C-23/68

THE COURT

composed of: R. Lecourt, President, A. Trabucchi and J. Mertens de Wilmars, Presidents of Chambers, A. M. Dormer, W. Strauß, R. Monaco and P. Pescatore (Rapporteur), Judges,

Advocate-General: J. Gand Registrar: A. Van Houtte

gives the following

JUDGMENT

Issues of fact and of law

ion to the Gerechtshof, The Hague; Article 11(b) of the Protocol? before the Second Chamber (Fiscal The Gerechtshof's decision to refer the Chamber) of that court he submitted question was received at the Court that the said Inspectorate had insuffici­ Registry on 26 September 1968. ently stated the reasons for the disputed Written observations were submitted to decision and, in particular, that it had the Court by the Government of the not dealt with the objection based on Kingdom of the Netherlands and by Article 11(b) of the Protocol on the the Commission of the European Com­ Privileges and Immunities of the ECSC. munities. The plaintiff relied in this connexion on The plaintiff in the main action, J. G. the judgment of the Court of Justice in Klomp, the Government of the King­ Case 6/60 (Humblet v Belgian State, dom of the Netherlands and the Com­ Rec. 1960, p. 1125). The Inspectorate mission of the European Communities of Taxes, on the other hand, main­ presented oral argument at the hearing tained that: on 15 January 1969. On that occasion — since Mr Klomp is a 'resident with­ the plaintiff in the main action and the in the meaning the of Article 2 of said Government also answered ques­ General Law on Old Age, by virtue tions from certain judges. of Article 6 he is automatically The Advocate-General delivered his subject to that Law and liable to the opinion at the hearing on 29 January contribution; 1969. — Article 11 (b) of the Protocol on the Privileges and Immunities of the ECSC is not applicable in the pres­ II — Observations submit­ ent case, since a contribution to a ted to the Court general compulsory insurance em­ bracing the whole population cannot The written and oral observations sub­ be regarded as a tax; mitted to the Court may be summarized — that the Gerechtshof, The Hague, as follows: does not have jurisdiction with re­ gard to the question whether the as­ A — The jurisdiction of the Court sessment relating to the contribution is compatible with the Protocol, since 1. The Government of the Kingdom of Article 16 thereof provides that all the Netherlands questions whether the disputes on the interpretation or ap­ Court has jurisdiction to entertain the plication of the Protocol shall come question asked. within the jurisdiction of the Court In fact, Article 41 of the ECSC Treaty of Justice. only confers on it jurisdiction to give By letter dated 24 September 1968 the preliminary rulings on the validity of Gerechtshof, The Hague, requested the acts of the High Authority and of the Court of Justice to give a preliminary Council and the provisions of the ECSC ruling on the interpretation of Article Treaty relating to the jurisdiction of the 11(b) of the Protocol on the Privileges Court have not been amended by Article and Immunities of the ECSC and in 30 of the Treaty of 8 April 1965 estab­ particular to answer the following ques­ lishing a Single Council and a Single tion: Commission of the European Commun­ 'Must a contribution levied under the ities. (Netherlands) General Law on Old Age It may appear possible to base the juris­ be considered to be included in the diction of the Court on Article 16 of expression 'all taxes on salaries and the former Protocol on the Privileges emoluments paid by. the Community' in and Immunities of the ECSC.

to the substantive provisions of the Pro The fact that the payment gives rise to a tocol on the Privileges and Immunities of corresponding benefit is not peculiar to the ECSC, although it has been repealed, the disputed contribution; there is also with effect from 1 July 1967, by the a more or less directly corresponding Treaty of 8 April 1965 establishing a benefit for every tax. Single Council and a Single Commis The system of allocation of charges, on sion of the European Communities. which the general old-age insurance is On the other hand, with regard to the based, means that there is no direct con jurisdiction of the Court, the repeal of nexion between the contribution and the the former ECSC Protocol means that, corresponding benefit: the old-age pen by virtue of the provisions of the new sion is only granted on request; there is Protocol and of the principles common no relationship between the amount of to the legal systems of Member States, the contribution and that of the pension Article 16 of the former ECSC Protocol and in certain cases a pension is paid can no longer be employed after 1 July without any contribution.

In these circumstances the and application of the former ECSC contribution to the general old-age in Protocol may have the effect of with surance is indisputably in the nature of drawing such disputes from the juris a tax; under Article 11 (b) of the Pro diction of the Court, thus breaking the tocol on the Privileges and Immunities continuity in the formation of its juris of the ECSC, the salary paid by the diction. The rules of the EEC and EAEC Community may not be taken into Treaties on jurisdiction and procedure consideration in fixing this contribu should therefore be considered applic

established by the judgment of the Court 1. Mr Klomp, the plaintiff in the main of Justice in Case 32/67 (Van Leeuwen, action, considers that the arguments re Rec. 1968, p. 63).

The contribution paid under general nature of the social security contribu old-age insurance does not fall to the tions, which leads to the frequent use Treasury but goes to a special fund of the term 'quasi-taxation'. Nor does managed by an agency specially set up national case-law treat social security for this purpose and does not come contributions as equivalent to the levy under the budget of the State. The ing of a tax. general old-age insurance is financed Moreover certain treaties and inter by an allocation of charges, which in national agreements on the privileges principle implies self-finance. and immunities of international organiza The only analogies, purely technical or tions distinguish between exemption practical, with a tax are the fact that from national taxes and the non- the contribution is to a certain extent applicability of national social security calculated proportionally on the contri

the Communities. It follows that, if tion of the legislature, to a system set those Protocols contain an element up as a public service; the fiscal nature which may be invoked against the of the contributions levied by the request for a national social security authority, even in the form of a charge contribution from an official of the for a special purpose; the method of Communities, that element is to be collecting the contributions which, like found in the provision on the social a tax, are directly enforceable without security system of officials of the Com judicial proceedings. munities and not the provision provid The development of social security in ing for the exemption of their salaries. the direction of a tax has however yet It would be difficult to give a different to receive express recognition in the interpretation to the similar provision on national laws of the Member States and immunity in the former ECSC legal opinion remains divided as to the Protocol.

C — Affiliation to the general old-age 2. The Government of the Kingdom insurance scheme of the Netherlands observes that the action brought by the plaintiff would 1. Mr Klomp, the plaintiff in the main take on a completely different aspect action, in no way disputes his compul if it were based on the ground that the sory participation in the general old-age person concerned was not compulsorily insurance. insured pursuant to the General Law on The line of argument which he expound Old Age.

exclusive social security system, it bution to the general old-age follows that the Netherlands laws on insurance; social security are not applicable to the — the contributions of public officials plaintiff in the main action and that he are paid entirely by the State; was not insured under the General Law — since comparable provisions were on Old Age. hot made for the Netherlands At all events the plaintiff in the mam officials of the Communities, the action cannot claim both the benefit of compulsory payment of a contribu the general old-age insurance and tion to the general old-age insurance exemption from the charges which this calls in question the competence of involves. the Communities to fix the net The only persons exempted from pay remuneration of the members of their ment of the contributions are those with staff and discriminations on the basis insufficient income; the State pays the of nationality. contributions of its officials because In these circumstances, the plaintiff in obtaining a pension under the general the main action refuses to submit to an old-age insurance involves a reduction unreasonable tax.

KLOMP v INSPEKTIE DER BELASTINGEN

It considers that the Communities can­ and require the same type of contribu­ not be denied the right to issue staff tions is a principle generally recognized regulations comprising a social security in international law. system and that affiliation to that system Moreover, this principle is recognized excludes compulsory affiliation to a in the Netherlands: Article 6(3)(b) of national scheme. the General Law on Old Age lays down The fact that a provision like Article 14 that the provisions of this Law, and of the former Protocols of the EEC and consequently levying the contribution, of the EAEC does not appear in the may be waived with regard to persons 'to former ECSC Protocol is not con­ whom a corresponding system ... of an clusive; the non-applicability of the organization in international law applies'; national provisions of social security to a ministerial order of 17 January 1967 the officials of international organiza­ with retroactive effect from 1 January tions in fields where their staff regula­ 1965 used this power in connexion with tions provide them with similar benefits the officials of the three Communities.

Grounds of judgment

1-2 The Gerechtshof, The Hague, by letter dated 24 September 1968, received at the Registry on 26 September, has requested the Court to give a preliminary ruling on the interpretation of Article 11(b) of the Protocol on the Privileges and Immunities of the European Coal and Steel Community. The question is whether the words 'all taxes on salaries and emoluments paid by the Com­ munity' (Article 11(b) of the Protocol) include the contribution charged on the basis of income under the Netherlands General Law on Old Age.

ties of the ECSC was replaced by the Protocol on the Privileges and Immuni­ ties of the European Communities. Article 13(2) of that Protocol in substance re-enacts the provisions of Article 11(b) of the Protocol on the Privileges and Immunities of the ECSC, whereas the new Protocol did not re-enact Article 16 of the Protocol on the Privileges and Immunities of the ECSC. On the other hand, Article 30 of the Treaty of 8 April 1965 provided for the exten­ sion to the said Treaty and to the Protocol annexed thereto of the provisions of the Treaties establishing the European Economic Community and the European Atomic Energy Community concerning the jurisdiction of the Court of Justice and the exercise of that jurisdiction. Hence, at the time when the Gerechtshof, The Hague, asked the Court of Justice for a perliminary ruling, the provisions of Article 177 of the Treaty establishing the EEC and of Article 150 of the Treaty establishing the EAEC were extended to the pro­ vision now governing the question which forms the subject-matter of the case pending before the national court.

12-14 The procedure provided for by Article 16 of the Protocol on the Privileges and Immunities of the ECSC, which was applicable at the time when the dis­ pute arose, and the provisions on preliminary rulings for interpretation of the Treaties establishing the EEC and the EAEC have an identical objective namely to ensure a uniform interpretation and application of the provisions of the Protocol in the six Member States. In accordance with a principle common to the legal systems of the Member States, the origins of which may be traced back to Roman law, when legislation is amended, unless the legisla­ ture expresses a contrary intention, continuity of the legal system must be ensured. Accordingly the Court has jurisdiction to give a ruling on the request for interpretation.

18-22 Article 11(b) of the Protocol on the Privileges and Immunities refers to national taxes on salaries and emoluments in whatever form and under what­ ever name they may be levied. It is however a matter for consideration in connexion with the exemption claimed whether the said salaries and emolu­ ments are indeed subject to a tax within the meaning of this provision. For this purpose it is proper to distinguish between a tax intended to provide for the general expenses of public authorities and a contribution intended to finance a social security scheme, even if such a contribution is levied in a manner resembling the levying of taxes. Accordingly when such a contribu­ tion is assessed on the basis of the income of the person concerned there is no objection to salaries and emoluments paid by the Community being taken into account in determining the basis of assessment. However, this finding leaves open the question, which has not been submitted to the Court, whether an exemption from the disputed contribution might not result from either Community or national provisions intended to avoid compulsory affiliation of officials of the European Communities to a national scheme of social security, in so far as they are already automatically subject to a corresponding scheme established by the Communities.

Costs

23-24 The cost incurred by the Government of the Kingdom of the Netherlands and the Commission of the European Communities which have submitted observations to the Court are not recoverable and as these proceedings are, in so far as the parties are concerned, a step in the action pending before the Gerechtshof, The Hague, the decision on costs is a matter for that court.

in answer to the question referred to it by the Second Chamber of the Gerechtshof, The Hague (Fiscal Chamber), hereby rules:

A contribution intended to finance a social security scheme does not constitute a tax within the meaning of Article 11(b) of the Protocol on the Privileges and Immunities of the European Coal and Steel Com­ munity even if such a contribution is levied in a manner resembling the levying of taxes.

Lecourt Trabucchi Mertens de Wilmars

Donner Strauß Monaco Pescatore

Delivered in open court in Luxembourg on 25 February 1969. A. Van Houtte R. Lecourt Registrar President

OPINION OF MR ADVOCATE-GENERAL GAND