group Litigation [2008] ECR I‑2875, paragraph 39).
89. The Court has held that when the profits underlying foreign-sourced dividends are subject in the State of the company making the distribution to a lower level of tax than the tax levied in the Member State of the recipient company, that Member State must grant an overall tax credit corresponding to the tax paid by the company making the distribution in the State in which it is established ( Test Claimants in the FII Group Litigation , paragraph 51, and Haribo Lakritzen Hans Riegel and Österreichische Salinen , paragraph 87).
90. Where, conversely, those profits are subject in the State of the company making the distribution to a higher level of tax than the tax levied by the Member State of the company receiving them, that Member State is obliged to grant a tax credit only up to the limit of the amount of corporation tax for which the company receiving the dividends is liable. It is not required to repay the difference, that is to say, the amount paid in the State of the company making the distribution which is greater than the amount of tax payable in the Member State of the company receiving it (see Test Claimants in the FII Group Litigation , paragraph 52, and Haribo Lakritzen Hans Riegel and Österreichische Salinen , paragraph 88).
92. Consequently, a Member State must be in a position to determine the amount of the corporation tax paid in the State in which the distributing company is established that must be the subject of the tax credit granted to the recipient parent company. Therefore, contrary to what Accor maintains, it is not sufficient to provide evidence that the distributing company has been taxed, in the Member State in which it is established, on the profits underlying the dividends distributed, without providing information relating to the nature and rate of the tax actually charged on those profits.
96. Whilst the parent company receiving dividends does not itself have all the information relating to the corporation tax that has been charged on the dividends distributed by its subsidiary established in another Member State, such information is known, in principle, to the latter company. Accordingly, any difficulty that the parent company may have in providing the information required in respect of the tax paid by its subsidiary distributing dividends is due not to the inherent complexity of the information but to a possible lack of cooperation on the part of the subsidiary that has the information. Therefore, the inadequate flow of information to the parent company is not a problem for which the Member State concerned should have to answer (see, to that effect, Haribo Lakritzen Hans Riegel and Österreichische Salinen , paragraph 98).
97. Moreover, contrary to what Accor maintains, the fact that the tax authorities can have recourse to the mechanism of mutual assistance under Council Directive 77/799/EEC of 19 December 1977 concerning mutual assistance by the competent authorities of the Member States in the field of direct and indirect taxation (OJ L 336, p. 15), as amended by Council Directive 92/12/EEC of 25 February 1992 (OJ L 76, p. 1), (‘Directive 77/799’), does not mean that they are required to absolve the parent company receiving dividends from proving to those authorities the tax paid by the distributing company in another Member State (see Haribo Lakritzen Hans Riegel and Österreichische Salinen , paragraph 100, and Meilicke and Others , paragraph 50).
98. Since Directive 77/799 provides the option for national tax authorities to request information which they cannot obtain themselves, the Court has stated that the use, in Article 2(1) of Directive 77/799, of the word ‘may’ indicates that, whilst those authorities have the possibility of requesting information from the competent authority of another Member State, such a request does not in any way constitute an obligation. It is for each Member State to assess the specific cases in which information concerning transactions by taxable persons established in its territory is lacking and to decide whether those cases justify submitting a request for information to another Member State (Case C‑184/05 Twoh International [2007] ECR I‑7897, paragraph 32; Persche , paragraph 65; Haribo Lakritzen Hans Riegel and Österreichische Salinen , paragraph 101; and Meilicke and Others , paragraph 51).
99. As regards compliance with the principle of effectiveness, it should be noted, first, that the evidence required should enable the tax authorities of the Member State of taxation to ascertain, clearly and precisely, whether the conditions for obtaining a tax advantage are met, but it does not need to take any particular form and the assessment must not be conducted too formalistically (see, to that effect, Meilicke and Others , paragraph 46).
100. Secondly, it is for the national court to determine whether the evidence concerning the rate of taxation actually applied and the amount of tax actually paid on the profits underlying the distribution of the dividends will not prove virtually impossible or excessively difficult to obtain, in particular in the light of the legislation of the Member State in which the distributing company is established concerning the avoidance of double taxation, the registration of corporation tax to be paid, and the retention of administrative documents or accounts.
101. The request for production of that information should moreover be made within the statutory period for retention of administrative documents or accounts, as laid down by the law of the Member State in which the subsidiary is established. As Accor observes, in order for it to receive the tax credit it should not be required to provide documents covering a period significantly longer than the statutory period for retention of administrative documents and accounts.