Hervis Sport- és Divatkereskedelmi Kft. v Nemzeti Adó- és Vámhivatal Közép-dunántúli Regionális Adó Főigazgatósága.
Date: 2014-02-05
20. Since the question referred refers both to the provisions of the Treaty relating to the freedom of establishment, the freedom to provide services and the free movement of capital, it is necessary first to determine which freedom is at issue in the main proceedings.
21. In that regard, it is clear from settled case-law that the purpose of the legislation concerned must be taken into consideration (Case C‑35/11 Test Claimants in the FII Group Litigation  [2012] ECR, paragraph 90 and case-law cited).
22. 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 scope of Article 49 TFEU on freedom of establishment (see Test Claimants in the FII Group Litigation , paragraph 91 and the case-law cited).
23. a linked undertaking consists of:
(a) the taxable person and the undertaking in which the taxable person directly or indirectly holds a majority influence, in accordance with the civil code;
(b) the taxable person and the undertaking which directly or indirectly holds a majority influence over the taxable person, in accordance with the civil code;
(c) the taxable person and any other undertaking where a third party directly or indirectly holds a majority influence in the two undertakings, in accordance with the civil code, provided always that close relatives holding a majority influence over the other undertaking shall be considered to be third parties;
(d) the foreign trader and its Hungarian establishment, the establishments of the foreign trader, and the Hungarian establishment of the foreign trader and any undertaking which has with the foreign trader one of the relationships defined above in points (a) to (c);
(e) the taxable person and its foreign establishment, and the foreign establishment of any undertaking which has with the taxable person one of the relationships defined above in points (a) to (c).’
The dispute in the main proceedings and the question referred for a preliminary ruling
12. Hervis operates sports shops in Hungary under the name ‘Hervis Sport’. Its direct competitors are the retail store chains ‘Décathlon’, ‘Intersport’ and ‘SPG Sporcikk’.
13. Hervis is a legal person and is a subsidiary of SPAR Österreichische Warenhandels AG (‘SPAR’). Hervis is part of the SPAR group, in accordance with Paragraph 7 of the law on the special tax, defining ‘linked undertakings’ within the meaning of that law. On that basis, Hervis is liable to pay a share, in proportion to its turnover, of the special tax payable by all the undertakings belonging to that group on the basis of their overall turnover achieved in Hungary.
14. As a result of the application of the steeply progressive scale of the special tax to the overall turnover of that group, Hervis was subject to an average rate of tax considerably higher than that corresponding to the taxable amount consisting solely of the turnover of its own stores. Hervis maintains that the tax payable by the Hungarian retail store chains which are in competition with it is calculated on the basis of that taxable amount, since they are for the most part organised as sales outlets on the franchise model, having legal personality, and do not belong to a group.
15. Hervis concluded that such a system, since it resulted in the higher taxation of legal persons subject to the special tax linked, within the meaning of Law No LXXXI of 1996, to non-resident companies, infringed Articles 18, 49 to 55, 65 and 110 TFEU, and constituted prohibited State aid. After the tax authorities rejected its application to be exempted from the special tax for 2010, Hervis requested the Székesfehérvári Törvényszék (local court, Székesfehérvár), sitting as an administrative court, to hold that the provisions of the law on the special tax are contrary to European Union law.
16. In those circumstances, the Székesfehérvári Törvényszék decided to stay proceedings and to refer the following question to the Court:
‘Is the fact that taxpayers engaged in store retail trade have to pay a special tax if their net annual turnover is higher than HUF 500 million compatible with the provisions of the Treaty governing the general principle of non-discrimination (Articles 18 TFEU and 26 TFEU), the principle of freedom of establishment (Article 49 TFEU), the principle of equal treatment (Article 54 TFEU), the principle of equal treatment as regards financial participation in the capital of companies or firms within the meaning of Article 54 TFEU (Article 55 TFEU), the principle of freedom to provide services (Article 56 TFEU), the principle of the free movement of capital (Articles 63 TFEU and 65 TFEU) and the principle of equality of taxation of companies (Article 110 TFEU)?’
Admissibility of the request for a preliminary ruling
17. The Hungarian Government maintains that the request for a preliminary ruling submitted by the Székesfehérvári Törvényszék lacks precision. It does not set out sufficiently clearly the exact reasons which led the referring court to consider that an interpretation of the provisions of the TFEU referred to in the order for reference was necessary for its decision in the proceedings.
18. However, the information provided in the order for reference bears a clear relation to the subject-matter of the dispute in the main proceedings and makes it possible to ascertain, as is apparent from paragraphs 12 to 15 of this judgment, the scope of the question referred for a preliminary ruling and the context in which it was referred. Moreover, the order for reference, which summarises the arguments of the applicant in the main proceedings regarding the interpretation of European Union law, and which expresses doubts concerning the correctness of that interpretation, states sufficiently clearly the reasons which led the referring court to take the view that an interpretation of European Union law was necessary to enable it to give judgment.
19. Accordingly, the request for a preliminary ruling must be regarded as admissible.
The question referred for a preliminary ruling
Introductory observations
20. Since the question referred refers both to the provisions of the Treaty relating to the freedom of establishment, the freedom to provide services and the free movement of capital, it is necessary first to determine which freedom is at issue in the main proceedings.
21. In that regard, it is clear from settled case-law that the purpose of the legislation concerned must be taken into consideration (Case C‑35/11 Test Claimants in the FII Group Litigation  [2012] ECR, paragraph 90 and case-law cited).
22. 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 scope of Article 49 TFEU on freedom of establishment (see Test Claimants in the FII Group Litigation , paragraph 91 and the case-law cited).
23. The main proceedings concern the allegedly discriminatory rate of taxation imposed, by virtue of the special tax, on ‘taxable persons classified as linked undertakings’ within the meaning of Law No LXXXI of 1996. Paragraph 4 of that law refers, for the purpose of defining that concept, to a company’s holding giving it a direct or indirect majority influence in another company.
25. It should, next, be noted that Article 18 TFEU is intended to apply independently only to situations governed by European Union law for which the Treaty lays down no specific prohibition of discrimination. In the field of freedom of establishment, the principle of the prohibition of discrimination is given specific expression in Article 49 TFEU (Case C‑384/08 Attanasio Group  [2010] ECR I‑2055, paragraph 37 and case-law cited).
30. According to settled case-law, the rules regarding equal treatment forbid not only overt discrimination based on the location of the registered offices of companies, but also all covert forms of discrimination which, by the application of other criteria of differentiation, lead in fact to the same result (see, by analogy, inter alia, Case C‑279/93 Schumacker  [1995] ECR I‑225, paragraph 26; Case C‑383/05 Talotta  [2007] ECR I‑2555, paragraph 17; and Case C‑440/08 Gielen  [2010] ECR I‑2323, paragraph 37).
37. Hervis, the Austrian Government and the Commission contend that Articles 49 TFEU and 54 TFEU preclude such a difference in treatment, which is based de jure  on the apparently objective criterion of differentiation of the level of turnover, but which disadvantages de facto  the subsidiaries of parent companies that have their registered offices in other Member States, in the light of the structure of store retail trade on the Hungarian market, and in particular the fact that retail stores belonging to such companies are generally organised, as is the case of Hervis, in the form of subsidiaries.
38. It must be observed that, in the context of a tax rule, such as that at issue in the main proceedings, which concerns the taxation of turnover, the situation of a person subject to the tax which belongs to a group of companies is similar to that of a person subject to the tax which does not belong to such a group. In particular, both the legal persons active on the store retail market in the Member State concerned which belong to a group of companies and those which do not belong to such a group are subject to the special tax and their turnover is independent of that of other taxable persons.
39. In those circumstances, if it is established that, on the store retail market in the Member State concerned, the taxable persons belonging to a group of companies and covered by the highest band of the special tax are, in the majority of cases, ‘linked’, within the meaning of the national legislation, to companies which have their registered offices in other Member States, the application of the steeply progressive scale of the special tax to a consolidated tax base consisting of turnover is liable to disadvantage, in particular, taxable persons ‘linked’ to companies which have their registered office in another Member State.
40. It is for the referring court to establish whether that condition has been fulfilled in the light of the overall context in which the national legislation has effect.
41. Where that is the case, legislation such as that at issue in the main proceedings, although it does not make a formal distinction according to the registered office of the companies, entails indirect discrimination on the basis of the registered office of the companies for the purposes of Articles 49 TFEU and 54 TFEU (see, to that effect, Gielen , paragraph 48).
42. According to settled case-law, such a restriction is permissible only if it is justified by overriding reasons in the public interest. It is further necessary, in such a case, that it should be appropriate for ensuring the attainment of the objective in question and not go beyond what is necessary to attain that objective (Case C‑371/10 National Grid Indus [2011] ECR I‑12273, paragraph 42 and case-law cited).
44. It is necessary, in any event, to note that it is not possible to validly invoke, in support of such a system, either the protection of the economy of the country (see, to that effect, Case C‑35/98 Verkooijen  [2000] ECR I‑4071, paragraphs 47 and 48), or the restoration of budgetary balance by increasing fiscal receipts (see, to that effect, Case C‑436/00 X and Y  [2002] ECR I‑10829, paragraph 50).