C-312/93

PETERBROECK v BELGIAN STATE

OPINION OF ADVOCATE GENERAL JACOBS delivered on 4 May 1994 *

1. In this case, the Court is asked to rule, on of Peterbroeck. The decision levying the tax a reference from the Court of Appeal of fixed the rate of that tax at 44.9 per cent. On Brussels, on whether Community law 22 July 1976 and on 24 January 1978, Peter- requires a national court to set aside certain broeck lodged complaints with the Regional provisions of national law which have the Director of Direct Contributions ('the direc- effect of precluding the national court from tor') against the levying of that tax. It argued applying Community law. that the income in question should be taxed at the rate applicable to companies resident in Belgium, which at the material time did not exceed 42 per cent. By a decision dated 23 August 1979, the director rejected most of those complaints. Peterbroeck brought pro- ceedings in the national court against that decision, in the course of which the present reference for a preliminary ruling has been made. 2. The question referred has arisen in the context of proceedings between, on the one hand, Peterbroeck, Van Campenhout & Cie ('Peterbroeck'), a société en commandite sim- ple formed under Belgian law, acting on its own behalf and on behalf of Continentale & Britse Trust BV ('CBT'), a company incor- porated under Dutch law, and, on the other hand, the Belgian State.

4. In the main proceedings, Peterbroeck claimed that tax should be levied at the rate applicable to companies resident in Belgium on the basis of two arguments: first, on the basis of Article 25(1) of the Agreement of 19 October 1970 between Belgium and the Netherlands on the Prevention of Double Taxation, which provides that companies res- 3. In the tax year 1975, the Belgian tax ident in the Netherlands cannot be taxed in authorities levied non-resident tax on the Belgium more heavily than Belgian compa- income that CBT earned as 'active partner' nies which are in the same situation; and sec- ondly, on the basis of Article 52 of the Treaty, which provides for the fundamental * Original language: English. freedom of establishment.

7. In what follows I shall first discuss the 1 — According to the observations of the Belgian Government, relevant provisions of the CIR. I shall then the director 'statue en fonctionnaire et n'exerce aucune fonc- tion judiciaire mais sa décision sur la contestation faisant examine the issues arising from the question l'objet de la réclamation est un acte de juridiction qui a referred. l'autorité de la chose jugée'. For the position of the director ¡n Luxembourg see Case C-24/92 Corbiau [1993] ECR I-1277. 2 — Following the coordination of the provisions relating to income tax effected by a Royal Decree of 10 April 1992 (Moniteur belge 30 July 1992), Articles 267 to 276 were renumbered 366 to 375 respectively with effect from the tax year 1992. 3 — CIR, Article 267. 4 — CIR, Article 272. 5 — CIR, Article 273. 6 — See note above. Those articles have now been renumbered 8. Under the CIR, proceedings against the 377 to 385. imposition of tax are divided into two stages, 7 — CIR, Articles 278 to 280.

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9 — Decision of the Cour de Cassation of 10 April 1962 and see also 'Commentaire administratif' du code des impôts sur les 8 — Decision of the Cour de Cassation of 10 December 1990. revenus.

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OPINION OF MR JACOBS — CASE C-312/93

judicata, breach of which can be raised irre- Treaty. It is sufficient to point out here that spective of any time-limit. Article 52 of the Treaty has direct effect 10 and that, according to the case-law of the Court, a Member State may not impose on a company discriminatory tax treatment on the ground that its registered office is located in another Member State. 1 1N o r may it use the criterion of fiscal residence in its terri- tory for the purpose of granting certain tax advantages to companies when that criterion 14. The question referred by the Court of is likely to work in particular to the disad- Appeal is in the following terms: vantage of companies having their registered office in another Member State. 12

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conditions fulfil two requirements: they time-limit provided for by Article 282 of the are not less favourable than the conditions CIR, whereas certain arguments based on relating to similar actions of a domestic national law are not so subject. nature; and they do not render virtually impossible 13 or excessively difficult 14 the exercise of rights conferred by Community law. It is necessary therefore to examine whether the provisions of the CIR fulfil those two requirements. I will examine first the requirement of non-discrimination. 20. There is no doubt that where national law provides for certain exceptions from the procedural rules which apply in national proceedings, those exceptions must benefit not only arguments based on national law but also similar arguments based on Com- munity law. Otherwise the requirement of non-discrimination would be infringed. However, the fact that certain arguments 18. As the Belgian Government and the based on national law benefit from preferen- Commission point out, Article 278 allows tial treatment does not mean that that treat- the taxable person to advance certain new ment should be accorded automatically to all arguments in the Court of Appeal within the arguments based on Community law, irre- time-limit provided for in Article 282, irre- spective of their nature. With those consider- spective of whether those arguments are ations in mind, I turn to examine the specific based on national law or on Community exceptions to the rule that new arguments law; Article 278 is therefore compatible with may not be advanced after the expiry of the the requirement of non-discrimination. 60 day time-limit.

22. In the order for reference, the referring ings must be able to rely and which the court court cites two of the exceptions provided must be able to take into account of its own for by the case-law of the Cour de Cassa- motion at any stage in the proceedings. tion: namely, the claim that the issue in dis- pute is res judicata and the claim that the imposition of the tax in question is time- barred. The third exception which appears to be recognized by the case-law of the Cour de Cassation, i. e. that the taxable person may raise even after the 60 day time-limit arguments which he was unable to raise on 24. That is confirmed by reference to Com- the grounds of force majeure at an earlier munity law. The Court has stated that 'the stage in the proceedings, is not referred to in force of res judicata prevents rights con- the order for reference. For completeness, firmed by a judgment of the Court from however, I shall examine it. being disputed anew' 15 and there can be no doubt that this Court may take into account the existence of res judicata of its own motion at any stage in the proceedings. 16

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26. The exception oi force majeure is differ- San Giorgio 17 and is confirmed by the judg- ent from the exceptions discussed above. It ments in Deville 18 and in Emmott. 19 facilitates the submission of arguments which, irrespective of their nature, the tax- able person was unable to submit within the requisite time-limit because of circumstances beyond his control. It is clear that to be compatible with the principle of non- discrimination, that exception must apply not only to arguments based on national law 29. The Court has held that the exercise of but also to arguments based on Community Community rights is not unduly obstructed law. where reasonable time-limits are fixed for the bringing of an action; the laying down of such time-limits for actions of a fiscal nature is an application of the fundamental principle of legal certainty protecting both the tax- payer and the administration concerned. 20

27. There is no suggestion in the present case that Peterbroeck's claim would fall within one of the exceptions recognized by 30. In the present case, the conclusion that Belgian law if the exception were applied the 60 day time-limit provided by the CIR is without discrimination. N o r in my view, for reasonable is supported by the analogy in the reasons I have given, is Peterbroeck's Community law of Article 173 of the Treaty, claim comparable with any of the exceptions under which the time-limit provided for the recognized by Belgian law. Moreover those submission of an application to this Court or exceptions are in themselves reasonable and the Court of First Instance for the annul- normal exceptions. It follows that the argu- ment of a Community act is two months. ment based on discrimination must fail.

32. In assessing the reasonableness of the time-limit in issue in the Belgian proceed- 35. In the order for reference the national ings, it must also be noted that the period of court also raises the question whether it is 60 days does not start from the day when the compatible with Community law that, once taxable person appeals to the Court of the time-limit prescribed by the CIR has Appeal against the decision of the director expired, the Court of Appeal is prohibited but from the submission by the director of by rules of national law from dealing with that decision together with the case file to the issue of Community law of its own the Court of Appeal. That gives additional motion. Such rules of national law could pre- time to the taxable person to prepare his clude the national courts, not only from submissions. examining the compatibility of national leg- islation with Community law, but also from referring questions of Community law to this Court for a preliminary ruling under Article 177 of the Treaty. The Court of Appeal raises the question whether the restriction imposed on its power to examine of its own motion the compatibility of the contested tax with Article 52 of the Treaty infringes Community law. It refers to the 33. The Belgian Government states that judgments of the Court in Simmenthal 21 and account must also be taken of the adminis- Factortame 22 and asks whether a national trative stage in the proceedings. As we have court, since it has a duty to give full effect to seen, the taxable person has a considerable Article 52, is therefore required to set aside period of time to launch a complaint against the provisions of the CIR which may impede the imposition of tax and until the director the effective protection of the rights arising reaches a decision he can submit new argu- from that article. ments in support of his complaint. It will be remembered that in this case Peterbroeck submitted a complaint to the director on 22 July 1976 and the director reached his 21 — Case 106/77 Amministrazione delle Finanze dello Stato v Simmenthal [1978] ECR 629. decision on 27 August 1979. 22 — Case C-213/89 Factortame and Others [1990] ECR I-2433.

36. It seems to me, however, that the ques- the nature of the proceedings. In civil tion whether the national court can be pre- proceedings, the court must consider of its cluded from raising of its own motion issues own motion certain issues of admissibility, of Community law cannot be divorced from for example a failure to observe the time- the question which I have already discussed. limit within which the action should have Indeed, one may be the corollary of the been brought. But in French public law, as other. As the Belgian Government points well as issues going to the jurisdiction out, the powers of a court are in general of the court and the admissibility of the delimited by the claim with which the court action, certain substantive issues are regarded is seised. Consequently, where a court can- as issues of public policy, for example not raise new issues of its own motion, that the issue of lack of competence of the may be the corollary of the fact that the administrative authority and the issue claimant is precluded from raising new whether the contested act was adopted on issues. Conversely, if the national court were the basis of the legal rules in force at the free, or indeed required, to raise a new issue time. of its own motion at any time, that might have the effect that it could do so at the instance of a party, who might therefore be able to bring it to the attention of the court, irrespective of any time-limit. As I shall explain, however, I do not take the view that a national court must be free to raise an issue of Community law of its own motion irre- spective of any time-limit imposed by national law. 38. The position is not dissimilar in Com- munity law itself. What constitutes an issue which this Court will examine of its own motion, depends, as in national law, on the nature of the proceedings. In proceedings for the review of the legality of Community measures before this Court or the Court of First Instance, for example under Article 173 or Article 179 of the Treaty, it will be for the parties to define the issues and hence to delimit the scope of the action, but the Court will examine of its own motion whether, for 37. It is of course true that, notwithstanding example, the time-limits for bringing the the time-limits which it lays down, national action have been observed. 23 However, in law sometimes recognizes that certain issues actions for compensation brought against the may be raised at any time by the court of its Community under the second paragraph of own motion. The position in Belgian fiscal Article 215 of the Treaty, the Court will not law has been set out above. The position in of its own motion raise the issue of time lim- French law is set out in the observations of itation under Article 43 of the Protocol on the French Government. It appears that in the Statute of the Court of Justice of the EC French law the court may always examine of its own motion issues of public policy (moyens d'ordre public), but the question 23 — See for example Case 33/72 Gunnella v Commission [1973] what constitutes such an issue depends on ECR 475.

where that issue has not been raised by the result in unnecessary incursions into the pro- defendant — that position receiving some cedural autonomy of the legal systems of the support, in cases of non-contractual liability, Member States. if one invokes the 'general principles com- mon to the laws of the Member States' referred to in the second paragraph of Arti- cle 215. 24 In a reference for a preliminary ruling under Article 177 of the Treaty, on the other hand, the proceedings are not conten- tious 25 and the Court will in some circum- stances raise issues going beyond the obser- vations submitted to the Court, in order to give the national court the fullest guidance on the questions of Community law relevant 40. The case-law of the Court in this area to that court's decision. establishes a balance between, on the one hand, the need to respect that autonomy and, on the other hand, the need to ensure the effective protection of Community rights in the national courts. That is true both of the case-law on the subject of time-limits which I have set out above and of the decisions in Simmenthal and Factortame which are men- tioned in the order for reference and are relied on by Peterbroeck, and which illus- trate the Court's concern for the effective 39. Similarly the power or duty of a court to protection of Community rights. raise of its own motion issues which have not been raised by the parties may depend upon the stage which the case has reached. Different considerations may apply depend- ing on whether, for example, an administra- tive decision, as in the present case, is subject to judicial review, or whether an appeal is brought against a decision of a court of first instance, or whether a further appeal is made on a point of law. Given the variety of situ- ations which have to be considered, it would 41. In Simmenthal the Pretore di Susa raised be anomalous, in my view, and would create the question whether the national court was difficulties in practice, if it were held that required itself to set aside certain measures national courts must in all circumstances and of national law which had been found by at any stage in the proceedings be free to this Court to be incompatible with Commu- raise issues of Community law. It might also nity law, without waiting for those measures to be repealed by the Italian legislature or to be declared unconstitutional by the Italian Constitutional Court. In response to that 24 — Case 20/88 Roquette Frères v Commission [1989] ECR 1553; see the Opinion of Advocate General Darmon, para- question, the Court held that 'every national graph 13. court must, in a case within its jurisdiction, 25 — See Case 6/64 Costa v ENEL, order of 3 June 1964 [1964] ECR 614. apply Community law in its entirety and

42. In Factortame, the House of Lords requested a preliminary ruling on the ques- ... the full effectiveness of Community law tion whether a national court is required to would be just as much impaired if a rule of grant interim relief by suspending the appli- national law could prevent a court seised of a cation of a national statute in order to pro- dispute governed by Community law from tect rights claimed under Community law granting interim relief in order to ensure the pending a reference to the Court, where that full effectiveness of the judgment to be given form of interim relief was not available on the existence of the rights claimed under under national law. The Court recalled that it Community law. It follows that a court is for the national courts, in application of which in those circumstances would grant the principle of cooperation laid down in interim relief, if it were not for a rule of Article 5 of the Treaty, to ensure the legal national law, is obliged to set aside that rule.' protection which persons derive from the direct effect of provisions of Community law. 27 Referring to its judgment in Simmen- thal, the Court held: 28

43. The decisions in Simmenthal and Factor- '... any provision of a national legal system tame were necessary to ensure that the court and any legislative, administrative or judicial seised was not precluded from giving effect practice which might impair the effectiveness to the Community rights claimed in the respective national proceedings. The deci- sions demonstrate the way in which Com- munity law can have an impact — indeed a 26 — Paragraph 21 of the judgment. 27 — Paragraph 19 of the judgment. remarkable impact — on national pro- 28 — Paragraphs 20 and 21 of the judgment. cedures. But it will be noted that in both

cases the effect of Community law was to was not, I think, suggesting that it must exclude a national rule which would have always be open to a national court to raise of made the judicial protection of Community its own motion a point of Community law; rights by the court seised wholly impossible. read in the context of the case, the ruling in Those cases show, therefore, that it must Rheinmühlen was concerned with the scope always be possible for an individual to bring of the national court's power to refer to the a claim before a national court and to require Court of Justice a question of Community the national court to protect his Community law which had already been raised, notwith-

44. N o r in my view can that proposition be law may be relevant. 31 But the case-law does supported by reliance on Article 177 of the not suggest that a national court must be Treaty. The Court's case-law on that article able by virtue of Article 177 to raise a ques- establishes that where a question of Commu- tion of Community law of its own motion in nity law is raised before the national court, all circumstances and at any stage in the no rule of national law can preclude the national proceedings. national court from referring the question to this Court. 29 Article 177 does not, I think, address the prior question in what circum- stances a national court may itself raise of its own motion a point of Community law.

ment. See also Case 146/73 Rheinmühlen-Düsseldorf v Einfuhr-und Vorratsstelle Getreide [1974] ECR 139; Joined Cases C-87/90, C-88/90 and C-89/90 Verholen and Others [1991] ECR I-3757, paragraph 15 and Case C-348/89 Meca- 31 — See also Case 126/80 Salonia v Poidomani and Giglio [1981] narte [1991] ECR I-3277, paragraphs 44 and 48. ECR 1563, paragraph 7 of the judgment. 30 — Case 166/73, cited in note, paragraph 3 of the judgment. 32 — Cited above, note 29.

33 — Paragraph 19 of the Opinion.

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