IGI - Investimentos Imobiliários SA v Fazenda Pública.
Date: 2000-09-26
16 The questions submitted by the national court in the present case are to a large extent identical to those asked by the same court in Case C-56/98 Modelo v Director-Geral dos Registos e Notariado [1999] ECR I-6427 (hereinafter Modelo I) and Case C-19/99 Modelo Continente v Fazenda Pública [2000] ECR I-7213, which relate to the levying of charges for drawing up a notarially attested act recording an increase in the share capital of a capital company.
18 Under the national legislation, legal persons are required to enter changes to their share capital in the National Register of Legal Persons and to pay charges when they are entered. The revenue from the charges is paid to the Fund, which bears the operating costs of the National Register of Legal Persons, pays the fixed portion of the salaries of notaries and other civil servants and, subject to authorisation from the Ministry of Justice, meets other expenditure in the field of legal administration (see Modelo I, paragraph 20).
19 Thus, the charges at issue in the main proceedings, payable pursuant to a rule of law laid down by the State, are paid by a private person to the State for the financing of its official business (see Modelo I, paragraph 21).
20 In the light of the objectives pursued by the Directive, in particular the abolition of indirect taxes having the same characteristics as capital duty, registration charges levied by the State for a transaction covered by the Directive and paid to it in order to subsidise public expenditure must be regarded as a tax for the purposes of the Directive (see Modelo I, paragraph 22).
22 Article 10(c) of the Directive prohibits, in addition to capital duty, taxes in respect of registration or any other formality required before the commencement of business, to which a company may be subject by reason of its legal form. That prohibition is justified by the fact that even though the taxes in question are not levied on capital contributions as such, they are nevertheless levied on account of formalities connected with the company's legal form, that is to say, on account of the instrument employed for raising capital, so that their continued existence would similarly risk frustrating the aims of the Directive (Case C-2/94 Denkavit Internationaal and Others [1996] ECR I-2827, paragraph 23, and Modelo I, paragraph 24).
23 The prohibition covers not only charges paid for the registration of new companies, but also duties payable by companies for the registration of increases in capital since these, too, are levied on account of an essential formality connected with the legal form of the companies in question. While registration of an increase in capital is not, strictly speaking, a formality required before the commencement of business by a capital company, it is none the less necessary for the carrying on of that business (Case C-188/95 Fantask and Others v Industriministeriet [1997] ECR I-6783, paragraph 22, and Modelo I, paragraph 25).
24 Since it is compulsory under Portuguese law to enter increases in the share capital of a capital company in the national register of legal persons, it follows that such registration constitutes an essential formality connected with the legal form of the company and that it is necessary if the company is to carry on business.
25 The answer should therefore be that charges payable for entering an increase in the share capital of a capital company in a national register of legal persons are, where they amount to a tax for the purposes of the Directive, in principle prohibited under Article 10(c) thereof.
The derogation provided for in Article 12(1)(e) of the Directive
26 The distinction drawn between taxes prohibited by Article 10 of the Directive and duties paid by way of fees or dues implies that the latter comprise only remuneration the amount of which is calculated on the basis of the cost of the service rendered. Where the amount payable is wholly unrelated to the cost of the service in question or is calculated, not by reference to the costs of the transaction for which it constitutes the consideration, but to all the operational and capital costs incurred by the department responsible for that transaction, it would have to be regarded as a tax falling exclusively within the prohibition laid down in Article 10 of the Directive (Joined Cases C-71/91 and C-178/91 Ponente Carni and Cispadana Costruzioni [1993] ECR I-1915, paragraphs 41 and 42, and Modelo I, paragraph 29).
27 It may be difficult to determine the cost of certain transactions, for example the registration of a company. In such a case the cost can only be assessed on a flat-rate basis and must be determined in a reasonable manner, taking account, in particular, of the number and qualification of the officials, the time they take and the various material costs necessary for carrying out the transaction (Ponente Carni and Cispadana Costruzioni, paragraph 43).
28 In that regard, as the Court held at paragraph 30 of the judgment in Fantask and Others, cited above, when calculating the amount of duties paid by way of fees or dues, the Member States are entitled to take account not only of the material and salary costs which are directly related to the effecting of the registrations in respect of which they are incurred, but also, in the circumstances indicated by the Advocate General at paragraph 43 of his Opinion in the same case, of the proportion of the overheads of the competent authority which can be attributed to those registrations.
29 The Court has also held that a Member State may impose charges for major transactions only and pass on in those charges the costs of minor services performed without charge (Fantask and Others, paragraph 28).
30 The amount of duties paid by way of fees or dues does not necessarily have to vary in accordance with the costs actually incurred by the authority in effecting each registration and a Member State is entitled to prescribe in advance, on the basis of the projected average registration costs, standard charges for carrying out registration formalities in relation to capital companies. Furthermore, there is nothing to prevent those charges from being set for an indefinite period, provided that the Member State checks at regular intervals, for example once a year, that they continue not to exceed the registration costs (Fantask and Others, paragraph 32).
31 However, charges with no upper limit which increase directly in proportion to the nominal value of the capital raised cannot, by their very nature, amount to duties paid by way of fees or dues within the meaning of the Directive. Even if there may be a link in some cases between the complexity of a registration and the amount of capital raised, the amount of such charges will generally bear no relation to the costs actually incurred by the authority on the registration formalities (Fantask and Others, paragraph 31).
34 It is settled case-law that entitlement to the recovery of sums levied by a Member State in breach of Community law is a consequence of, and an adjunct to, the rights conferred on individuals by the Community provisions as interpreted by the Court. The Member State is therefore in principle required to repay charges levied in breach of Community law. In the absence of Community rules governing the matter, it is for the domestic legal system of the Member State to lay down the detailed procedural rules for actions seeking the recovery of sums wrongly paid, provided that those rules are not less favourable than those governing similar domestic actions and do not render virtually impossible or excessively difficult the exercise of rights conferred by Community law (Fantask and Others, cited above, paragraphs 38 and 47).
36 The Court has consistently held that wherever the provisions of a directive appear, so far as their subject-matter is concerned, to be unconditional and sufficiently precise, they may be relied upon by an individual against the State in proceedings before the national courts where the State has failed to transpose the directive into national law by the end of the period prescribed or has failed to do so correctly (see, inter alia, Case C-236/92 Comitato di Coordinamento per la Difesa della Cava and Others [1994] ECR I-483, paragraph 8, Case C-347/96 Solred v Administración General del Estado [1998] ECR I-937, paragraph 28, and Modelo I, paragraph 33).
37 On this point, it need only be noted that the prohibition laid down in Article 10 of the Directive is expressed in sufficiently precise and unconditional terms to be relied upon by individuals in the national courts in order to contest a provision of national law which is contrary to the Directive (Solred, paragraph 29, and Modelo I, paragraph 34).