Danfoss A/S and Sauer-Danfoss ApS v Skatteministeriet.
Date: 2011-10-20
20. In order to answer that question, it should first be borne in mind that the right to a refund of charges levied in a Member State in breach of the rules of EU law is the consequence and complement of the rights conferred on individuals by the provisions of EU law prohibiting such charges. The Member State is therefore required in principle to repay charges levied in breach of EU law (see Case 199/82 San Giorgio  [1983] ECR 3595, paragraph 12; Case C‑264/08 Direct Parcel Distribution Belgium  [2010] ECR I‑731, paragraph 45; and Case C‑398/09 Lady & Kid and Others , [2011] ECR I‑0000, paragraph 17).
21. However, by way of exception to the principle of the reimbursement of charges incompatible with EU law, the repayment of duties wrongly levied can be refused only where repayment would entail unjust enrichment of the persons concerned, that is to say, where it is established that the person required to pay such charges has actually passed them on to the purchaser directly (see, to that effect, Lady & Kid and Others , paragraphs 18 and 20).
22. In such circumstances, the burden of the charge levied but not due has been borne not by the taxable person, but by the purchaser to whom the cost has been passed on. Accordingly, to repay the taxable person the amount of the charge already collected from the purchaser would be tantamount to paying him twice over, which may be described as unjust enrichment, whilst in no way remedying the consequences for the purchaser of the illegality of the charge (Joined Cases C‑192/95 to C‑218/95 Comateb and Others  [1997] ECR I‑165, paragraph 22, and Lady & Kid and Others , paragraph 19).
23. It appears from this that the right to the recovery of sums unduly paid helps to offset the consequences of the duty’s incompatibility with EU law by neutralising the economic burden which that duty has unduly imposed on the operator who, in the final analysis, has actually borne it.
24. That said, it should also be noted that, in accordance with settled case-law, in the absence of EU rules governing claims for the repayment of taxes, it is for the domestic legal system of each Member State to lay down the conditions under which those claims may be made; subject, nevertheless, to observance of the principles of equivalence and effectiveness (see Case C‑291/03 MyTravel  [2005] ECR I‑8477, paragraph 17, and Case C‑35/05 Reemtsma Cigarettenfabriken  [2007] ECR I‑2425, paragraph 37).
25. In that regard, given the purpose of the right to the recovery of sums unduly paid, as recalled in paragraph 23 above, observance of the principle of effectiveness requires that the conditions under which an action may be brought for recovery of sums unduly paid be fixed by the Member States, pursuant to the principle of procedural autonomy, in such a way that the economic burden of the duty unduly paid can be neutralised.
26. From that perspective, it has been held that, if the final consumer is able, on the basis of national law, to obtain reimbursement through the taxable person of the amount of the charge passed on to him, that taxable person must in turn be able to obtain reimbursement from the national authorities (see Comateb and Others , paragraph 24). In the same way, a national legal system which allows the supplier who has paid VAT to the tax authorities in error to seek reimbursement, and which allows the recipient of the services to bring a civil law action against that supplier for recovery of the sums paid but not due observes the principle of effectiveness, as that system enables the recipient who bore the tax invoiced in error to obtain reimbursement of the sums unduly paid (see Reemtsma Cigarettenfabriken , paragraph 39).
28. However, if reimbursement by the taxable person were to prove impossible or excessively difficult – in particular, in the case of the insolvency of that person – the principle of effectiveness requires that the purchaser be able to bring his claim for reimbursement against the tax authorities directly and that, to that end, the Member State must provide the necessary instruments and detailed procedural rules (see Reemtsma Cigarettenfabriken , paragraph 41).
32. First of all, it should be borne in mind that it is not for the Court to assign a legal classification to the actions brought by the plaintiffs before the national court claiming reimbursement of a duty unduly paid or claiming compensation for damage suffered (see Joined Cases C‑397/98 and C‑410/98 Metallgesellschaft and Others  [2001] ECR I‑1727, paragraph 81, and Case C‑446/04 Test Claimants in the FII Group Litigation  [2006] ECR I‑11753, paragraph 201), and that an action for damages may coexist with an action for the recovery of sums unduly paid (see, to that effect, Comateb and Others , paragraph 34).
33. It should also be noted that recognition of the right of individuals harmed to compensation for damage suffered as a consequence of a breach of EU law by a Member State is subject to three conditions: the rule of EU law infringed must be intended to confer rights on those individuals; the breach of that rule must be sufficiently serious; and there must be a direct causal link between the breach and the loss or damage sustained by the individuals (see Case C‑118/08 Transportes Urbanos y Servicios Generales  [2010] ECR I‑635, paragraph 30, and Case C‑568/08 Combinatie Spijker Infrabouw-De Jonge Konstruktie and Others , [2010] ECR I‑0000, paragraph 87).
34. Concerning the direct causal link requirement, it appears from settled case-law that it is, in principle, for the national court to ascertain whether the loss and damage claimed flows sufficiently directly from the breach of EU law by the Member State (see Joined Cases C‑46/93 and C‑48/93 Brasserie du pêcheur and Factortame [1996] ECR I‑1029, paragraph 65; Case C‑524/04 Test Claimants in the Thin Cap Group Litigation  [2007] ECR I‑2107, paragraph 122; and Case C‑470/03 AGM-COS.MET [2007] ECR I‑2749, paragraph 83).
35. Nevertheless, the Court of Justice may, in order to give the national court a useful answer, provide it with all the guidance that it deems necessary (see, to that effect, Case C‑150/99 Stockholm Lindöpark [2001] ECR I‑493, paragraph 38, and Case C‑566/07 Stadeco [2009] ECR I‑5295, paragraph 43).