Commission of the European Communities v Kingdom of Belgium.
Date: 2006-11-09
28. As a preliminary point, it must be recalled that the Court has consistently held that Article 49 EC requires not only the elimination of all discrimination on grounds of nationality against service providers who are established in another Member State, but also the abolition of any restriction on the freedom to provide services, even if it applies without distinction to national providers of services and to those of other Member States, which is liable to prohibit, impede or render less advantageous the activities of service providers from other Member States who lawfully provide similar services in their Member State of origin (see, to that effect, Case C‑76/90 Säger [1991] ECR I‑4221, paragraph 12; Case C‑279/00 Commission v Italy  [2002] ECR I‑1425, paragraph 31; Case C‑131/01 Commission v Italy [2003] ECR I‑1659, paragraph 26; Case C‑244/04 Commission  v Germany [2006] ECR I‑885, paragraph 30; and Case C‑255/04 Commission v France  [2006] ECR I‑0000, paragraph 37).
29. As the Advocate General has noted at point 25 of his Opinion, measures which are capable of deterring an operator from exercising his freedom to provide services are covered by the prohibition thus laid down in the EC Treaty (see, to that effect, Case C‑17/00 De Coster [2001] ECR I‑9445, paragraph 33; Case C‑289/02 AMOK [2003] ECR I‑15059, paragraph 36; and Case C‑8/02 Leichtle [2004] ECR I‑2641, paragraph 32).
30. In the present case, the fact that, under Article 403 of the ICT 1992, the principal or contractor must withhold for the Belgian authorities a sum equivalent to 15% of the price charged by an unregistered service provider effectively deprives that provider of the ability immediately to have at his disposal a part of his income, which he can recover only at the conclusion of a specific administrative procedure. The disadvantages that the withholding obligation represents for service providers who are not registered and not established in Belgium are, consequently, liable to deter them from accessing the Belgian market in order to provide services in the construction sector in that country.
31. By the same token, the fact that, under Article 402 of the ICT 1992, the principal or the contractor who contracts with a service provider not registered in Belgium is made jointly liable for all of that provider’s tax debts relating to earlier taxable periods at the rate of 35% of the price of the work to be carried out is liable to deter that principal or contractor from having recourse to the services of a provider who is not registered and not established in Belgium, yet who lawfully provides identical services in his Member State of establishment. Even if joint liability applies without distinction when an unregistered service provider is used, regardless of whether he is established in Belgium or in another Member State, it must nevertheless be stated that, while it does not deprive service providers who are not registered and not established in Belgium of the ability to supply their services there, the disputed provision does make access to the Belgian market difficult for them.
32. Consequently, the withholding obligation and joint liability constitute a restriction on the freedom to provide services.
33. However, according to settled case-law of the Court, where national legislation falling within an area which has not been harmonised at Community level is applicable without distinction to all persons and undertakings operating in the territory of the Member State concerned, it may, notwithstanding its restrictive effect on the freedom to provide services, be justified where it meets overriding requirements relating to the public interest in so far as that interest is not already safeguarded by the rules to which the service provider is subject in the Member State in which he is established and in so far as it is appropriate for securing the attainment of the objective which it pursues and does not go beyond what is necessary in order to attain it (see Säger , paragraph 15; Joined Cases C-369/96 and C-376/96 Arblade and Others  [1999] ECR I-8453, paragraphs 34 and 35; Case C‑164/99 Portugaia Construções [2002] ECR I‑787, paragraph 19; Case C‑279/00 Commission v Italy , paragraph 33; Case C‑445/03 Commission  v Luxembourg  [2004] ECR I‑10191, paragraph 21; and Commission v Germany , paragraph 31).
35. In that regard, although the Court has repeatedly held that the prevention of tax avoidance and the need for effective fiscal supervision may be relied upon to justify restrictions on the exercise of fundamental freedoms guaranteed by the Treaty (see Case C-254/97 Baxter and Others  [1999] ECR I‑4809, paragraph 18; Case C‑478/98 Commission v Belgium [2000] ECR I‑7587, paragraph 39; and Case C‑334/02 Commission v France  [2004] ECR I‑2229, paragraph 27), it has also held that a general presumption of tax avoidance or fraud is not sufficient to justify a fiscal measure which compromises the objectives of the Treaty (see, to that effect, Commission v Belgium , paragraph 45, and Case C‑334/02 Commission v France , paragraph 27).
38. As they apply in an automatic and unconditional manner, the disputed measures do not allow any account to be taken of the individual circumstances of service providers who are not established and not registered in Belgium.