C-438/92
ECLI:EU:C:1994:298
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JUDGMENT OF 14. 7. 1994 — CASE C-438/92
J U D G M E N T O F T H E C O U R T (Second Chamber) 14 July 1994*
In Case C-438/92,
R E F E R E N C E to the Court under Article 177 of the EEC Treaty by the Finan- zgericht (Finance Court) Baden-Württemberg (Germany) for a preliminary ruling in the proceedings pending before that court between
Rustica Semences SA
and
Finanzamt Kehl
on the interpretation of Article 3 of Council Regulation (EEC) N o 855/84 of 31 March 1984 on the calculation and the dismantlement of the monetary com- pensatory amounts applying to certain agricultural products (OJ 1984 L 90, p. 1),
T H E C O U R T (Second Chamber),
composed of: G. E Mancini, President of the Chamber (Rapporteur), F. A. Schockweiler and J. L. Murray, Judges,
* Language of the case: German.
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Advocate General: F. G. Jacobs, Registrar: D. Louterman-Hubeau, Principal Administrator,
after considering the written observations submitted on behalf of:
— Rustica Semences SA, by the accountancy firm of Wollert-Elmendorff Deut- sche Industrie-Treuhand G m b H , represented by Wolfgang Grewe and Ludwig Spägele,
— the Commission of the European Communities, by Ulrich Wölker, of its Legal Service, acting as Agent,
having regard to the Report for the Hearing,
after hearing the oral observations of Rustica Semences SA, represented by Wollert-Elmendorff Deutsche Industrie-Treuhand G m b H , in the person of Peter Löhlein, the Finanzamt Kehl, represented by Wolfgang Klatt, Director, acting as Agent, and the Commission at the hearing on 3 March 1994,
after hearing the Opinion of the Advocate General at the sitting on 14 April 1994,
gives the following
Judgment
1 By order of 9 December 1992, received at the Court on 31 December 1992, the Finanzgericht Baden-Württemberg (Germany) referred for a preliminary ruling
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under Article 177 of the E E C Treaty two questions on the interpretation of Arti- cle 3 of Council Regulation (EEC) N o 855/84 of 31 March 1984 on the calculation and the dismantlement of the monetary compensatory amounts applying to certain agricultural products (OJ 1984 L 90, p. 1).
2 Those questions arose in a dispute between Rustica Semences SA ('Rustica'), a company incorporated under French law with its seat in Blagnac (France), and the tax authorities in Kehl (Germany) ('Finanzamt Kehl') in respect of a tax abate- ment.
3 Rustica carries on in France the business of plant-breeding and seed-growing. It exports its products to, among other places, Germany, where it is liable for value added tax ('VAT'). In its VAT returns for the tax years 1986 and 1987, Rustica claimed entitlement to the tax abatement provided for by Paragraph 24a of the Umsatzsteuergesetz (Law on Turnover Tax) ('UStG'). That paragraph provides for special aid within the meaning of Article 3 of Regulation N o 855/84.
4 The first, second and thirteenth recitals in the preamble to Regulation N o 855/84 are worded as follows:
'... currency instability has necessitated the use in the agricultural sector of special currency conversion rates designed to ensure the stability of the prices of agricul- tural products; ... the application of these representative rates entails differing prices in the various Member States; ... these price differences must, for the pur- poses of trade, be compensated for by the application of monetary compensatory amounts; ... this system has led to difficulties;
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RUSTICA SEMENCES v FINANZAMT
... experience has shown that it is difficult to reintegrate the agricultural sector into the general economy by the alignment of the representative rates on the central rates, particularly for those Member States applying positive monetary compensa- tory amounts, the dismantlement of which must entail lower prices when expressed in national currency;
... adaptation of the representative rates in the Federal Republic of Germany and the Netherlands entails a reduction in prices expressed in national currencies and consequently lower farm incomes; ... by way of compensation, the possibility of granting national aids to the financing of which the Community will contribute on a temporary and degressive basis should be provided for'.
5 Article 3 of Regulation N o 855/84 is worded as follows:
' 1 . Any special aid granted to German agricultural producers under the conditions referred to below shall be deemed to be compatible with the common market.
2. The Federal Republic of Germany shall be authorized to grant separately the special aid by payment mentioned in the invoicing and/or the VAT declaration using the VAT as an instrument.
The aid may not exceed 3 % of the ex-VAT price paid by the purchaser for the agricultural product.'
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JUDGMENT OF 14. 7. 1994 — CASE C-438/92
6 Council Decision 84/361/EEC of 30 June 1984 concerning an aid granted to farm- ers in the Federal Republic of Germany (OJ 1984 L 185, p. 41) raised that ceiling from 3 % to 5% for the period from 1 July 1984 to 31 December 1988.
7 Since it took the form of an abatement of VAT, the special aid provided for by Article 3 of Regulation N o 855/84 made it necessary to amend the common sys- tem of VAT. Article 2 of the Twentieth Council Directive 85/361/EEC of 16 July 1985 on the harmonization of the laws of the Member States relating to turnover taxes — Common system of value added tax: derogations in connection with the special aids granted to certain farmers to compensate for the dismantle- ment of monetary compensatory amounts applying to certain agricultural products (OJ 1985 L 192, p. 18) provides for that reason that VAT may be used as an instru- ment to grant the aid within the limit of the percentages authorized under Article 3 of Regulation N o 855/84 until 31 December 1991.
s Since it took the view that the tax abatement provided for under Paragraph 24(a) of the UStG was reserved to German companies with their seat in Germany, the Finanzamt Kehl rejected Rustica's application for abatement on the ground that it had its seat in France.
9 In the proceedings brought by Rustica against that rejection, the Finanzgericht Baden-Württemberg took the view that the decision in the case depended on the interpretation of Article 3 of Regulation N o 855/84. It accordingly stayed the pro- ceedings and referred the following questions to the Court of Justice for a prelim- inary ruling:
' 1 . Is it compatible with Article 3(1) of Title II of Council Regulation (EEC) N o 855/84 of 31 March 1984 (OJ 1984 L 90, p. 1) for the Federal Republic of Germany to grant special aid to an agricultural producer which does not have its seat in Germany but in another country of the EEC but which imports its products from the country of production into Germany and sells them to German purchasers on the market for agricultural products in Germany?
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2. If Question 1 should be answered in the negative: Does Article 3 of Title II of Regulation N o 855/84 directly exclude the grant of special aid provided for in German turnover tax law, possibly in contravention of Article 3(1), for agricultural producers not having their seat in Germany?
The first question
io In view of the wording of this question, it should be noted that the Court has con- sistently held that it is not competent to rule on the compatibility of a national measure with Community law (see in particular the judgment in Case C-l88/91 Deutsche Shell [1993] ECR 1-363, paragraph 27). However, it is competent to pro- vide the national court with all material relating to the interpretation of Commu- nity law which may enable it to determine the issue of compatibility for the deci- sion in the case before it (see the judgment in Case C-131/91 'K' Line Air Service Europe [1992] ECR 1-4513, paragraph 10).
n The question posed by the national court must therefore be understood as seeking a determination as to whether Article 3 of Regulation N o 855/84 is to be inter- preted as precluding the grant by the Federal Republic of Germany of special aid to an agricultural producer with its seat in another Member State which exports its products to Germany, where they are sold to German customers.
i2 The alteration of the representative conversion rate with a view to reintegrating the agricultural sector into the general economy, pursuant to the second recital in the preamble to Regulation N o 855/84, has resulted in a reduction in the intervention prices and Community aids expressed in DM; according to the thirteenth recital in the preamble to Regulation N o 855/84, the objective of special national aid is pre- cisely to compensate for the fall in farm incomes resulting from that reduction.
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i3 In contrast, the fall in prices in D M linked to the corresponding dismantlement of positive monetary compensatory amounts has no effect on prices in the case of imports into Germany. For that reason, no additional compensation for the reduc- tion in prices expressed in D M is necessary, since compensation is already guaran- teed through changes in the positive monetary compensatory amounts and is made in the form of a reduction in the import levy. Special aid granted to importers would therefore constitute excess compensation and confer on them an unjustified competitive advantage.
H In the light of those considerations, the answer to the first question is that Arti- cle 3 of Regulation N o 855/84 must be understood as precluding the grant by the Federal Republic of Germany of special aid to an agricultural producer with its seat in another Member State which exports its products to Germany, where they are sold to German customers.
The second question
is In this question the national court asks whether, in the light of the answer to the first question, the German authorities can none the less grant directly to agricul- tural producers with their seat in another Member State the special aid provided for under German tax law.
ie The special aid in question in the main proceedings was a measure under the com- mon agricultural policy coming within the exclusive competence of the Commu- nity. It is unacceptable for Member States to adopt national measures at variance with Community rules.
i7 As already stated, the special aid was introduced only in order to compensate for the fall in farm incomes in Member States applying positive monetary compensa-
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tory amounts. It follows that the grant of special aid in any other circumstances is not permissible.
is The answer to the second question must therefore be that Regulation N o 855/84 precludes the grant to agricultural producers which do not have their seat in a Member State applying positive monetary compensatory amounts of any special aid provided for under the tax law of that Member State.
Costs
i9 The costs incurred by the Commission of the European Communities, which has submitted observations to the Court, are not recoverable. Since these proceedings are, for the parties to the main proceedings, a step in the proceedings pending before the national court, the decision on costs is a matter for that court.
O n those grounds,
T H E C O U R T (Second Chamber),
in answer to the questions referred to it by the Finanzgericht Baden-Württemberg, by order of 9 December 1992, hereby rules:
1. Article 3 of Council Regulation (EEC) N o 855/84 of 31 March 1984 on the calculation and the dismantlement of the monetary compensatory amounts applying to certain agricultural products must be understood as precluding
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the grant by the Federal Republic of Germany of special aid to an agricul- t u r a l producer with its seat in another Member State which exports its products to Germany, where they are sold to German customers.
2. Regulation N o 855/84 precludes the grant to agricultural producers which do not have their seat in a Member State applying positive m o n e t a r y com- pensatory amounts of any special aid provided for under the tax law of t h a t Member State.
Mancini Schockweiler Murray
Delivered in open court in Luxembourg on 14 July 1994.
R. Grass G. F. Mancini
Registrar President of the Second Chamber
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